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Reinvent your category – Be different

January 17, 2018

differentThis past year my daughter and I were in New York City and saw the play that took Broadway by storm – Hamilton. It was spectacular in every way imaginable, but it was also the antithesis of a Broadway musical in every way imaginable. It was different.

According to Broadway League research, the average theatergoer is a 44+-year-old, Caucasian, female tourist. 78% of these attendees have completed college, and 39% have advanced degrees. The average income of a Broadway attendee is $205,000 so clearly, this is primarily an affluent, white, middle-aged audience.

Which is why the traditional Broadway musical is such a hit. They’re packed with big dance numbers, elaborate sets, over the top musical performances and happy endings.

It’s also why most Broadway hits look a lot like each other. Many of them are based on proven stories like Lion King or use iconic music (Mamma Mia or Beautiful) from a popular entertainer/group. It costs between $5-$10 million dollars to launch a Broadway musical, so the risks are huge. Why would someone ever vary from the successful formula?

I think that’s the same question that we wrestle with all the time. When there’s someone in your category (or everyone in your category) that does something in a certain way, it feels smart and safe to do it the same way. The problem is that it’s pretty tough to stand out when you’re just like everyone else. The only way to compete is to outspend the competitors and for most companies that isn’t an option.

Or you can pull a Hamilton. Take everything I just said about a Broadway musical and turn it on its head.

  • The play’s primary spoken style is rap/hip-hop (hardly the language of the middle-aged white woman).
  • The storyline is based on the life of Alexander Hamilton, who is famous sort of. He was chief staff aide to General Washington during the Revolutionary War and our country’s first Secretary of the Treasury (hardly sexy roles).
  • The main character is not a typical hero – in fact, he was arrogant, and his blunders and ego cost him dearly, both personally and professionally.
  • There’s no happy ending to the story – as you know, Hamilton is killed in a duel.
  • The set is a simple, almost rustic wooden set with a single turntable to create movement.

Despite all the reasons why Hamilton isn’t like all the others and shouldn’t be successful by Broadway’s standards – it has broken every attendance record you can imagine. Tickets are impossible to get. It has sold out for months at a time not just in New York but all around the country, and the secondary market (StubHub and the like) sold the worst seats in the house for $700+. It received a record-breaking 16 Tony nominations and many people referred to the Tony’s in 2016 as the Hamiltonys because they were expected to sweep the awards show.

My point – people are not the lemmings we assume they are. What Hamilton creator Lin-Manuel Miranda understood is that being different is marketing gold. Being different means you have less competition, and every dollar you spend telling your story is amplified because it’s not competing with as much noise. He also understood that being different means you get plenty of media attention, which creates curiosity, interest, and momentum.

How can you take your product or service and turn expectations and “the norm” on its ear? How can you authentically (that matters a lot) give a unique twist to what you do so you stand out from the crowd?

I encourage you to identify the 3-4 places where everyone in your industry looks the same and figure out how you could deliver something different and fresh. Hamilton isn’t just a spectacular play; it’s a business lesson we should all pay attention to.

 

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Business development by the numbers

January 10, 2018

business developmentLast week we started to identify some key financial metrics that you need to have a handle on as you plan your business development for the upcoming year in a smart way. If you did the math I outlined last week, you now know:

  • How much of every earned dollar you actually get to keep to spend on your business (salaries, overhead, and profit)
  • How much you can expect to produce per employee
  • If you have capacity with your current staff or if you get new clients you’d need more help to support them
  • If your business is profitable and if so, by how much

Those are the facts you need to make the following decisions:

  • Are you content with your business being the size it is now?
  • Are you happy with your current net profit (amount and percentage)?

If you decide you’re good where you’re at, it’s just a matter of trying to increase efficiencies to be even more profitable or trading up to better-fit customers who will also be more profitable.

But if you think there’s some room for growth, then let’s talk about what you really need.

