Service Quality Institute is the global leader in helping organizations keep customers, build market share and improve the performance of the entire work force by developing a culture of delivering superior customer service.
Recently, Brook on my Leadership Management Team asked that I talk and write about this phenomenal company called…Chewy. I am glad she did as again, here is a company that stands out, became very profitable, and is focused relentlessly on Great Customer Service.
Following are just a few of the questions that I feel are important for any company to reveal right up front:
What is your Mission?
We’re working to become the most trusted and convenient online destination for pet parents and our partners – vets and service providers – alike. Our success is measured by the happiness of the people and pets we serve, not simply by the amount of pet supplies we deliver. That’s why we continue to think of outside-the-Chewy-box ways to delight, surprise, and thank our loyal pet lovers.
What are your customer Service Hours?
We’re available all day every day, 24/7, 365 days a year.
What’s your Return Policy?
Our policy is simple: If you’re not 100% unconditionally satisfied with your pet supplies, you can return them.
We do not accept returns or exchanges on prescription medications. However, if the medication you received is incorrect or damaged we will gladly exchange it for you or provide a refund on a case-by-case basis.
Chewy.com does not take title to returned items until the item arrives at our fulfillment center. At our discretion, a refund may be issued without requiring a return. In this situation, Chewy.com does not take title to the refunded item
Here’s their Corporate Overview
At Chewy, our mission is to become the most trusted and convenient destination for pet parents everywhere. We view pets (and pet parents) as family and are obsessed with meeting their needs and exceeding customer expectations through every interaction.
Launched in 2011, we offer the personalized service of a neighborhood pet store alongside the convenience and speed of e-commerce. Customers love shopping our wide selection of products of more than 45,000 items (including our Private brands and prescription Rx food and Rx medication products), which we offer at competitive prices, fast 1-2 day shipping and around-the-clock convenience that only e-commerce can offer.
Chewy’s commitment to customer service is the core of our brand, and our customers love us for it. We “WOW” pet parents through 24/7 assistance, advice and encouragement every day of the year. We make pet parenting easy with our convenient Autoship subscription program—which allows our customers to schedule their orders, so they never run out of their pet food, supplies and medication they need.
As an e-commerce company, product innovation drives our operations, and our team is constantly striving to find new and better ways to improve our customers’ experience. From an easy to navigate website and highly rated mobile apps, to detailed order tracking and personalized “Pet Profile” features, we are transforming the way pet parents shop.
Fiscal year 2018 sales were $3.5 billion. An increase in sales if 68% from the prior year. In June they had an IPO. It opened at $36 a share up from its IPO price of $22 a share. Chewy’s stock market valuation is roughly $14.3 billion. PetSmart bought Chewy for $3.35 billion in 2017. Chewy generates the bulk of its sales through its subscription feature, which allows customers to have repeat orders automatically shipped at specified intervals. It sends Christmas cards to its customers.
Why has Chewy.com succeeded?
Co-founder, Ryan Cohen, points to its Customer Service and changing times.
From sending handwritten holiday cards to offering pet portraits, Chewy.com looks for special ways to show customers “we really care about them and we care about their pets,” said CEO Ryan Cohen, “We have hundreds of card-writers. We sent out 5 million last year,” Cohen said. Chewy also selects customers at random and has staff artists do oil paintings of their pets — not an item that anyone can buy, according to company spokeswoman Roxsanne Tai.
In South Florida, Chewy has become a major employer, with 1,500 people at its Dania Beach headquarters and new Hollywood customer service center. Chewy has a total of 7,000 employees around the country, recently opening its sixth warehouse in Ocala, Cohen said.
In terms of customer service, Cohen said he modeled Chewy after shoe site Zappos, working to build lifetime relationships with pet owners. As a result, customers are loyal, he said. I have no idea why all firms do not understand and implement this strategy.
Chewy was founded in 2011 by Cohen and Michael “Blake” Day, millennials who reportedly met in a computer chat room. Cohen continues as CEO. The entrepreneur described himself as “obsessive, relentless and contrarian.” He looks for negative comments each night on the company’s website in an effort to improve. “When customers shop with us, I want them to have the perfect experience,” he told the audience of investors and entrepreneurs at the conference.
