Annual Planning Checklist: 10 Actions of Beloved and Financially Prosperous Companies
By Michael Snow on Mar 22, 2013
Note: In case you missed yesterday's Webcast featuring Jeanne Bliss in our Oracle WebCenter Social Business Thought Leaders Series, Jeanne has provided us a wonderful summary to use for your Annual Planning process. You can also watch the full webcast On-Demand.
Annual Planning Checklist: 10 Actions of Beloved and Financially Prosperous
Guest post by Jeanne Bliss, President, CustomerBliss
With annual planning just around the corner, here are 10 actions that business leaders and their organizations should invest in to exponentially increase customer loyalty and drive profitable business growth in the upcoming fiscal year. Execute on them to move toward "beloved" status in the eyes of your customers. Good news is; many don’t cost a thing but your commitment and leadership alignment on messaging and execution.
1. Believe in the integrity of your customers. The majority of business policies and rules are created to protect business from the minority of customers. Be bold, like Connecticut Griffin Hospital, which began sharing hospital records with patients and saw claims against the hospital drop by more than 43 percent. Take a leap of faith and believe that trust is reciprocated by customers when they feel that you trust them. Find one rule or policy to relax and watch what happens.
2. Invest in employee trust. Show your employees that you believe in them. Beloved company Wegmans invests in its employees by training them in the skills that remove rules, regulations, policies, and procedures that pen employees in. This enables Wegmans to throw away the rule book and live by this one edict: "No customer goes away unhappy." As a result, its margins are higher and profitability more steady because the grocer's turnover is only 7 percent of employees versus the average in its industry of 19 percent employee turnover.
3. Practice democratic decision making. Make sure your company's best ideas have a way to see the light of day. Give good ideas a chance to prosper no matter where they come from in terms of your organizational chart. Innovation and marketplace differentiation come when employees are respected as part of achieving a mission greater than their set of tasks, and when their voice counts. W.L. Gore has become a $2.7 billion dollar company, was named by Fast Company as "pound for pound, the most innovative company in America," and earned a place on Fortune magazine's best companies to work for list since its inception because of how the company unleashes its employees' spirit and ideas.
4. Grow and invest in customers as a primary asset of your business. Talk about customers lost and gained in real numbers, not percentages, to illustrate the vast number of lives your business impacts. Understand what drives customers out your door, as well as their long-term potential. Zane's Cycles in Connecticut has experienced more than 20 percent growth every year for 29 years, with 45 percent margins because the retailer never loses sight of the fact that its customers' average lifetime value is $12,500. And employees manage relationships bearing that in mind. Valuing customers makes it easy to make decisions about how to treat them.
5. Know your power source for bonding with customers. Regularly connect with customers, not only through surveys and other feedback mechanisms, but also as they experience your products and services. Take a page from Trader Joe's, which uses employee taste buds at its testing kitchens to determine what items should make it to the grocer's shelves, but uses customer "tasting stations" inside its stores combined with sales to determine what items stay. This closeness contributes to Trader Joe's ability to generate $1,300 in sales per square foot--twice the supermarket industry average.
6. Have clarity about how you uniquely serve customers' lives. Unite your operation to ensure that decisions connect to deliver an experience customers want to repeat and tell others about. This ties cross-silo decision making together and releases the organization from excess bureaucracy. IKEA, for example, designs the price tag first because employees at all levels know that the store serves customers who have less money than sweat equity, so are willing put together their items themselves at home. Across IKEA, the understanding that the price drives design, innovation, and what the retailer will and will not do drives its growth...sales that increased even in 2009 by 7.7 percent.
7. Deliberately walk in your customers' shoes. You need to know your customers' life to serve their life. Yet as people rise through the ranks or even join organizations, orientation is often more about process and policy than learning about the customer at the heart of the business. Be deliberate in establishing a process for new hires, such as insurer USAA, which require new "recruits" to wear the flak jacket and helmet that many of their enlisted customers wear and to read their letters. All this is done so that when calls come in employees first connect with the customer, and then conduct the process of the business. Ninety eight percent of its customers stay with them year after year.
8. Make employee selection one of your most important decisions. Select your employees as you would customers: for lifelong value. At Chick-fil-A, operators and employees are selected based on their values, ability to build grow and sustain partnerships in all areas of their lives, and then their technical skills. As a result, Chick-fil-A has operator turnover of just 5 percent, and the fast-food chain just achieved 43 years of consecutive sales growth. Hire people who you want to become a part of the story of your business, and then watch how your social media story improves.
9. Proactively solve mistakes when they occur. When mistakes happen (and they will) get out in front of customers and admit the flaw; then make peace with your customers. Repair the emotional connection, reduce the concern, and solve the problem. Southwest Airlines reviews every flight every day to know when delays interrupted their customers' lives, whether it was the airline's fault or not. The company contacts customers to explain what happened and, when warranted, sends out LUV bucks for a future flight. Being proactive earned Southwest a net revenue increase from those bucks of $1.9 million in 2010. What can you be proactive on?
10. Accept the order and the accountability. In a world where customers are use social channels as a megaphone to broadcast the experience you're delivering, invest in reliability. Don't make the customer wonder where the order is, how long until it gets there, or what happens when it backorders. If a customer can't tell another customer what they get from you, how they get it, or how it feels when they receive it, they you don't have a story to tell (at least one you want heard). Investing in reliability earns you the right to grow.
Companies that have grown in this economic downturn did so because their customers became an army of advocates who grew their business for them. They earned the right to their customers' raves, and the growth that ensued, because they deliberately made decisions that moved their operations in the direction of their customers and employees. And many times because of how we budget, that commitment must be baked into annually planning. Don’t lose another year of opportunity by letting annual planning pass by without considering these important commitments.
Watch Jeanne Bliss On-Demand along with our other Social Business Thought Leaders.