I want to provide a caveat here. I am really simplifying this process. There is lots of averaging and rounding going on. I want you to understand the concepts and have some ballpark estimates of where you want to take your business and what it will take to get you there. My goal is not to make you a CPA. My goal is to give you some simple tools and metrics to use so that your business development planning isn’t just a shot in the dark.

When businesses set annual growth goals, they usually just pick a number based on historical trends or an impressive milestone they’re trying to reach. “Hmm, we grossed $3 million last year, so how about $3.5 million this year?” Have you already set growth goals for 2018? How much was it? 10% growth? 25% growth? More important than the number – the goal was based on what?

The truth is that most businesses set a growth goal but they rarely know what that actually means or what it’s going to cost them to get there.

This year, I’m going to suggest you do it differently. Let’s use the numbers we discussed last week to put together a projection and a plan that actually has a financial foundation under it.

You’ve now got a significant advantage. You know how much in gross revenue you need to generate to earn (approximately) whatever profit increase you’d like to have. You also know how many additional people, if any, it’s going to take to support that new opportunity.

Let’s assume you have decided you want to grow your profits by 10%. Do the math to determine what that means in gross revenue. If that means you need to have another $250,000 in client work to make that happen, we now know your 2018 gross revenue goal, right?

Will you need to add staff to support the new revenue goal? If so, don’t wait until you’re stretched too thin. Start looking for the right additions now.

Usually, when a business goes through this exercise, they discover that they don’t need as much new business as they feared. It puts the effort into perspective and allows them to build a business development program that’s tailored to their actual need without throwing them into an unnecessary panic.

I’m not suggesting that these are the only financial metrics you need to monitor. But in terms of understanding how to set realistic growth goals, even these basics will give you a factual foundation to put you on the right path.

 

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How many customers do you need?

January 3, 2018

customersBy now, it’s occurred to you that the holidays are not coming back, it isn’t getting warmer any time soon and you’d better get at it. It’s about this time every year that businesses really get serious about attracting and winning new customers.

What happens next is as predictable as the gyms being packed in January. Businesses put together these elaborate, grandiose plans that come with Gantt charts, calendars, and color-coding.

But even with all that planning, two key questions are rarely asked or answered.

How much do we need? And of course the follow-up question should be: and how much could we even handle?

Most business development plans fail because first we get all excited about them but we behave as if we’re trying to create the Mona Lisa and second because we have no idea how much is enough. The truth is most businesses create plans that, if they actually executed on them consistently, would bring too much opportunity their way. They bite off more than they could possibly chew and then they choke on it.

Why are the gyms empty again by February? Two reasons. First – the New Year’s newbies tried to tackle too much and couldn’t sustain it. Second – they didn’t have realistic goals. If they did, they would have been able to scale back their plan to better bring them what they actually needed.

That’s true of the business development patterns of most organizations. We try to do too much because we don’t know the answer to the “how much” questions.

To get to those answers, you need to make some decisions and gather some data. It’s not difficult but it will take a little bit of time and requires us to do some simple math. But if you hang in there with me, I promise it will be worth the effort.

Gather up the following facts from your 2017 financial data.

  1. Total gross billings (Everything you billed/charged your customers)
  2. Cost of goods (All the hard costs you incurred on behalf of your clients. This does not include any costs related to your employees or your overhead. COGS are hard costs like raw materials, what you paid a wholesaler for what you sell retail or if you act as an agent for your clients – buying printing or some other service on their behalf and then charging them for it.)
  3. Your net profit (What’s left over after you pay out all your expenses, including your staff and overhead.)

When you subtract your COGS from your gross billings, you get your net income or adjusted gross income. That’s the number we’re going to focus on. You’ll want to know what percentage of your gross billings turns into net income. Let’s say you bill $1 million dollars and $500,000 is COGS. That means your net income is 50%.

Now, figure out how many FTEs (full-time equivalents) you have on staff. Divide your net income by the number of FTEs you have. That tells you how much net income you earn per employee.

