Small Business Owners -- What is the most valuable asset of your company?
Take your pick from this short list....
a) Your location?
b) Your products?
c) Your people?
d) Your expertise?
Though all of the above are key factors to determining the level of success your company might achieve, they don’t come close to the correct answer, which is (e) – the “R-Factor”: Reputation.
Reputation is everything.
How people think and feel about your company will determine your success or failure – regardless of the size of your enterprise. Mom & Pop to multi-national corporation, a company lives or dies on reputation.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. “
- Warren Buffet
So, if you have a business and want to grow its success, where do you put your greatest effort?
Building its reputation.
That must be the primary focus. That has to be where the energy is spent.
What does it take to build a reputation? The answer is straightforward: providing people with note-worthy positive interactions.
Before we go any further, there’s one thing that needs to be acknowledged about reputations – they can be good or bad. And it also needs to be recognized that good or bad reputations are created by the exact same force – the quality of the interactions your company offers people – not just customers, because all customers were, at one time, just plain, ordinary people before they chose to do business with your enterprise.
While that thought marinates, there is one very important axiom to remember regarding the power of an interaction:
A positive experience is retold/spread by word of mouth to 9 people. A negative experience makes the rounds to 16 people
- Retail Customer Experience, August 7, 2011
There are two lessons to be drawn from this axiom:
1) Negative stories have long legs – very long legs
2) It takes twice as much effort to overcome a negative story.
As to the power of negativity, there are a number of studies that verify this phenomena. Suffice it to say, this is a legitimate fact of the market place and needs to be respected, and by respected it is meant avoided!
The number one reason to avoid it is because it takes twice as much effort to repair.
One of my clients, a replacement window company known for its five-star reviews, received a one-star review from a customer. The owner of the company, rightfully, contacted the unhappy customer to discover the issue behind the displeasure. It took the company owner 14 months to resolve the issue after coordinating with the product manufacturer and Mother Nature. As a result, the customer revised the one-star review into a five-star one because of the extra effort of the owner to bring a positive conclusion to the matter.
So, how is a great reputation built? Following the Four R’s is a strong start:
1) Remember. Be ever aware of the 9:16 positive/negative story ratio as well as how quickly a hard earned reputation can vaporize.
2) Represent. Approach every interaction with the public as a moment to represent your company in the most positive light possible. After all, customers are just members of the general public who noticed you and were interested in finding out more about you.
3) Reliability. Be honest and always follow through. Make sure what you tell customers about your product or service is 100% accurate and true. If you don’t know about something the customer questions, admit it, find out what is needed to answer the question appropriately and follow-up with the customer.
4) Respect. Treat every person you encounter with the respect and courtesy you would want to experience from others. This has to be a commitment held by everyone in the organization, from the person who answers the phone to the sales consultants to in-field representatives. Everyone – even the backroom accounting folks – have to believe in positive customer interactions and work to make certain every interaction is a positive one. When everyone does this, a powerful “positivity bubble” is created around your company that draws people to it. People will want to do business with you just because it feels right.
Does having a positive reputation mean doing things right in every situation? Absolutely not! It just means doing the right thing in every situation.
It’s all about the quality of the interaction. Are you going to get it right every time? Of course not. You’re human. You’re going to drop the ball. What gives strength and depth to a company’s reputation is how adeptly it recovers from such situations.
Building a positive reputation is not rocket science. It just takes discipline, commitment and integrity.
In the early 1980’s, Taco Bell was transitioning their advertising responsibilities from the in-house department to an outside agency. They invited a host of agencies to make presentations and they brought a host of team members, slides and presentation binders to Irvine, CA, to make their pitches. One agency, however, sent only one representative. He grabbed a chair, sat down in front of the review panel and said: “My agency conducted a customer-experience audit at over 200 of your restaurants and determined that the level of service, quality of food, and cleanliness in your restaurants was so inconsistent and, within that inconsistency, some of them were so bad that we will not work our magic to bring thousands of new customers into your units to have a bad experience. It would be self-defeating. You’d never get those customers back and you might likely go out of business. When you have set system wide standards for quality, service and cleanliness and your units are upholding those standards, then we’d be more than happy to work with you.” He then thanked the review panel for the opportunity and walked out.
Taco Bell spent the next year implementing those standards and Tracy/Locke became their agency of record. Taco Bell went on to experience tremendous growth, tripling domestic restaurants and began to open units internationally.
Turning a one star review into a five star review takes a lot of extra work, but it is worth it. The result will be not just one more happy customer, happy customers telling others and retelling others of their great experience and fueling the success of your dreams.
But the best course of action is to endeavor to get those negative situations as close to zero for as long a time as is humanly possible. How can this be achieved? That’s done by hiring people who get it, who understand the Four Rs and are willing live them 24/7/365.