Impressive company with impressive Customer Service. AND, thanks to my Leadership Management team, we are finding more and more companies that are showing the value of a great Customer Service Strategy.
Here’s a question for you…Are you an Impressive company with impressive Customer Service? If you would like to be, give me or one of my Leadership Management Team a call.
For over 30 years I have been reading the financial annual reports from Service Leaders. I find that some annual reports are full of smoke because they manipulate data and just dream about being a service leader. Authentic Service leaders, on the other hand, do a great job.
I have highlighted key ideas so you can review quickly some of the reports below;
Amazon is the service leader throughout the world. They seem to do everything right. Sales were up $55 billion in 2018 again making Jeff Bezos the wealthiest person in the world. I think every leader in your organization should read their annual report. Read here. The excerpt below is just an example of a key idea from Amazon.
Failure needs to scale too
As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures. Of course, we won’t undertake such experiments cavalierly. We will work hard to make them good bets, but not all good bets will ultimately pay out. This kind of large-scale risk taking is part of the service we as a large company can provide to our customers and to society. The good news for share-owners is that a single big winning bet can more than cover the cost of many losers.
Home Depot is another service leader. Over 400,000 employees. The world’s largest home improvement retailer. Read here. The excerpt below is just an example.
We believe that when a customer comes to one of our physical stores, it needs to be a great experience. Our customers asked us to reduce several pain points around store navigation and checkout and we made great strides in 2018
Southwest Airlines is the most customer driven airline in the US. It is the only service leader I am aware of that has had 46 consecutive years of profitability. Revenue last year was $22 billion. They started June 18, 1971. Everyone reading this newsletter could learn a lot from Southwest. Read here. The excerpt below is just an example.
During 2018, the Company continued to aggressively market and benefit from Southwest’s points of differentiation from its competitors. For example, the Company’s Transparency campaign emphasizes Southwest’s approach to treating Customers fairly, honestly, and respectfully, with its low fares and no unexpected bag fees, change fees, or hidden fees.
Southwest continues to be the only major U.S. airline that offers to all ticketed Customers up to two checked bags that fly free (subject to weight and size limits).
Costco Wholesale a $135 billion retailer, employing over 245,000 people, operating over 750 warehouses and serving 94 million members worldwide. Read here. The excerpt below is just an example.
Our financial performance depends heavily on our ability to control costs. While we believe that we have achieved successes in this area, some significant costs are partially outside our control, most particularly health care and utility expenses. With respect to expenses relating to the compensation of our employees, our philosophy is not to seek to minimize their wages and benefits. Rather, we believe that achieving our longer-term objectives of reducing employee turnover and enhancing employee satisfaction requires maintaining compensation levels that are better than the industry average for much of our workforce.
I created the first customer service program called “Feelings” and released it in January of 1980. We have updated the program numerous times and sometimes it’s hard to keep count…. today we have 5 versions of Feelings.
All versions and updates focus on 6 core elements. The one thing I have found amazing is that these principles were critical in 1980 and are even more critical in 2019 to any organization’s success. Just think of your favorite sports team and how they will win or lose each game based on execution of the fundamentals and basics.
6 Core Elements:
Feel Good About Yourself. You have to build the self-worth and self-esteem of people. The vast majority of employees have many conflicts in their lives. Most have personal problems that disrupt their work day. Some have problems with their boyfriend or girlfriend, spouse, kids, boss, relatives or friends. The Feelings customer service program recognizes that when employees feel good about themselves they are more productive and provide a better customer experience.
Practice Habits of Courtesy It does not take longer to be nice so we encourage employees to ‘share the warmth”. Many employees act like robots. In seconds we can read the body language and warmth….so can our customers.
Provide Caring Communications both verbally and non-verbally. Do your employees smile? Use your customer’s name. By simply introducing yourself and asking for their name, you are setting up a relationship. Use their name when asking questions or introducing them to others. Remember, they can see it in your facial expression and hear it in your voice.
