Last night, we held our third annual Thank You Celebration at the beautiful World Trade Center Seattle.   About 50 of our clients and colleagues from Mill Creek to Kent and Bainbridge to Sammamish in industries ranging from retail to manufacturing to engineering to professional services fought the exceptionally heavy traffic (sorry, guys!)  to celebrate a year of growth for Equinox.  We could not have achieved it without you all and sincerely thank you! 

The wine and beer flowed along with yummy snacks and plenty of great conversation and a number of new relationships were built.   Visit our Facebook page to see a few photos of the event!

We are planning some wonderful events for 2012 and would love your input.  What are your biggest opportunities and challenges?  What business topics are you interested in learning about?  What speakers can we bring in for 2012 Focus Events?   Post your ideas on our Facebook page and we’ll try to build them into the 2012 lineup!

As we prepare for our annual Thank You Celebration,  I would like to express my thanks to folks that really made a difference for me this year — I hope you all know who you are! 

1.  Our employees who have worked hard to not only serve our clients but also to build the infrastructure we need to fully and completely support our clients’ needs as the firm grows.  There have been some growing pains.  Thank you for your hard work and loyalty!

2.  Certain key referral partners who rely on us to provide the highest quality service and deliverables to their clients. Thank you for your trust and for the joy that comes from working with exceptional people like you! 

3.   Key advisors who provide another set of eyes and ears that help us navigate some of the tough decisions in business.  Thank you for your candor and insight!

4.  Our clients who trust us to help them make smart, informed decisions so they can build strong companies with value for the future.  Thank you for your business, your loyalty and your inspiration!

5.  Last, but not nearly least, my family who supports me and balances me in this journey to create a law firm that is unique in its service to business owners.  Thank you!

I am fortunate to find myself where I am today.  I love what I do and am very proud of what Equinox has become.  Much of it is thanks to the folks above.  I look forward to what 2012 will bring!

David Dallaire founded Fennec Consulting after a twenty year international career working with Fortune 500 companies. He advises clients who are looking to improve their customer’s experience.

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There are many facets to creating a “Customer-First” business culture. Every part of your business should feel responsible for its customers and constantly redesign itself around behaving that way. Three core areas I always focus on are Management, Marketing and Sales, and Operations. These core functions can make high-impact changes that can generate improved customer experiences, better employee morale and higher margins through improved sales. For every major function or process in your business, the question should be asked – “How to I design this around my customer”?

In 2011 businesses are working harder than ever in a tough sales environment to squeeze more profits from their bottom line by improving “productivity”. But by focusing on their own productivity and not their customer’s, they may actually be hurting themselves not only now, but even more when the economy comes back. An example from one of the legends of the high-tech industry, Panasonic founder Konosuke Matsushita, is instructive. When the Great Depression started in 1929 he had to halve production. Faced with a complete disaster, he took a long view of his business and moved all idle staff to Sales while continuing to pay full salaries. His employees spread out around the country with samples of an innovative new lamp he had invented for bicycles. After leaving one in each of the hundreds of bicycle stores they visited in a visible display location with the light switched on, shop owners could not help but notice how long the batteries powered the light, and demand soon returned allowing him to restore production to beyond its previous levels. Matsushita had demonstrated an ability to make his customer more productive by offering superior value in the worst economic environment possible.

Fast forward to 2011, and business models where customers are perceived to be a lesser priority than profits still abound.  Call up a business you patronize and you are likely going to be greeted by a computer voice that might even have the audacity to ask you 4-5 questions and require you to say a list of numbers out loud before you can reach a live voice.  Clearly you are dealing with a business that has determined that their productivity matters more than yours. Your time, their money. As you engage with all kinds of businesses during your day, thinking about your own productivity as a customer will illuminate dozens of examples for you. But turn that around to your own business and try to see it through your customer’s eyes – are you making them more productive?

Mike Pritchard is President of 5 Circles Research, providing full-service market research and also helping clients improve their own surveys.

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While there is plenty of evidence that customer satisfaction is linked to profitability (e.g. http://www.burke.com/Library/WhitePapers/B.WhitePaperVol5Iss3.pdf ) , some wonder if profits will decline by doing too much. One reason for these concerns is when improvements aren’t directed at the right groups within the customer base.

The Secure Customer Index® (combining overall satisfaction, willingness to recommend and likelihood of continuing or repurchasing) is a powerful tool that can profile customers into groups and then determine which potential improvements will have the most impact.  The Secure customers are those who are most satisfied overall, most likely to repurchase, and most likely to recommend (scoring top on all three questions).  These are the most valuable customers overall – because they buy the most, are the best advocates, and generally cost less to service. They probably won’t need expensive changes to remain classified as secure, but it is important that the company continues to provide appropriate support to keep them in the category.  Satisfied customers score top or second for all the three questions. Improvements that will improve satisfaction among this group are the most likely to pay off because these are people who are already favorably disposed to the company, and are the easiest to move to the secure category where they become even more valuable. 