If you’re happy with your net profit number, then your employees are producing approximately as much net income per person as you need them to. If you’re not profitable or the profit number is too low, then you need to increase that per person average by helping your people be more efficient or by re-thinking your pricing model (or one of a million other things).

Next week, I’ll show you what to do with these numbers (I figure you need the week to gather them up) and what decisions you need as you define just how much business development you should be doing.

Gather the facts and next week we’ll use them to get realistic. I think you’ll be both relieved and surprised.

 

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Coming in loud and clear – Podcasts

December 27, 2017

podcastsWhen I was a kid, I loved listening to the old time radio shows that my parents grew up with. The Shadow was my favorite. I loved the storytelling but I also loved the portability — I used to listen when I was mowing the lawn (on my old Walkman, if that doesn’t age me!). Today, my old time radio fix is met through podcasts. There are so many podcasts out there – I don’t care what your interest, personal or professional, there’s a show for you.

I can listen when I’m driving, taking a walk, working out or on a plane. I love video but it requires all of my attention. One of the best things about a podcast is that I can consume them during “down time” and turn it into productive time.

I believe that podcasts are one of the most under-utilized marketing tactics out there today and if you haven’t considered it, I want to make sure it gets on your radar screen.

We probably do them a disservice, calling them podcasts. Who actually listens to them on an iPod anymore? The new term that seems to be gaining momentum is on-demand radio. 64% of podcasts are being consumed via smartphones or tablets today.

Consider these stats (from a study done by Edison Research):

  • 36% of all Americans have listened to at least one podcast
  • 21% listen to podcasts on a monthly basis
  • Podcast listening has increased 23% from 2015
  • Podcast listening has increased 75% since 2013
  • The same number of Americans listen to podcasts as there are Twitter accounts
  • The average podcast listener consumes five podcast episodes a week

This medium has huge potential as a part of your content strategy, but only if you build it with your audience in mind. Podcasts aren’t about selling. They’re about teaching, entertaining or both. Just like I’ve preached about your blog posts, videos or any other form of content — your podcast needs to be engaging and helpful. Otherwise, you will never build an audience.

Here are some other best practices if you’re going to launch a podcast.

Use good equipment: You don’t need to spend big bucks, but you do need to invest in a decent microphone and headphones. You’ll have to decide if you’re going to do the editing yourself or hire someone. For my podcast, I don’t have the time or technical expertise to do the editing/uploading to iTunes etc. I’ve got a great partner who handles all of that for me. If you’re interested in an introduction – shoot me an email.

Time is of the essence: The average commute is 25 minutes. Podcasts that are shorter than 30 minutes tend to have more listeners and get more downloads. But if you are providing high-value content, people will stick around.

Don’t wing it: Even though the best podcasts feel like they’re just casual conversations – they are anything but. You want to do some serious prep for your podcasts. It takes a lot of poise and preparation to sound unrehearsed. At the very least, have your intro and closing comments drafted and an outline of how you’d like the conversation to go.

Consistency wins: This is one of those “don’t start if you’re not serious” marketing tactics. Your efforts will not be rewarded if you’re inconsistent. Podcasting is also not a once a quarter or once a month effort. Weekly seems to be the ideal frequency for a busy brand that isn’t trying to monetize their podcast.

I guarantee that you have plenty to teach and that there’s an audience out there that’s hungry to learn. Why not consider jumping on the podcast bandwagon while it’s still building up steam?

 

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Measure what matters – business metrics

December 20, 2017

metricsA while back, we explored the business metrics that every business owner and leader should be monitoring to keep their finger on the health of their organization. We dug into the purely financial metrics like lifetime value of a customer and profitability.