Perform. Do what you said you are going to do. Do it fast. Deliver on time or sooner. You can be the nicest person in the world but if you do not perform all of this is a waste.
Listen to the customer. Help them use products and services that they want. Show them how to use the products and encourage questions. Many times they will find something they didn’t even know they wanted but you showed them something they didn’t see. Unfortunately many employees are so wrapped up in what they want to sell that they do not pay attention to customer’s requests.
Learn About Your Products and Services. A customer can tell in seconds if you really know what service and products your organization sells. Many employees know very little about the total company. The employee turnover is so high that finding employees that are knowledgeable is rare. Learn everything you can about your company and the products and services they promote.
These principles are easy to understand and are not difficult to implement. They are magic!
I have been talking and writing about customer service longer than anyone else in the world, letting both large and small companies know that it’s fiercely competitive out there and the only way to compete and win is with superior customer service. It will help you retain customers, build market share and improve worker performance. I, for one, am relentless in this. I work on it daily
For 40 years I have said the major reason organizations are not customer driven is because top management has no grasp of the financial impact and the impact it has on employee performance. They are not relentless.
CEO’s like to delegate customer service to HR, Human Resources. This is the kiss of death. The vast majority of all HR leaders have no grasp of strategy. If the company increases market share and sales for them it is just more work and no increased compensation. About the only time I have seen HR drive the service strategy is when the CEO demands it now. Most HR will then work to kill the project.
Service leaders like Metro Bank, Amazon, Mayo Clinic, Costco, Southwest Airlines and Apple do not delegate this to HR. It is a strategy that is, or should be, the vision of the CEO and they relentlessly pursue it.
Another problem is most CEO’s are not relentless. This is a 1 or 2 year project. What is worse is many firms who have a service culture when the CEO retires delegate it to a Financial CEO like Michael Dell at Dell did with Kevin Rollins and Sam Walton and David Glass at Walmart did with Lee Scott. They put blinders on and dealt with numbers only, no thought to strategy and customer service. Not even paying any attention to the fact that it is very difficult to recover the service brand. Good example of that is the $1000 I invested in Dell in May 20013 is worth $475 and at Walmart $2323, and this is after 15 years.
Vernon Hill, Founder & CEO of Metro Bank London said it “starts with a thousand cuts.” It is very difficult for the Board to buy into the Service Strategy. The United States bank he founded in 1973, Commerce Bank, was sold to TD Bank in 2007. Today it has little resemblance to the customer service culture it was built on. You used to be able to call 888-751-9000 and a live person answered the call in 1-2 rings. Today it requires an IVR system. The hours are no longer the same and inconvenience the consumer. It’s so much worse and has little evidence of improving.
I think Internal Politics destroys the focus on customer service. There is so much infighting. Everyone wants to fight for their own petty issues. It just becomes too much work. NO one wants to take responsibility. Unless the CEO is relentless it will die. If a Financial person is put in as CEO it will die. They just do not understand the power of the service strategy.
In order to create a service culture the CEO needs to be relentless. Needs to drive this as a strategy and needs to develop a management team that understands this culture. They need to focus on keeping customers, building market share and improving the performance of the entire work force by developing a culture of delivering superior customer service.
We are relentless:
For 40 years we have been helped companies succeed.
For 40 years, over 1 million people trained using our system.
For 40 yearswe have tailored programs for motivating frontline employees.
For 40 years we have helped companies save money and watch their profits grow with great customer service.
Even the most successful companies are in constant competition for business. What sets them apart often boils down to one factor…outstanding customer service.
I have spent 44 years focused on customer service. I have written hundreds of articles, as well as 7 books on the topic. I have also been interviewed on television and radio plus presented to thousands of customers with seminars worldwide. No matter what business you’re in, here’s some advice I highly recommend you consider.
Most firms in the world believe they provide awesome service. They are addicted to advertising and marketing using expensive media. The biggest issue I see is they have no idea how inconsistent and weak their service really is. Most firms believe they need no help, but employee turnover is high. The solution is staring them in the face…it’s their reluctance to invest in their people to develop a customer driven workforce.