If improvements (such as additional features, better quality, or better customer service) are what the Satisfied customers want, those are the things that should be prioritized highest. Such changes are likely to be appreciated by the Secure customers also. But if there are improvements desired by the Secure customers that aren’t going to make a difference to the Satisfied, consider whether these might be over investments. This distinction can be determined by analytical tools such as multiple regression analysis perhaps using derived importance rather than stated importance. [“your debutante just knows what she wants. But I know what she needs.”, Bob Dylan]

Profiling customer in this way also helps with marketing and sales efforts. The other two groups are Dissatisfied (scoring low on any measure) and Indifferent (everyone else). It may not be possible to move the Dissatisfied to the Satisfied without major changes. Perhaps they aren’t a good fit in any case.  By identifying the characteristics of the groups, the sales force can be instructed who will most likely be a satisfied customer and should be targeted. Perhaps it sounds harsh to prioritize this way, but in these times of limited budget and eroding profits, it is far better to serve good customer well than to spread efforts too thin.

What drives customer loyalty? Customers are loyal to businesses when their expectations are met time and time again. In my opinion, the execution doesn’t even need to be exceptional – it just needs to consistently deliver on the promises made. The biggest challenge faced by business owners is how to deliver consistently every time.

A marketing colleague of mine laid this out plainly for me in the context of restaurants. People are generally risk averse. As a small business, you’ve got to first get them in the door with promises you make. You must then deliver on those promises, so they come back again. When the customer returns, you must deliver again in exactly the same way. If the experience changes each time, the aversion to risk will kick back in and make them hesitate to come back. To perform consistently time after time is incredibly difficult for smaller businesses. Larger businesses have infrastructure and processes built to drive the same experience. Customers know exactly what to expect every single visit. This is exactly what makes a franchise worth the money paid for it. So, how can a small company create customer loyalty?

Promises Made. First, the company must understand what promises it wants to make to customers in its messaging, effectively communicating those promises, and delivering on those promises. In many cases, businesses don’t even realize that their messaging is setting customer expectations that they cannot satisfy.

Processes Created. The organization as a whole must deliver on the promises made. The delivery is executed by the team. A constant struggle, though, is how to deliver results consistently. Consistency is created through well-defined processes. These processes become core elements of the company’s existence and, therefore, build value for the company and its owners.

Intellectual Property Protected. To execute consistently, the processes in a business must be shared throughout the organization. Remember, though, if there’s a “secret sauce” in what you do, something that keeps the wheels well oiled that only you do, make sure you either keep it under wraps or ensure your employees understand that it is proprietary to the company and cannot be used or leveraged by the employee should he or she leave the company. Companies should have agreements in place with employees that ensure confidentiality of certain information, restrictions on contacting or soliciting customers or employees following termination, and damages for breaching these “restrictive covenants.” The damages element should be as specific as possible and include a dollar figure for monies owed if the employee discloses confidential information or steals an employee or customer of the company. In addition, the agreement should ensure that any processes or inventions created by the employee while working for the company belong to the company. These terms can be a part of the offer of employment or contained in a company’s employment manual. I want to emphasize that such restrictions are highly scrutinized by courts and are extremely situation specific. They must be carefully crafted as enforceability differs from state to state. The key factor, though, is to make it clear to employees and third parties that the company values its intellectual property and will enforce its rights.

Customer loyalty is about delivering consistently to your customers.  How you do this comes from processes executed within your business.  To the extent you can leverage well documented, well managed processes in your business, you will outperform your competition and keep your customers coming back for more.

Our guest blog post comes from Tom Andrew of Northwest Business Advisory.  Tom was a speaker at our Equinox Focus Event on September 28.

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Consider the following scenario: You have built up a successful business from scratch. You have labored to establish a loyal customer base that can rely upon your product or service without reservation. Your employees are qualified and well-trained. All is well with the world. Retirement is ten years away.

But then, something unforeseen happens to you: a debilitating illness, an unfortunate accident, even, although you don’t like to think about it, your untimely death.  What happens then to those years of hard work and sacrifice?  How much of your company’s success and longevity is dependent upon your steady hand on the tiller?

Succession planning is a topic like life insurance.  It only matters when it matters.  If the value of your estate is dependent, even in part, on the ability of your family to realize that value, the subject of planning for your withdrawal from the business is far more urgent and important than we often recognize.  It needs to be addressed as soon as you have built your business into an enterprise that has value.