In episode #41, hosts Elizabeth Larkin and Gene Marks talk a small business owner through the process of speeding up her customer service game. In the second segment, we discuss business plans. Do you need one? Can you business function without a business plan? Find out in this episode of the Small Biz Ahead Podcast.
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- Do You Want Your Small Business to Be Better at Customer Service? Accept That Everyone Is in Sales
- Four Key Reports That Will Help You Deliver Better Customer Service at Your Small Business
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Elizabeth: Okay. We’re back with another episode of Small Biz Ahead and I just realized that I always open the show with the same word, okay.
Gene: Okay. It’s like a Canadian show. Okay.
Elizabeth: I’m going to stop doing that. By now I’m sure our listeners have started to hear some of the ads for our eBooks that we have created on Small Biz Ahead. If you’re looking for those eBooks, you can always find them in the show notes. You can find the show notes by going to smallbizahead.com and on the right, in the navigation bar, you click on podcast and then all of the podcasts are there with the links we talk about, the transcripts, and in the show notes there will be a link to those eBooks.
I definitely want you to consider downloading the eBook “Keep Customers Coming Back For More” because we’ve been talking a lot about customer service recently. We had a writer who went and tackled this issue. He did a ton of research and it’s really about how to keep a customer happy and loyal to your business.
Gene: Right. Right.
Elizabeth: I can’t remember the exact percentage but it cost so much to attract a new customer that you actually make more money keeping your current customers. You should be … I know we always talk about growth strategies and stuff.
Gene: You learn that in like Business School 101 is that the cost for selling to your existing customers is significantly less than the cost of acquiring new ones and across the board – and I’m guilty of this too with but so many of my clients – we all admit that we don’t do enough selling to our existing customers. Here you’re providing a product or a service and you build up a relationship over the years because business is all about relationships and they would listen to you. I always think – getting off on a tangent – I have a client and these guys actually sell parts in the automotive industry and their sales guy, he sets up times with customers. He’ll go on the road. He’ll go to like Houston and then he’ll set up ten appointments in the Houston area and he’ll stop in customers. He likes to walk around the customer’s location and just make recommendations and just say, “Listen, we’ve been in the business for a long time. You know, we know another supplier that you could probably get that to you for a lot cheaper.” You know what I mean? “I see you’re doing this over here and use that piece of equipment and we have customer that uses something that might be …” Providing like a value add.
Gene: He always walks out of there with opportunities for himself. He’s like, “I didn’t realize you guys were buying that. We supply a very similar product to that as well.” If you really make it your point to engage with your existing customers, you will bring out so much more business from that. It really does work.
Elizabeth: Yeah, that’s a great strategy. I always think of the cable TV thing. Current customers, the rates are sky high. In order to get the new customer in, you’re going in at the super low rate and then once you’ve been a customer, they jack your rates up so much.
Gene: Yep. It drives me up by the way. I can’t believe you … Now you’re putting me in a bad mood. I’m paying whatever I’m paying to our cable TV provider and then they’re offering deals for new customers and I’m like, “Yo, what am I like? You know. Offer me a deal. I’m an existing customer.”
Elizabeth: I wonder could you cancel for a day and then call back and go, “I changed my mind.”
Gene: I’m going to imagine that that probably couldn’t happen and they know me that I’m a huge TV fan and that we’re living in an age of TV renaissance. I’m not going to cancel my cable subscription. Never going to happen.
Elizabeth: Now might be a good time. There’s no Game of Thrones on. There’s no Veep. There’s no … What was the other one? Oh, Silicon Valley.
Gene: Silicon Valley is another good one. Let’s not get even started on all the different shows.
Elizabeth: Alright. We’re going to be right back with our first question which is about resolving customer service issues.
QUESTION #1: Resolving Customer Service Issues
Elizabeth: We’re back with question number one. This is from Paulette in Iowa. Paulette writes,
“I run a small mail-order store that sells beads and jewelry-making supplies. I notice that it takes my staff at least four business days to resolve customer issues. As a result, we have lost a couple customers. I think if we could get that number down to two business days we would fare much better. How and where do I get started?”
Gene: Ooh, pick me.
Elizabeth: Gene actually wrote an article about this recently which I’ll link in the show notes but take this one.