First, you’ve got to understand you’re in the service business. “Most companies think they are in manufacturing and retail; airlines don’t know they are in the service business. Southwest Airlines is successful because they understand they’re a customer service company—they just happen to be an airline. Customer service is a critical piece of your business, and you should fine-tune it as much as you can.
Second, you have to look at all the policies, procedures and systems you have in place “That make life miserable for customers”. You could have the nicest people in the world, but you could have stupid hours, stupid rules, stupid procedures, that just tick your customers off. When you make it that difficult for customers to patronize you, they find someone else who is more accommodating. Your customers can do quite a few things much better than you can, and if your business isn’t embracing this fact by viewing customer service as a branch of your marketing department with tremendous ROI, you’re doing yourself, as well as your customers, a disservice.
Third, you have to have empowerment and speed. Every single person has to be able to make fast powered decisions on the spot, and it better be in favor of the customers. Employee empowerment may be the most underutilized tool in all of customer service. Intellectually employees know what to do but they need to be authorized and empowered by upper management to take action. No one should have to go “higher up” to get permission to help a customer.
Fourth, you have to be more careful about whom you hire. Service leaders hire one person out of 50 interviewed, sometimes one out of 100, but they’re very, very careful. Look for the cream, the A players, instead of bringing on B and C players. Identify several people in your organization you wish you could clone. Write down their characteristics and traits and create your own benchmark of the right person for each position.
Fifth, educate and train the entire staff on the art of customer service with something new and fresh every four to six months. Let’s say you want to create the service culture. No matter if you have a hundred or a thousand employees, you better have something new and fresh, so it’s constantly in front of them so when they wake up every day and they go to work, they say, “Fantastic, I’m taking care of customers?” When management is committed to customer service by daily word and deed, the result is an infrastructure that facilitates free communication internally and that yields organizational culture.
Finally, measure the results financially so that you know the impact it’s making on revenue, sales, profit and market share. Everything you do should be built around the concept of creating an incredible customer experience. Perhaps the simplest way of creating a service culture is a variation of the golden rule: Treat your customers as you wish to be treated.
“MAKE your customers excited that you’re in business. MAKE them grateful that they have the opportunity to buy your services or products. MAKE them feel like they are your most important customer. MAKE your service so outstanding that they wouldn’t think of doing business with anyone else. And then… find a way to MAKE your service even better!” — John Tschohl
In a September 2018 Money magazine article, authors Megan Leonhardt and Shawn M. Carter did a nice job of showing the value of investing $1000. Very few executives want to copy Jeff Bezos the founder and CEO of Amazon. Sales in 2018 increased $41.9 billion a 31% increase in sales. I suspect this year they will increase sales by over $60 billion. This year Bezos increased his net worth to over $160 billion.
I could write pages on why Amazon is the most customer driven company in the world. My goal is to get you to master the principles Bezos is so good at.
Everything is built around the customer experience.
He is more relentless than any CEO in the world. (Most CEO focus on customer service for 2-3 years and then drop the focus)
Technology is used to improve the customer service. (Most firms use technology to piss off the customer. To avoid customer contact.)
Everyone is empowered and they all use it. (I have never heard any employees say no.)
All companies make mistakes. When Amazon does they understand and use Service Recovery. Always. (In the US most employees lie and run for cover. Amazon is never interested in immediate profits. Trusting and taking care of the customer is more important.)
They have a better grasp and implementation of speed than any firm in the world.
E-commerce giant Amazon reached an astounding market cap of $1 trillion Tuesday, becoming the second-ever publicly traded U.S. company to hit this mark, after Apple. Analysts say Amazon’s diverse portfolio and continual expansion have helped drive up its valuation. Some even see a path to $2 trillion.
It’s been almost a year since Amazon closed its deal to purchase Whole Foods and Amazon’s stock has more than doubled over the past year, outperforming other publicly traded grocery chains by a wide margin. Since the Amazon-Whole Food deal closed, the S&P 500 index has been up 18 percent.
