By Mike Jiggens
Retaining “satisfied” customers is not in the best interests of a landscape contractor, nor will it contribute to a business’ growth, an audience of landscape contractors was told in January at the 44th Landscape Ontario Congress in Toronto.
Motivational speaker Bill Hogg, owner of Bill Hogg & Associates in Aurora, Ont., said keeping merely satisfied customers actually kill a business.
“Satisfaction is worthless,” he said during his keynote address.
To illustrate his point, Hogg recalled a hotel visit he made during a business trip to the United States. Upon checking out, he was asked to fill out an evaluation sheet to assess various aspects of his stay, filling out scores of five on a scale of one to 10 for each specific item. When asked why he chose to take a middle-of-the-road approach, he said he was satisfied with aspects of his stay, but with nothing more or nothing less.
Confused, the hotel official asked what more could have been done to achieve higher scores. Hogg cited a number of reasons for his scores, noting that although his name was in the hotel’s system – having stayed there previously – he wasn’t welcomed back. Nor was he asked at reception if he had a chance to eat. When he asked for a recommendation to dine at a nearby restaurant, he was sent to one a short distance away, but found it closed upon arrival. In the end, Hogg said he was merely satisfied with his stay.
Returning to the same city a short time later for another business trip, Hogg opted to stay at another hotel that was closer to his conference site. There he was given a warm cookie upon his arrival and was offered a complimentary shuttle ride to the airport when he checked out. The cost of his stay was also about 80 per cent of his previous visit to the other hotel. He said the choice of preferred hotel was obvious.
“The more expensive organization was relying on the thread count of their sheets –maybe – or the quality of art on their walls, but what they didn’t understand was twwhere are some fundamental things that are important to people, and they didn’t understand what was important.”
Hogg said what meant most to him was the feeling that he was important.
“By handing me that cookie and offering me the service of a ride back to the airport, they created a connection with me that the other place didn’t.”
The hotel example can be applied to the landscaping world, he said, adding the reality is that 75 per cent of customers will leave and do so gladly if they are merely satisfied or less than satisfied. They will walk by a business they are simply satisfied with and go to a competitor further down the street, he said.
Satisfaction gets you nothing
Being less than satisfied can lead to anger and litigation, Hogg said, while more than satisfied means happy and loyal customers. Satisfied is only slightly better than “pissed off” and frustrated, he added.
“Satisfaction gets you nothing. What it gets you at most is an invitation to come back and do business with them again. You haven’t pissed them off so much that they’re saying, ‘We’re not going back.’ All you’ve done is retain the right where they might consider coming back to visit you again.”
A man will return to the same barber over and over because he trusts him to cut his hair to his liking. He counts on his barber to bring out the best in the customer.
“That’s loyalty,” Hogg said.
There’s a notable difference between a satisfied customer and one who is loyal, he said. The satisfied customer focuses on price, and if he can find a better deal elsewhere, he’ll go there.
“They shop around for the bargains and are easily lured away by the competitor’s deal.”
Hogg said the satisfied customer is not emotionally connected with a business and will buy less. He will test a competitor’s offerings and will have no compelling reason to return to the original business.
A loyal customer, on the other hand, will focus on value and the relationship. Hogg said businesses that don’t have such customers have problems.
“Your business is built on shaky ground. They’re (loyal customers) willing to pay a premium. They’re not willing to pay a premium necessarily because you’re doing a better job. They’re willing to pay a premium because they trust you will do the job you’re committed to, it will be done in a timely manner and it will be done right.”
Hogg said it is worth a premium to him if he hires a landscape contractor who will shovel him out after a heavy snowfall so that he can arrive to work in time. When he first hired a landscape contractor, he was his only customer on the street. In recent years, several of his neighbours have hired the same company to look after their properties. Consequently, the contractor’s costs have been reduced because he’s already in the neighbourhood and can service all properties in one stop.
The contractor added to his clientele because the neighbours saw the quality job done at Hogg’s residence. He said his landscape contractor might make a mistake once or twice, but will always take the time to fix things and make them right.
“It’s a one-time slip-up. It’s not a history or a pattern. These are the kind of things that separate loyal from satisfied customers.”
Satisfaction is worthless
A satisfied customer is a contractor’s worst enemy. The contractor gets that customer’s business year after year because of where he sits and not because of the quality of job that creates loyalty.
“If you’re spending your time searching for slightly better than pissed off and angry, then you’re probably not building a strong, long-term business. You have no room for error and no room for margin because you’re constantly competing on the basis of price.”
Most contractors believe they are undervalued for the job they do, Hogg said.
“Satisfaction is worthless and loyalty is priceless.”
Contractors who don’t create programs aimed at building loyalty with their customers are building their businesses on weak foundations, he said.
