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CRM Author Hanks Points To 3 Key Tenets For Retailers To Win The Customer Race

 

Rich Hanks never set out to be a business author, guru or academic superstar. As chairman and president of automated feedback solution provider Mindshare he simply wanted to publish a book that contained usable information for executives struggling with the practical applications of customer service and how that service hits or misses with customers.

Now that “Delivering and Measuring Customer Service” has hit its second printing, and counts Stephen Covey, Harvard’s Clayton Christensen and CarMax chairman Bill Tiefel among its fans, Hanks is applying his simple approach to a complex set of economic conditions.

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“I feel more strongly than ever, regardless of the economic conditions, that simplicity is needed,” he says. “Sometimes we want to do the coolest stuff or try thelatest marketing fad, but maybe we need to stay with the basics right now.”

However, don’t mistake Hanks for a Luddite. He was an EVP at Marriott, where he led the marketing strategy, sales, distribution and revenue management efforts for Marriott’s 13 lodging brands and $18 billion in sales. He led Marriott onto the Internet, prompting Bill Gates to refer to him as an “important Internet champion” in his book “Business @ the Speed of Thought”.  He also spent several years at PepsiCo’s Frito-Lay Division in Strategic Planning, and with Price Waterhouse as a CPA and Management Consultant.  His book, which is self-published, strides between customer feedback, satisfaction, data analysis, employee motivations and management advice.

For retailers, he comes back to three main customer strategy tenets that he firmly believes will provide the best chance to compete and win.

The first is customer retention. Regardless of the numbers consulting companies will apply to this concept, such as McKinsey’s famous “customer acquisition is ten times more expensive than retention,” Hanks believes the overarching importance of this argument involves loyalty. Current customers have the potential to become loyal customers. Loyal customers will be more profitable and generate new customers through their recommendations. Even in the current retail environment in which customers have most likely shopped outside of their patterns to hit discounts, he stresses retention above all.

“Do everything in your power to keep current customers,” he says. “If retailers are looking at spending money on TV for example to get new customers, I would say you need to revisit that spending. Don’t be extreme about it, but unless you’re a brand new company, that customers you have are going to generate the stories and recommendations that become your best acquisition tool.”

His second principle is the imperative of delivering customer service and measuring its effects. Unless a retailer is at the low end of pricing (WalMart) it’s the only way to win. Surprisingly, Hanks recommends a mix of qualitative and quantitative information to measure customer satisfaction. The automated part of that data equation must be accessible to everyone in the company, he says. The qualitative part can be delivered by empathetic executives.

“At Marriott every new hire worked in a hotel for two weeks,” he says. “Empathy means you have the ability to see something from the other person’s perspective. It’s an essential skill.”

Hanks’ third takeaway is based on execution. Good strategy is fairly common when it comes to customer service; good execution is not. The key is front line employees, who make $10 per hour and are the face of your company, are the key to that execution. “Hire friendly and teach the skills, as Bill Marriott used to say,” he says.

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