Today, I’d like to explore the marketing/sales and employee metrics that we help clients define and grow as we work with them. Just as a reminder, those metrics are:

Marketing/Sales

  1. Retention percentage (How many customers did we keep from last year)
  2. New business win rate (How many prospects did we convert to becoming customers)
  3. New business traffic patterns (How are our new customers finding us)

Employees

  1. Employee satisfaction/retention (Average tenure of your team and the health of your team)
  2. Employee value (How much value does each employee contribute to your company and are they continuing to grow/add more value)

Now let’s look at each of these and why they matter.

Retention percentage: One of the truths that many business owners forget is that the largest source of new revenue should be your existing customers. It makes perfect sense. They know and trust you. If you deliver consistently, they should need and want to spend more with you, year after year. Well, to make that work – you have to keep them as customers. When you combine this with customer ratings (how good of a customer are they for your business) you really have valuable insights.

New business win rate: When you get a chance to win a new customer, how often are you successful? If the number is too high, your pricing strategy might need some work. If the number is too low, you might be talking to the wrong people or there’s something else that’s not working. This data will also help you decide if you’re wasting a lot of time chasing after business you have no chance of getting or you’re setting your sites too low.

New business traffic patterns: One of the ways to assess your marketing spend is to understand how prospects find you. When you understand what brings your best prospects to your door – you know where to spend your time and money. Even if your best avenue for new opportunities is through referrals, there are tactics you can strategically employ to enhance the quality and quantity of referrals you get.

Employee satisfaction/retention: The team that serves your customers is a make or break element of your business. Keeping your best performers and knowing that your crew feels appreciated and well prepared to do their jobs is a vital metric for every business. As we enter into an era of scarcity when it comes to skilled and talented employees, this will become increasingly important to your business. Don’t scrimp on this – figure out a way to benchmark and then routinely measure this key metric for your business.

Employee value: Every employer knows that not all team members are created equal and that each of them contributes at a different level. You want to have a very clear understanding of the value they deliver to your customers and to your bottom line as you are determining career paths, salary increases, and bonus amounts. This will also help you decide where to invest for your long-term growth.

Once you decide how to get the data you need to track these metrics, the mechanics are pretty easy. For most organizations, quarterly monitoring will give you a good handle on the trends that have a huge impact on your company’s profitability and viability. This information will also help you determine new opportunities to explore and where you need to keep a watchful eye.

 

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Don’t Cut Yourself Short – Go Long Form

December 13, 2017

long formIn a world where 140-character tweets, Facebook posts, and USA Today style graphics are the range, it’s easy to assume that brevity is the key to great content creation. Add to that the reality that more and more of us are accessing our online news, social networks and other content via our smartphones and it would be easy to make the leap that people don’t want to read long form stories anymore.

That’s the danger in marketing. We observe and assume. There’s a place for that in the mix but we need to check those assumptions against something a bit more objective and with a broader lens than our own experience.

That’s why I was so fascinated by a study out of the Pew Research Center that found that long-form news articles are actually more effective than shorter pieces for audiences viewing the content on their smartphones.

According to Pew, the total engaged time (which they defined as time spent scrolling, clicking or tapping) with news stories that were 1,000 words or longer averaged about twice the amount of time spent with stories of under 1,000 words. The longer articles earned 123 seconds versus the shorter articles being consumed in 57 seconds on average.

Another conclusion we might jump to is that well sure, the longer articles were longer, so of course, people spent more time reading them. But other bits of evidence suggest it was more than that.

Some people dismiss writing longer articles because they think if a browser lands on something that long, they’ll abandon the story without reading it. But the study showed that the long-form stories attracted visitors at nearly the same rate as short-form stories.

Not only did people not shy away from these longer pieces but the truth is, they really dug in.

  • 36 percent of interactions with long-form news lasted more than two minutes, compared with 10 percent for short-form news.
  • 66 percent of complete interactions with short-form stories were one minute or shorter, compared with 42 percent for long-form news.

How the reader got to the article mattered as well. If the long form reader was served up the piece via an internal link, they spent an average of 148 seconds with the piece. If they got to the piece directly or via a link in an email, their time investment dropped to 132 seconds. Social media links got the shortest time span – 111 seconds.