Businesses wishing to connect with people will have to connect with them emotionally. Doing so gives the business the ability to get people to take action, Hogg said, adding, in advertising, trusts sells the product.
“How are you creating an emotional connection with your customers?”
Hogg said the trust he has that his landscape contractor takes care of his gardens so that they don’t look like “crap” when friends come to visit is an emotional connection that has been made.
“I trust that my lawn will be mowed in a timely manner and that it will look good.”
He said it’s the trust he develops with those who perform the job that keeps him on as a customer.
There are two types of loyalty, he said – loyalty of convenience and loyalty of allegiance. A person might be reluctant to change cell phone service providers because it may mean having to change apps and move stored photographs and other saved data.
“How many of your clients are with you because of convenience?”
Hogg said contractors with customers of that nature in their mix need to learn how to get them out of that category.
Loyalty of allegiance is based on emotion, he said, because customers trust the contractor will do the job.
“That’s why I have my snowplowing done by the same guy. I know he’s going to do a great job for me.”
It’s an emotional connection tied to the service delivered, Hogg said.
He reflected on his relationship with a lawn care operator who had taken the time to introduce himself, discuss the program options his company provided and ask if there was anything else he could do. Hogg said he no longer had a connection with the lawn care company itself, but more with the individual who represented the company.
“He made sure that we understand that he has everything under control. He takes three minutes once a year to meet with his customers, but that small amount of time he has devoted to customer relations has escalated my loyal relationship with him five to 10 times.”
Hogg said that’s how to develop a solid business relationship, adding it’s simple and there is nothing fancy about it. It’s the connection that helps build a business, by letting customers know there is care.
“You have to let people know they’re important to your business. They’re not just a number. They’re not just a customer. They’re a person, and you understand what their needs are, what their desires are, and what’s important to them.”
A lack of customer service is why customers switch to another landscape contractor, Hogg said, adding they rarely switch because a product is wrong. Customers will be lost to a competitor from time to time because that business may offer something the other doesn’t. Often, however, it’s because a relationship has become stale.
“Maybe they (customers) feel like they’ve been taken for granted. Maybe you need to spend a little more time creating that connection. Other people can do things better than you, but if you have a great customer service relationship, it will go.”
Businesses that wish to protect their margins and profitability must strengthen the emotional connections with their customers by building on a strong customer service foundation that can never be duplicated or taken away, Hogg said.
Customer service is not a goal, but an outcome, he stressed.
It’s not just the connection between the landscape contractor and the customer that matters, but the relationship between the contractor and his employees, Hogg said. There is customer satisfaction and there is customer engagement.
Satisfaction is about the needs of the individual that are met through the relationship with the organization, rationally connected based on the employee’s needs. He may wonder if he’s paid sufficiently or is given adequate vacation time.
Engagement is when the employee aligns his priorities, goals and desires with the needs of the organization and begins to see both his and the company’s end goals as the same.
Hogg said a contractor who hires people who simply show up could potentially achieve satisfaction, but not necessarily engagement. He said the employer must observe his employees to see if they believe in what they do and if they feel they’re making a difference.
“Do they take pride in their work? If they don’t take pride in their work, what quality of work will they have? Do you treat them well?”
Hogg said research shows that employees’ attitude toward the job and the company has the greatest impact on customer loyalty and the financial elements of the business.
“If you have happy, engaged people working in your organization, that will have a much greater impact on your bottom line results.”
Solid employee engagement is based on the leadership of the employer, he said, adding it will show if an employer isn’t motivated or excited about what he does. If he speaks negatively about others, including customers, his employees are apt to behave in the same manner.
“However you behave is exactly how the people in your organization are going to behave.”
It’s easier to create a work environment that allows people to work at an exceptional level than it is to hire exceptional people. Landscape contractors tend to hire people they feel good about, but if employees are no longer energetic and productive, they usually reach that point due to a direct tie with the company’s leadership culture, Hogg said.
“At the end of the day, you better make sure you’ve got your people right. If you don’t have your people right, then I don’t care how great your company is. I’m the guy who can kick your ass with an inferior service because I’ve got a better customer service experience.”
Hogg said it all comes down to having individual meetings with the company’s customers, adding it’s critical that opportunities are made for such face-to-face get-togethers.
“That’s the moment of truth, the opportunity for you to engage. You need to look for opportunities to engage like that. You need to look for opportunities to let them know you’re there to serve and that you appreciate them. That’s what’s going to create that emotional connection.”
Hogg’s take-home message to his audience included four key messages:
- Satisfaction is worthless.
- Emotional beats rational.
- Exceptional customer service is not a goal, but an outcome.
- Organizations do not own the customer experience. The people do.