Gene: You often say that I wrote something so and you expect what I’m going to talk about is what I wrote. I have no recollection of what I wrote. I’m sure it was fantastic but I just don’t even remember. I can tell you right now what clients of mine do when it comes to customer service issues and trying to reduce the time. If you have a CRM system, a customer relationship management system, or listen, you don’t have a CRM system. You have a spreadsheet. You have a process in your office that if a customer calls with a problem, it gets logged in. You have a log. It gets assigned. Really. These are great. Whenever you call for support from big companies, they always give you a ticket number, right? There’s a process.
Elizabeth: And I pretend to write the ticket number down and you know I’m not writing the ticket number down.
Gene: You’re right. Forget it or whatever. There are so many great … Besides the CRM system, there’s a fantastic system online help desk. Zendesk is a fantastic one which I could recommend. I think there’s another one called Freshdesk which you could look up, Elizabeth, if I’m correct on that. Help and support. Very, very simple for your customer service people or your employees to just log in what the issue is. Why do you want them to log into your CRM system or under a help desk system? Because then automation takes over.
The minute that a customer service issue gets opened up, maybe if you’re in a small enough company, you get an email about it right away. Wherever you are, you’re out to lunch or whatever, “Such and such customer opened …” You can respond back to them, “Make sure you check on this or do whatever.” If that issue has not been resolved in twelve hours, you should be alerted about it again or somebody else senior in your company could be alerted again. If there’s been any changes to the issue. For example, if somebody’s working on it or they whatever and they make a note to the issue ticket as well, the customer gets notified by an email. At least the customer is not getting angry. “They’ve got it. They acknowledged they’re working on the issue. I see it, whatever.”
Gene: If customer service is your issue and you’re getting calls in with … every company has that. You want to have a good system in place, an automated system to help you do that. The next thing that you do and the way you use these systems is – I have some great clients that do this – every week I can think of one guy in particular and he runs a computer technology company that he runs, he gets a weekly list of his issues. Issues that were generated last week that are still open today and they’re aged. He wants to know problems. He walks around saying, “I need to know all open issues right now. How long have they been open? Who’s working on them? What was the last thing done? What’s planned next? When’s this going to be resolved?”
Elizabeth: Can your CRM do that?
Gene: CRM can absolutely do that as well as a Help Desk system like a Zendesk can do that as well.
Gene: These are all just very simple procedures that you can do to make sure that nothing falls through the cracks and that you’re being alerted to make sure the issues are being followed up.
Elizabeth: How would … Now the boss has this report and she sees – it’s Paulette – sees that, “Okay, we’ve got two open issues and they’ve been opened for five days.”
Gene: Right. First of all, that should not happen. Right? Hopefully, she’s known about this on day one so it hasn’t gotten to five days. So let’s assume … If it’s still open after it’s been four days and Paulette, she’s got to be aware of it, then she’s got to take actions. Your very first action as the owner of the company is you’re probably calling the customer. “I just want you to know this issue has been opened for the past four days. I’m the owner of the company. I get it. We’re working on it.”
I had an issue – this was a couple of weeks ago – it was our own CRM system. I was having a problem with it and I reached out to the vendor and they’re like, “Okay, great. We’re going to work on it. We understand. It’s whatever.” Then like twelve – fourteen hours go by and I heard nothing. It’s still not resolved and I heard nothing. As a customer, you’re like, “Come on.”
Elizabeth: That happens all the time.
Gene: It does. Like when you’re waiting for a flight at an airport and the flight’s delayed. You got the person at the gate sitting there looking up in space or whatever. “Do you mind giving us a little information? What’s going on? Any estimated time?” Even if you have no information to give, would you mind just saying, “We have no information for you right now. We’re working on it. We respect your time and the fact that you’re having this issue.”
Elizabeth: That’s all people want to know.
Gene: That’s all they want to know. Yeah. A good system like that, you should never get to five days, but if you do, it certainly shouldn’t be a surprise. You should know about it along the way and so should your customer and know you’re working on it.
Elizabeth: I’m having this issue right now where I ordered a t-shirt from a company online and it’s kind of a specialty t-shirt but they didn’t like print on-demand. It’s like a new small business. They sent it. I decided I didn’t like the color so I said I’d do an exchange instead of a refund so I shipped it back.
Gene: What color was it originally?
Elizabeth: It was like green so I shipped it back …
Gene: You don’t like green? Green’s okay.
Elizabeth: I like some greens. Not all greens. I shipped it back over a month ago.