From 8/28/2017 to 8/31/2018
As impressive as that is, original investors in Amazon fare even better. If you had invested $1,000 during Amazon’s IPO in May 1997, your investment would be worth $1,362,000 as of September 4, according to CNBC calculations.
That’s better than the so-called FAANG stocks, plus Ebay – which debuted in that same period. Apple’s gain, which was the second highest at a nearly 58,000 percent, is notable, but it also had a 17-year head start and its return is still less than half of Amazon’s.
From IPO date to 8/31/2018
Amazon is not only crushing the competition from other grocery stores; it continues to reign supreme in retail as well. Since its IPO in May 1997, Amazon has gained over 134,000 percent, far surpassing other competitors.
It’s also worth noting that Amazon began as an online bookstore before it grew and diversified. Barnes & Noble, another book retailer, has seen the value of its stock go down nearly by half.
No firm can be a service leader without empowerment. Empowerment means you have to bend rules and policies in favor of the customer. In my book, Empowerment: A Way of Life, I said everyone’s single, most important task every day is to have over happy customers. If you have over happy customers your competition is screwed… sales increase and customer loyalty soars.
Employees and managers are usually frozen in time and unable to make fast decisions to help a customer. I suspect 80% of all empowered decisions are for $25 or less. Of this I estimate 80% are for under $10. If an employee has a choice between a rule, policy or procedure over the customer or making an empowered decision to help the customer to make them over happy…the policy always win.
All CEO’s love empowerment. Most believe their employees are empowered. In the last 35 years I have only met one CEO who disagreed with my definition of empowerment. That was the CEO of an airline in Kenya and they are out of business. The fact is that it is very rare for an employee to make an empowered decision even if there is NO cost to their company.
Empowerment is making a fast decision on the spot in favor of the customer. The customer must win. If you want to grow like Amazon, master empowerment. Last year they had a sales increase of $41.9 billion. I have in my life never heard an employee at Amazon say NO. Never have seen them ask for approval. Never. In my September Discover credit card there were 23 Amazon orders for a total of over $1600 (My daughter who lives in China was using Amazon to buy tons of stuff for our camping trip to the Boundary Waters in Northern Minnesota).
Jeff Bezos, CEO of Amazon and now the richest person in the world. In the first six months of 2018 his net worth increased by over $45 billion which giving him a net worth of over $150 billion…so far! I have still never figured out why most companies do not want to copy the values and principles of Amazon. I guess Amazon is growing too fast for most companies in the world.
Amazon is now valued at over $1 trillion. The stock has surged this year 75% and added $430 billion to the company’s market capitalization. – about the size of Walmart, Costco and Target combined. It is the world’s most customer driven company. They are better at empowerment than any company in the world.
There are several reasons employees will NOT make empowered decisions.
Almost all employees believe they will be fired if they make an empowered decision. They KNOW they will lose their job. If you cannot overcome this fear you will never have an empowered workforce.
Employees are concerned they will be forced to pay for what they gave away. Front line employees everywhere in the world are the least paid. They fear having to personally pay for what they give away to make the customer over happy. This is a fear. Not reality.
They do not want to be screamed at or reprimanded. There is no upside. Their manager will chew them out.
To make empowerment work, managers and supervisors have to support and drive empowerment. I find many managers are young and the worst offenders of empowerment. If you really want an empowered work force all employees which includes everyone in any leadership role must be trained on empowerment.
SQI has a 2 session program called Empowerment: A Way of Life that can change attitudes and teach the skills of customer service and empowerment. The link to the brochure is here. It is available in English, Spanish, Russian, Chinese, Greek and Bulgarian. There is no educational institution in the world that will teach empowerment. If you believe in empowerment and want to drive an empowered workforce then you must be willing to train and develop your entire workforce.
I will give you some recent examples of NO empowerment. This week I needed to get a haircut before leaving for Russia. I use an app from Great Clips. It tells me the wait time and makes a reservation for me. The wait was 33 minutes. I was driving from the north part of the Twin Cities to Bloomington where I live. I got there on Monday, Labor Day at 5:09 with about 7 minutes to go before my reservation time. The young employee said I was too late. I had to be in the door before 5 PM. “Come back another day”. No empowerment. They wanted to go home and the heck with the customer.