While social links might have delivered the shortest attention span, it was responsible for the most traffic overall, with over 40% of both the short and long form stories coming from one of the social networks.

Here are some other noteworthy observations from the study:

  • Facebook drove the largest volume of social network sourced readers (80%) but those readers are not as engaged, on average, as Twitter users. If someone clicked on a link from Facebook, they spent an average of 107 seconds in longer-form stories, but the amount of time rose to 133 seconds when they came from Twitter.
  • Late night and morning are the times of the day with the highest engagement.
  • Only a very small percentage of readers (long form – 4%, short form – 3%) return to those stories via their smartphones, but when they did, they really invested some time. Return visitors to long-form articles spend an average of 277 seconds, compared with 123 seconds for overall visitors, and those figures for short-form stories are 110 seconds and 57 seconds, respectively.

There are several takeaways from this study but I think the biggest one is that we need to be very careful about assuming that short form copy is the only option in this smartphone driven world.

 

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Silence Kills

December 6, 2017

silenceI had to call United’s 800-number the other day to change an existing ticket. At each step of modifying my ticket, the customer service rep would have to key in some data and then there would be this long silence. I couldn’t hear him typing or even a single breath. I assumed he was still there because I wasn’t served up any on hold music or messaging. But, several times in the process, I’d actually say something just to make him respond because I was convinced we’d been disconnected.

As the call dragged on, I imagined that something had gone wrong. The silence was not only deafening but it made me fill in the blanks. This is not the first time I’ve had to alter a plane ticket. I know the drill and I know it takes several steps and more time than you think it would. But in the past, if there was a long delay as the computer was thinking or the rep was verifying something – they’d say something like “oh, my computer is slow today” or “this will take a few minutes, sorry for the wait.”

My imagination worked overtime as the United rep continued in silence and I wondered what disaster must be befalling my travel plans. As I sat there fretting, it occurred to me that businesses do this to their customers all the time. I’m sure, from the United guy’s point of view, he was doing exactly what he was paid to do – change my ticket in the most efficient and effective manner possible. So he was probably concentrating on the work at hand. He was focusing on the facts of the transaction, not how I might be reacting to his methodology.

Silence breeds worry and uncertainty. Neither is a healthy ingredient for any relationship. The only place silence does even more damage than what it does in our client relationships is the impact it has on our relationships with our employees and teammates. I believe it’s all about vulnerability.

Here’s my “how much should I communicate” barometer. The more the power has shifted in my direction, the more I must communicate. So if you’re the boss or a customer is particularly beholden to you or at risk if you drop the ball – you must overcommunicate to keep them secure.

This isn’t just about being benevolent. When your employees and teammates feel completely in the loop and know what’s going on – they can help you get to the finish line faster and more profitably. They don’t accidentally derail your efforts nor do they make up things in their head that encourages them to intentionally get in your way.

We’ve all done it. We misread clues like a closed-door meeting or someone’s absence and before you know it, we’ve spun a doozy of a tale. That’s not just silly. It costs you money, productivity and in some cases, it might cost you the employee. All because they didn’t understand. It’s your job to over communicate so they do understand.

The same is true for customers. This isn’t just about giving them peace of mind because you’re a kind human being, although I’m going to assume that is part of the motivation. A client who knows what is going on, is given forewarning if there’s about to be a problem and is kept apprised of the status of your work together will stop micromanaging. They’ll stop constantly asking for updates or altering the details.

When in doubt – tell them again. Have you ever had a customer or an employee tell you that you’re going overboard in terms of keeping them in the loop? I honestly don’t think it’s possible. Whatever you’re doing – double it and it’s probably about right.

 

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What does your pricing say about you?

November 29, 2017

pricingLast week, we explored some of the key considerations that a business should take into account as they set their prices. But this week, I want to take a look at what your pricing strategy says about your offerings.