Elizabeth: I have not heard back. I know it was delivered because I kept the thing so I emailed them and they’re like, “Oh yeah. We just received that in the warehouse. We’re going to send back your …”
Gene: Amateur hour. It’s just an amateur hour.
Elizabeth: The thing is, even if I get … Oh, and that was two weeks ago and I haven’t receive it yet so like I don’t even know. I’m going to have … The fact that I have to keep emailing them.
Gene: I know. It’s crazy when you have to … When you’re the one who has to babysit this company and not be getting any updates from them. It’s so, it’s so … It’s just a diss. It’s just amateur.
Elizabeth: I feel like technology, like my bank or my credit card or something like that, they’re better about that stuff.
Gene: Yeah. Yeah.
Elizabeth: There’s no excuse for even a mail-order business to be spending four weeks this issue has been open and I’ve had to email them each time.
Elizabeth: Even if I end up loving this t-shirt, I’m not going to buy from them again.
Gene: Somebody at this company, if they get a report of any open issues, open returns or whatever, the owner of the company should be getting that and be questioning, “What is this woman? She’s been waiting for a month and nobody’s reached out?” You got to know what’s going on within your business and my God, there’s so much inexpensive technology out there today that will help you do just that. Good CRM systems will do that. Zendesk, Freshdesk, there’s a bunch of them.
Elizabeth: What is the pricing on a Zendesk?
Gene: I don’t know. I really can’t tell you that off the top of my head so we can look that up and see. I don’t know. Twenty bucks a month a user? Maybe I’m completely out in left field here. It’s not a killing.
Elizabeth: If your CRM can do that and you already got a CRM …
Gene: Then you can also make that happen as well. I agree.
Elizabeth: Alright, we’ll be right back with question number two about a sculptor after this.
QUESTION #2: Putting Together a Business Plan
Elizabeth: Okay, we’re back with question number two. This is from Bryn from California. Bryn writes,
“I’m a sculptor and I really want to start selling my pieces as well as those from artisans in my area. I have enough money for a small storefront and supplies so I don’t think I’ll need a loan from a bank. Do I still need to put together a business plan?”
We have talked about business plans before and I know how you feel about this.
Elizabeth: I would say yes but it does not have to be a big extensive thing. I think you should spend a couple, a day on it maybe but get down on paper who your customers are, how you’re going to market to them, what your financial strategy is going to be. Don’t spend a lot of time on it and I think Gene would agree with that.
Gene: Yeah, 100%. Let’s recap this. This guy, Bryn, is a sculptor.
Elizabeth: It’s a woman.
Gene: It’s a woman. Jeez. I keep messing that. You know my name is Gene and a lot of people think that’s a woman’s name too. G-e-n-e.
Elizabeth: But it’s spelled with a G.
Gene: Yeah, it is. So it’s Bryn and Bryn is a woman. She’s a sculpture, a sculptor, and she wants to sell her pieces so she’s not in business yet so I’m assuming she’s got some other source of income right now. Maybe a job or something like that and she wants …
Elizabeth: Maybe she’s just a free-wheeling person.
Gene: Fine. Good for her. She does have enough money for a small storefront and supplies. She doesn’t think she’s going to need a loan from the bank so she can afford to open up her own business. She got product so first of all, my question is how do you know you’re going to sell these products? This gets back to having a plan. I would be like really averse to signing a lease for a storefront where you have to commit to a year or two years in advance and buying supplies if you don’t know what your market is going to be.
Nobody … One thing I’ve learned from big companies is that big companies do not invest in new products or services or ventures blindly. They know. They do their research beforehand that there is a market there. The first thing I would say, “Bryn, is it possible that you could be selling some of these sculptures, generating a little bit of income from them from an Etsy, an online site or even just doing out of your house first before you’re spending money on a storefront?”
Elizabeth: I’m going to assume. She doesn’t say that but she has to be doing that. If she’s going to like fairs, festivals, like she’s selling them somewhere.
Gene: I hope so.
Elizabeth: She says she wants to sell items from artisans in her area so basically what’s she’s going to be doing is starting an art gallery.
Gene: Yeah, well. The first thing that I just want to make sure of is that she actually does know her demographics and knows she’s going to be able to sell this. As far as putting together a business plan, yes she does need to put that. This isn’t a 10-K filing for the SEC. This doesn’t have to be some twenty-five page business plan for a bank. What this has to be is basically a spreadsheet is your plan, isn’t it? Your plan is you have to forecast – this gets back to knowing what your market is – you have to make some forecast as to what you think your revenues are going to be and then you got to match this out. This is over the next two years.