I like Papa Murphy’s pizza. They have a loyalty card which gives you a stamp each time you buy a pizza. After 12 stamps you get a free pizza with a value of $14. The card says good for one pizza. In the past employees would let me use this for $14 in pizza’s. I save these up for when my daughter and her family arrives from China. I had two pizza’s ordered for a value of $14. The employee said the coupon card could ONLY be used for one of the pizza’s. I asked to speak to the manager. She said she was the manager. About 24 years old. I went online to complain. NO response. I have not been back. The real cost for a pizza is maybe $1. I told her I would not be back but she really did not care. No empowerment. Keep in mind Papa Murphy might go broke if they allowed this to happen.
My company spends about $750 a month on gas at Holiday gas stations. They have a reward program with a local supermarket chain and coupons for $.10 off a gallon. I spent about $36 on 13 gallons. When I went in to pay I never got credit for either. This was $1.30. I tend to be frugal. The employee said there was nothing she could do. I asked to speak to the manager. She said I am the manager. About 25 years old. She really did not care. I was a pain in the butt. She finally offered me the phone number for her manager who I called after I drove off. The manager said to go back and they would have $1.30 for me. This is a really large company with no empowerment.
Most employees are afraid the company will suffer financially if they make an empowered decision in favor of the customer. Many fear the CEO or owner will not have enough money to cover dinner that night. Many managers fear the employee will give away the store. That our dishonest customers will take advantage of our young dishonest employees. Really stupid thinking but reality.
If you want to drive empowerment you have to be a role model. Celebrate everyone making an empowered decision. If you have an internal communication in each issue celebrate 1-2 wild empowered decisions by employees.
Most customers will never complain to the company. Surveys tend to be worthless. HR uses them because everyone else uses them I doubt if anyone does anything with the surveys. My wife will never complain but, she will also not be back!.
Word of mouth is the most powerful marketing tool you have. Empowerment is the least expensive way to leverage this. If you want to be a Service Leader you must have an empowered workforce.
The verb form of bellyache is what I am referring to. It is to complain or bellyachabout simple matters that are not taken care of for the customer. It’s simply asking for a solution to a mishap or bad service.
I know, as a business person you can see them coming from a mile away. It’s the determined look they have to get a problem brought to your attention. To them it is a problem that is eating away at them and they will not be happy until you have gone above and beyond to take care of what is probably a simple problem that shouldn’t have happened in the first place.
Corporations may seem large, powerful, and intimidatingly faceless, but that doesn’t mean that customers have to settle for what they’re given. Customers have a voice, and if they’re not happy, they can use that voice to complain to get what they want.
I have been such a promoter of “bellyachers”. The ones that go out of their way to make sure things are done properly. The ones who make sure the customer behind them in line does not have to experience bad service. The ones that take a few minutes to show corporations what they need to do to earn their business.
The average person today can take a problem viral in hours. Now, thousands hear about problems within 24 hours. The average person has 130+ friends on Facebook and has numerous connections on Linkedin, Twitter, etc., etc., etc. They’ve got venting down pat but, that does nothing to solve the problem.
Here’s some highly effective advice for the complainer (bellyacher):
Go straight to the top, remember, the person that greets you at the door or counter is the lowest on the totem pole. They have no authority, no skills in handling problems for the company. All they are capable of doing is letting you know that they will get someone else to handle your problem.
Don’t be a jerk, you are dealing with real people with real feelings. When you want to complain, generally the emotion attached to that complaint is anger. Remember, anger just breeds more anger plus nobody wants to help someone acting like a jerk.
Ask a lot of questions. Get the person you are in contact with on your side. Often times you can move forward in your quest for a solution by asking what they would do if they were in your position or you can also ask (politely) what kind of resolution is fair and how he or she thinks this problem can best be solved.
What does it take to get action on a complaint?
