Articles
It can be difficult to balance the dream of giving great service with the commercial realities of running a business
This is an e-mail I received from a business owner. This is what he had to say:
"Hiya Derek,
Thanks for sending this great newsletter out, it's really good advice and it really makes me think. I'm a follower of the WOW awards and your work, having recently discovered your website.
I feel customer service is paramount to the success of a business and it's even more important to self-wealth (spiritually not financially!).
My business has been running over four years now (of which I'm very proud), but somewhere in that time we lost our 'outstanding customer service' to fall to 'above average'. It's not something any of us here are proud of and I curse the day we begun to lose it.
I can safely say our worst area is getting money from clients, 75% of our invoices become overdue and I feel it directly affects the service we provide to customers on the whole. The reason being the amount of financial and mental burden it places on you and your team is immense. Having to fob off suppliers and the bank manager while keeping the wolves from your door with a large stick.
I think sometimes Service can be lost in the hussle and bussle of daily life, the stress of providing to your family and balancing the books. Now I'm working hard to ensure that our 'incredible' service returns in full-force. And your newsletters are certainly helping!
Okay, another rambling - sorry for going on and good luck in everything you do - Keep it up!!"
This message from AW really struck a chord with me. Sometimes the pressures of running a business can cause us to forget the original goals and ideals.
In a small business it will often be things like cash flow that divert our attention. In bigger businesses it sometimes seems to me that we try to get too sophisticated and lose sight of the basics.
I recently had the privilege of interviewing Rachel Elnaugh, founder of Red Letter Days.
As you may know, Rachel built Red Letter Days up into an £18 million business and created an industry in the UK that is estimated to be worth £200 million annually. But things went badly wrong a few months ago. The company was forced into administration and Rachel was ultimately forced to sell the business.
Rachel was very honest about what had happened and the lessons that she had learned. She emphasised the importance of staying involved and listening to your customers. She also regretted entering into contracts on very low margins simply to generate growth.
Let's not lose sight of what our customers really want. But at the same time let's be proud to deliver outstanding service. We cannot be all things to all people. And sometimes we might have to make a conscious decision about price (or cash flow) and service. If we are delivering outstanding service that it may be appropriate to be charging a premium price or insisting on early payment.
Some years ago I was really struggling financially. My business was growing quickly but my profits were very low and cash flow was difficult.
One day a new customer came to me and asked me for a price to do some work. I gave him a price that I thought was fair to him and fair to me. But there was a sharp intake of breath and he said, "that's a bit expensive!"
Because I was hurting, I stood my ground. "I'm sorry," I said. "But that's the best price that I can do."
"Oh well," he said, "it was worth a try."
That experience taught me something very important. It taught me that I had to be confident and proud of the price that I charged. From that point onwards, if anyone ever said that I was too expensive my reply is, "Thank you very much. I'm sorry that you cannot afford to use me right now but I hope that someday in the future we might be able to work together."