What your line … If you’re going to commit to a retail space and you’re going to pay two-thousand dollars a month for your lease and then you’re going to want to buy supplies or whatever, you have to then spread out on a spreadsheet what your costs are going to be over the next eighteen to twenty-four months. Make some assumptions on the revenues and make sure before you take this leap by planning that you’re actually going to be having some cash flow out of all of this. That’s the business plan.
Elizabeth: Since she does say start selling her pieces …
Gene: I just get the inference that she hasn’t done this yet. You know what I mean. That’s why I just get concerned as to whether or not she’s just jumping into it. People get romanced by starting up a business. She’s like, “Oh, I’m going to be a sculptor and I’m going to open up a store and we’re going …” The harsh cold reality of the world is that this all costs money and you’re going to commit to something that you just really unsure you’re even going to sell a single sculpture. I really want to make sure that there is a market for this and maybe you have some track record first and then you expand into having a store then you can develop from there.
One other thing is and this is a little off topic of a business plan but if you’re a sculptor, can you rent out space from an existing store? Can you share some space just to prove that there’s a market there for people?
Elizabeth: That’s a great idea.
Gene: If you rent out space or you share space of an existing store, even an arts and crafts store, a clothing store. It doesn’t make a difference and you’re selling your sculptures. Then you’re like, “Okay. This thing is good. I’m selling these things. People like it. Let me open up my own shop here. I can … I’ve been selling one a week at this store. If I do one a week at my other shop.” You know?
Elizabeth: That’s a great idea. I think you have to be a little risk averse when you’re starting a business.
Gene: Yeah and I’m such a risk averse person. Sometimes I feel like I’m the wrong … I’m always Mr. Accountant saying, “Here’s ten reasons why you don’t want to do this.”
Elizabeth: We’ll be right back with Gene’s Word of Brilliance.
WORD OF BRILLIANCE: Yes
Elizabeth: Okay, we’re back. I said it again. I said okay again.
Gene: Okay folks. We’re back for the Word of Brilliance. Elizabeth, I recently wrote about this Word of Brilliance. It’s one word this time and the word is yes.
Gene: What does that mean? Yes? You would think that yes has good positive connotations but in this case, Elizabeth, it is not a good word at all. There is a scam going around the country that’s affecting thousands of business owners and many individuals as well and I need to make sure you are aware of this scam. It was reported, by the way, in the American Genius website which I think that you should look up to get more details about this scam but it’s called The Yes Scam.
There are … These are telemarketers that call you up and when you answer the phone, they ask you a question that requires you answer yes to the question. For example, “Hello, Margaret Smith and I’m calling. Can you hear me okay right now or do we have a good connection or is this an okay time to talk?” Any question where you as the recipient, the business owner, then says yes as an answer, they record it. What they do is they are then taking that same answer and they are then weaving it in to answer other questions that you were never asked. For example, “Would you like to subscribe to our monthly plan where you get a cantaloupe delivered to your business for only $500 a month?” “Yes.”
If they’re ever questioned, they’ve got the yes answer so it’s a scam that’s going on and it’s affecting a lot of businesses. How do you avoid that scam? Just as a word of warning, if a telemarketer or anybody calls you up and they ask you a question that the first instinct is to answer yes, don’t answer yes.
Elizabeth: Train your employees.
Gene: Come up with another question like maybe or I think I can hear you and train your employees to do the same thing because it is scam that’s affecting quite a lot of people.
Elizabeth: I’m so paranoid about these kinds of scams that I won’t even accept incoming calls. If a business calls me, I’ll say, “I’m going to call you right back.” I look up online what their phone number is to call.
Gene: Right? It’s a great idea. What happens is they a lot of the scam artists prey on small businesses for a few reasons. Number one is business owners are so rushed and hurried and whatever. They’re already taking calls from outside prospects and customers. When your a business owner, you’re not turning down calls. It could be a prospect. Somebody looking for whatever so people take the calls.
Also none of us, we, we’re not very good at supervising our employees. We’re busy. We’re not professional managers like here at The Hartford. We’ve got layers of management. Your employees don’t have the right kind of training, like you mentioned, and they say stupid stuff on the phone and then it gets the business committed to a liability. Watch out for the Yes Scam. That is my brilliant word of the day.
Elizabeth: The Yes Scam. Alright. Thanks, Gene. We’ll talk to you next week.