I tell every company to:
Create a Service Recovery Process. Too many executives think employees are born with good customer service skills. It’s important to develop a process that allows employees some latitude in serving the customer that also includes specifically defined steps that must be followed in providing service recovery. Doing so requires decision making and rule breaking—exactly what the employee has been conditioned against. Workers have been taught that it’s not their job to alter the routine. Even if they’d like to help the customer, they are frustrated by the fact that they are not able to do it. Worse yet, they don’t know how.
Act Quickly…The employee at the point of contact best implements service recovery. Avoid moving problems and complaints up the chain of command.
Take Responsibility…Don’t place blame, make excuses or lie to cover a mistake. Sincerely apologize and thank the customer for pointing out the problem.
Be Empowered…give those who work with customers the authority to do whatever it takes to ensure customer loyalty.
Compensate…Give the customer something of value. Every organization has something of value it can give to a customer who has experienced a problem.
I tell every customer that they have the right to a good experience, a quality product, and top of the line customer service. I also tell everyone that it’s their responsibility to let the appropriate channels know when there is an issue. You deserve quality and top notch performance.
“So to all you bellyachers out there, keep it up and let us know what the problem is so we can fix it.” John Tschohl
Very few firms understand the cost of employee turnover and damage it can do to their brand. Take a look at how your company values people from the front door to the corporate level. The mind set is pretty simple…the less you pay them the easier they are to replace. Not true!
Employees at the bottom of almost every organization are the face of your organization. I estimate that 99% of the customer contact is with these employees and they are the least respected and least compensated in any organization.
According to the U.S. Bureau of Labor Statistics, the unemployment rate has been dropping drastically since 2012 and is now at a record low of 4.1%. So, how do you keep your good employees? What does your company offer to keep your turnover rate as low as possible?
It’s not all about the money.
In a survey of nearly 1,000 employees from large businesses, put out by Harvard Business Review, they found a strong connection between recognition and job satisfaction–seven out of 10 employees who received appreciation for their good work said they’re happy with their jobs. But among employees who hadn’t received recognition, only 39 percent say they’re satisfied at work.
Human nature is such that humans like to feel valued and special for what they are and what they do. Employees when they leave always tell you it is for more money. They have a spouse and kids they have to support and you tend to believe them. Frankly, it is hard to convince a person that money is the only reason. Very few employees will tell you the truth as they do not want to burn bridges and are looking for a job reference.
There are several reasons why employees start looking and then leave: Money is on the list but not the driving issue.
1. No one cares. I do not feel appreciated or loved. (Very few employees will ever admit to this)
2. I do not like my boss. The boss believes everyone works for money and you should be happy to have a job. Many managers are jerks.
3. I do not get along with employees. No fun going to work. It creates as much excitement as going to the dentist.
4. You have some really rough customers. Mean spirited. Too many problems and complaints.
5 Not enough money. Considering all these problems I am not paid enough to stay here.
What is the Cost?
It is difficult to give employees recognition that is genuine, timely, sincere and specific. The appetite is huge. In the US many firms have openings, and when employees leave it is becoming more difficult to find replacements, even harder to find great replacements. Remember, the top people will opt to leave where your incompetent employees will stay forever.
What is the Solution?
Many managers will say just pay people more money. The US airlines used to do that and the results were really bad. Pay people as much as you can. Be generous. If you really want to own the employee’s heart and mind then use recognition.
All managers and supervisors need to be trained on how to manage and motivate employees for excellence. Most people are promoted to supervisory or manager positions with little or no training on leadership and how to manage and motivate employees. The smarter the manager the less likely they are good at the soft skills. They think with their head. Most believe that you are lucky to have a job. In developing countries because labor costs are a lot less most firms just add more employees and probably have 25% more employees than they need.
My form of recognition is a formal training program…a structured course.
Employees are driven by recognition. Everyone wants to feel valued, loved and appreciated. In 1976 the first program I developed was called, Better Than Money. It taught managers how to motivate employees with techniques far more effective than money. That was 42 years ago. The principles today are still the same. All employees want to feel valued and appreciated.
I also developed a program called Coaching for Success. It is a one-day seminar. We use high impact video to dramatize the skills and techniques we use, a powerful facilitator guide if you want to implement the program yourself and a 4 color perfect bound manual for participants. Click here for more details and pricing options.