I believe that pricing is a part of positioning and branding that is often overlooked. How you think about pricing may depend on whether or not you’re introducing a new product or service or just rethinking how an existing product or service is brought to market.

Here are some of the most common pricing strategies and what they say about your brand:

Penetration pricing is typically an entry strategy. This is usually used when you’re bringing something new to an existing marketplace or you’re trying to lure people from an existing provider. Think of the types of offers that DISH and Direct offer to get you to switch. This kind of pricing can’t be profitably sustained.

What does it say about you? It says that you are willing to buy your customers and that you’re confident that if they give you a try, they’ll stick around long enough to be profitable. Or it says that they know switching is a big pain, so they need to make it worth your while, hoping you won’t decide to go through the pain again and switch back.

Premium pricing is exactly what it suggests — your product or service is at the high end of the range.

What does it say about you? When you have premium prices, it implies a level of quality and service that the lower priced options can’t match. There’s also an exclusivity to your offer if there are plenty of lower priced options available. To maintain this brand position, you’ll need to work hard to meet your customer’s high expectations.

Economy pricing is being the bargain in the bunch. Think Wal-Mart or generic products. If you can buy and sell in volume, this might be a decent option to consider.

What does it say about you? Depending on how you position it, it can either say you are very committed to helping your customers save money or the items you sell are of low quality. To reassure your customers that you’re watching their pennies, you’ll want to make sure you explain how you can offer such bargains.

Bundling pricing is when you combine items you sell at a special price. It might be a 99 cent dessert with dinner or send one person to a workshop and you get the pre-workshop session for free or at a discounted price. You just need to be careful you don’t give away the farm with this strategy. It’s ideal for recurring revenue where the profits rise after the first couple months of sales.

What does it say about you? This is a great strategy for businesses with long-term customers that might be in the market to buy even more from you. You can bundle complimentary items to tie that customer even tighter to your organization. That gives you more time to sell them even more.

Bracket pricing is the idea of always offering three different options, with the middle priced option being the one you want your customer to select. Research shows that if you offer only one choice – people object to the price. If you offer two choices, the buyer will choose the lower priced option most of the time. But if you offer three price points, the vast majority of buyers will choose the middle option.

What does it say about you? This pricing strategy is all about giving your customers control and choices. By letting them decide which bells and whistles they want, they feel like you’re not trying to force them in a particular direction.

As you can see, there’s a lot more to the underlying messages that come from how you set your prices.

 

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How does your business shape your pricing?

November 15, 2017

pricingAs we head towards the end of the year, we’re going to kick off a series of conversations about money. One of the most overlooked aspects of marketing is your pricing strategy. Over the next couple weeks, we’re going to talk about how you price and sell your services and what that says to your audiences.

Let’s first think about how you determine your pricing and what that says about your value proposition. You have lots of options, and while we might assume it’s always smarter to be more expensive, that actually may not be the best decision for your business.

When thinking about your pricing strategy, you need to consider:

Positioning: How are you positioned in the marketplace, relative to your competitors? Does one of them own the discount or premium position so strongly that it would be difficult to unseat them?

Differentiation: This is related to positioning. The more you can demonstrate a unique value proposition to your potential customers, the more valuable you are and the more of a premium price you can charge.

Your costs: Obviously your prices have to take into account what it costs you to deliver what you sell. Depending on the work you do, the kinds of people you employ, and the materials you need – some pricing strategies may not be an option.

Demand: The more people need/want what you sell, the more they’re willing to pay for it. But demand is also finite. Is this something they will always need/want or is it fleeting like Cabbage Patch dolls or a particular style of clothes.

Time/effort to deliver: Some companies make a widget that they can mass produce and sell at a relatively low cost because there is no customization or manual labor involved. On the flip side, a guy who designs and builds custom furniture by hand has a huge time investment and the value is in the individuality of what he delivers. That’s a very different reality.

Harsh reality: Sometimes you have no choice. Economic conditions, market saturation, inventory issues or some other element of your business may force you to modify your prices, either temporarily or in rare cases, permanently. There is no such thing as forever when it comes to business strategy. We must all evolve or die, and pricing is certainly one aspect of your business that may change over time.

Revenue goals: We often assume that there’s only one reason to be in business, which is to make money. But there are many shades of grey within that. Are you trying to make the most money possible in the short term? Or would you rather make less money every day but have the sale live on for longer? Are you trying to maximize profits or are you reinvesting in something else – be it your company or your community or some population of people that you serve?

Static or elastic: For some organizations, it makes sense that once you set your pricing, it remains the same for an extended period, until inflation, demand or some other combination of influences triggers a one-time price shift. On the flip side, you may sell a product or service that has a lot of elasticity in its pricing. You might run sales or promotions on a regular basis to drive traffic to your location or site. You may have a seasonality factor. If you sell Christmas trees, they’re at a premium price the day after Thanksgiving and at a deep discount price on December 24th.

These elements are the business realities that have to be factored in as you think about your pricing model. Next week we’ll dig into how to think about pricing through your marketing lens.

 

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The review is in

November 8, 2017

reviewLast week we explored how customers have taken to the web, social networks and review sites when they have something to say about a company or any customer service need – good or bad.

This isn’t just a retail problem. B-to-B customers can complain about you on Twitter or Facebook and there are new review sites cropping up every day for professionals ranging from physicians to contractors and everyone in between.

I believe we need to add a whole new capacity to our marketing departments. We cannot afford not to monitor and respond to our consumers – no matter where they speak out. So how do you create this capacity in your company?

Conduct an audit: Do an extensive search and identify all of the places where your customers already post commentary, customer service issues or reviews. Then identify additional places that it’s likely they might post something in the future.

Monitor the sites/do searches to find additional mentions: You need to actively and regularly monitor all the sites you identified in your audit. For most of you, this doesn’t need to be an hourly or even daily occurrence. But at the very least you should be monitoring the sites weekly.

Respond. Every time: This is the tough part for many businesses. It’s easy to say thank you to the good reviews but what do you say to the one star or negative reviews?

You always start with “I’m sorry.” Saying I’m sorry doesn’t mean you are accepting blame or agreeing with them. It means that you are sorry they had, from their perspective, a bad experience. So you can say something like “I’m sorry you were disappointed” or “I’m sorry we didn’t live up to your expectations.” But the words I’m sorry need to be there. Up front and before you offer any explanation.

From there, you have a couple options. If you can’t really address their complaint or don’t know enough of the circumstances, you can continue with something like “We’re always disappointed when we don’t wow our guests, so we will definitely try to do better next time.” If you can address the situation, do so. “You’re absolutely right, we were not at our best Saturday night. We had several people call in sick and we were woefully understaffed. I’m so sorry your experience was tainted by our internal scheduling issues.”

Offer to take the conversation offline: You don’t want to carry on a lengthy discussion of the issue online. So offer to continue by phone or in person. “I’d love to get some more details about your experience, if you’d be willing to tell me about it. Would you call me at the office at XXX-XXXX or email me at yourname@company.com?”

Make amends if it makes sense: If you really messed up, why not ask them to give you another shot on you? “I feel terrible that you didn’t have a good stay. We’d like to remedy that. Please contact me at XXX-XXXX so I can arrange for you to come back on us.” And before you ask – no, this is not going to create an avalanche of bad reviews just so you give away free stuff.

Sign your response: Put your name and your title at the end of your response. You don’t want to be some anonymous employee. You want them to connect with you as a real person.

Why respond? You need to recognize that responding is both a customer service issue and a marketing function. You may or may not be able to change the reviewer’s opinion of you. But how you handle it (or if you ignore it) speaks volumes to everyone else reading the review.

Respond with authenticity, with grace and humility. But respond. Every single time.

 

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