Implementation Options Any Way You Want:
1. SQI can facilitate for you in any part of the world. We charge $200 a person for 20 people or more plus travel expenses. SQI has trained facilitators across the world.
2. SQI can train your staff to facilitate the program on site. We charge $1,500 for a one day Train-the-Trainer seminar. Facilitator and participant materials are extra.
3. You can purchase the Introductory Start Up Package with user friendly facilitator guide with 2 DVD’s or 1 Flash Drive and 15 participant kits for $2,499. Each additional participant kits is $95 each in quantities under 100.
If you’re looking for ways to increase engagement, loyalty, and low turnover, take some time and show your employees some appreciation. If you don’t make time for those who deserve it, they may start to look elsewhere for a company that will.
Successful people are obsessed with learning. They out-learn everyone around them. They’re voracious readers. Warren Buffet, Bill Gates, Mahatma Gandhi, and Disney CEO Bob Iger read and learn. They finish newspapers, books, audio books, journals, and magazines like Harvard Business Review, Inc, or Forbes while their not-so-committed peers waste their time on worthless entertainment.
I am a huge promoter of reading and learning. All the books I have written, all the seminars I give, all the coaching I do is based on learning. Learning about your industry, learning about yourself, learning about products, learning about your employees and most important, learning about customers. It’s my passion and has been for the past 40 some years.
Be relentless in learning new info. If it has anything to do with your industry, be on top of it. Buy manuals, read every book and magazine. Then get involved with industry conferences and put yourself out there. If you have expertise that your colleagues could benefit from—share it! Send them emails with info they can use.
According to Jack Canfield, author of The Success Principles, “People who have more information have a tremendous advantage over people who don’t. And though you may think it takes years to acquire the knowledge you would need to become super successful, the truth is that simple behaviors such as reading for an hour a day, turning television time into learning time, and attending classes and training programs can make it surprisingly easy to increase your knowledge—and substantially increase your level of success.
Become a people watcher. Watch people, analyze what they do and why. Find people who are where you want to be in life, and get on their schedule. If they’ve written a book, read it. If they give seminars, go to it. Ask them questions and listen to their stories and answers.
Howard Schultz says to young people who want to be the next Howard Schultz… “Everyone who grows up, no matter where you are in life you had dreams, and the question is, have people convinced you that your dreams cannot come true. As a result of that maybe you would have given up too early. Define what your dream is: dream bigger than that and don’t let anyone tell you that you are not good enough, that your dream can’t come true. And don’t settle, because you are going to find yourself at 30, 40, or 50 years old saying I could have done that. And you probably could have.”
Reading pays off. Since I was 22-years old I personally have read two books a month besides all the magazines, newspapers, and periodicals I get. Mostly they are involving customer service, biographies and autobiographies of great people. I know that I must commit to lifelong self-improvement and learning. It assists me in new ways of thinking and behaving. It helps me to pass on what I have learned to educate the people closest to me including family, friends and business associates. It’s what pushes me to work harder at expanding the thought processes of the people that come to my seminars, people that I coach on a daily basis. I learn from them too so it really is a lifelong process.
I highly recommend reading The Autobiography of Benjamin Franklin, Meditations by Marcus Aurelius, Losing My Virginity by Richard Branson, The Story of My Experiments with Truth by Mahatma Gandhi, As a Man Thinketh by James Allen, Eat That Frog by Brian Tracy, Long Walk to Freedom by Nelson Mandela, The Monk Who Sold His Ferrari by Robin Sharma, and On the Shortness of Life by Seneca to get an insight into the rituals of a few well-known and highly successful people.
Mark Cuban says he was stunned some years ago when he read that the average American college graduate reads only 1 book a year. To him, that spelled opportunity. And, he is not alone. Warren Buffet speaks about proactively building an “information advantage” with his own aggressive learning habits and routines.
My take on this is that if you want to be valued, make yourself valuable. Out-learn your competition, out-learn your boss, out-learn yourself…invest in you.
Only good things can happen when you invest in knowledge.—John Tschohl