I know very little about how hospitals work and how the medical profession in general works and that’s not what I’m going to focus on here. What I’m interested in is how the Mayo Clinc went against what might seem like a logical system and instead decided to use something that focused on overall customer satisfaction instead of profits.

This isn’t unheard of. CarMax puts their sales representatives on salaries to ensure the advice and guidance they give is more motivated by eventual customer satisfaction than it is by short-term commission gains.

Your compensation system should be based on the goals of the customer, not the goals of the employee. When the two can align, great, but when they don’t, it’s a problem. For example:

• Most car dealers are paid on percentage commissions. This encourages the car dealer to sell the customer a more expensive car (bad).
• Real estate agents are paid on percentage commissions. This encourages the agent to show the client more expensive houses (bad).
• Plaintiff attorneys get a percentage of the settlement or award. This encourages the attorney to get the most money for him/herself and the client (good).
• Some sales people are paid based on a flat commission. This encourages them to make a sale, but not a specific sale (better than bad).

And so on. The Mayo Clinic deciding to pay its doctor on a flat salary that wasn’t dependent on the number (or expense) of procedures and focused on patient well being is something they do to ensure long-term patient and satisfaction and well being. If you don’t rip your customers off and instead focus on getting them solutions that actually make sense for them, you’ll make more in the long-term.

Photo credit to Nephron via Wikimedia.

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Basically, get several references from the potential employee and then call each of them around lunch time or after hours. The point is to call at a time when the reference will not be in the office (not a typo). You then leave a message saying something along the lines of “Bob Smith is in the process of interviewing to be an ABC Engineer here at XYZ Corp and listed you as a reference. Please call me back if you feel he was outstanding.”

While not everyone will get the message or call you back, the idea is that it will all be relative depending on the strength of the candidate. If you call five references for candidate A and get four calls back, that’s a good sign. If you call five references for candidate B and get no calls back, that isn’t such a great sign.

People will usually do whatever they can to give positive references if they’re well deserved. People legitimately leave jobs on positive terms and when it’s handled well, bosses (or whoever was named as a reference) often have nice things to say.

However, if a candidate is less than outstanding, a lot people are hesitant to say that much. The threat of lawsuits is always there and reference checks for employees who weren’t great tend to present a lot of potential problems for very few benefits. This method lets those people say something without actually saying anything (or going out of their way) and still lets the good people get great reviews.

photo credit: mangpages

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The situation I kept coming back to and thinking of was the classic example of a customer asking a waiter or waitress what they would recommend on a menu, what they think of a particular item on a menu, or something similar. This is probably the most common situation in which an employee of a company is asked to provide their feedback about something offered by the company.

I usually hear pretty good things coming back from the staff in response to these types of questions. If they don’t like the dish, the reason is usually something general like “I don’t like seafood” or “I don’t really eat meat.” I’ve never heard a waiter answer the question with “it’s terrible”, “I wouldn’t feed it to my dog”, or “it makes a great door stop.”

My general rule is to be as honest as possible. If you don’t like something personally, you can say that, but word it carefully. For example:

Customer: Do you like the XYZ salad?
Waiter: It’s not really the type of salad I’d order, but it is a popular item and I’ve never heard a customer complain about it.

That’s a common and effective response. Chances are, customers don’t complain about any particular dish too consistently (one would hope such dishes would be removed from the menu or fixed), so recommendations like that are typically pretty “safe.”

Another generally safe and effective approach is to suggest something else at the same time. For example:

Customer: What do you think of the XYZ salad?
Waiter: It’s quite good, but to be honest, the ABC salad is our popular salad and customers are always saying how great it is.

The point is to be honest while being careful. Customers want your opinion, but they also don’t want to get too discouraged or begin thinking they made a wrong choice. When providing your recommendations, advice, and opinions, let them know what you think and if what they’re thinking isn’t exactly what you think is best, gently tell them why and provide appropriate suggestions.

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I just stared. I couldn’t believe an employee of a major company that depended on a large amount of small value transactions to make any money was telling me the movie I was about to rent was terrible. She hadn’t sugarcoated her critique at all, either. She just told me quite plainly that the movie was terrible.

The woman obviously noticed my stare and then recovered slightly and said, “Is there anything else you want to rent?” I continued to stare, mainly because she had already taken the security tag off and scanned the movie. The checkout experience was essentially over and all I could think about was how terrible this woman’s customer service skills were and how bad the movie I was about to rent was going to be.

Needless to say, this isn’t the best way to upsell your customers or to encourage them to continue using your company. If the employee really thought the movie I was going to rent was that bad, she could have said a few other things:

• “To be honest with you, I saw this movie and didn’t really like it. I did see [Random Movie], though, and really liked it. Do you want me to grab that one for you?”
• “I’ve heard customers say they didn’t really enjoy this movie. [Random Movie] has been popular this week. I’m happy to get that for you instead if you’d prefer.”
• “Have you seen this before?” (customer says no) “Okay. Because I saw it and it wasn’t exactly my favorite. Some of our more popular releases are along that wall if you want to maybe consider those instead.”

The alternative is to of course say nothing and let the customer rent his or her movie. However, if you are going to say something (or encourage your employees to provide their honest feedback without being asked), then have alternatives in mind. And if and when you’re going to suggest an alternative, do so quickly. The 10 or 15 second pause could easily result in a lost sale at worst and an awkward service experience at best.

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I’m also glad to see that my friend Tom Vander Well from QAQNA made the list, along with eight other interesting sites and blogs.

In other news, I upgraded Service Untitled to the latest version of WordPress (2.8) earlier today. Everything appears to be working fine, but if you notice any problems or oddities, please send me a quick email and let me know.

If you’re running WordPress and haven’t upgraded yet, please take the 10 seconds required to do so and get your blog upgraded. There are some nice improvements in 2.8 (new widget interface, speed improvements, one click themes, etc.) that certainly make it a worthy upgrade.

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Apparently, it was. Even though I had called the night before to check that a two hour extension wouldn’t be a big deal, I called the front desk in the morning to confirm it again and was told there would be a $90 fee for the extra two hours.  I told the person at the front desk that I was told an extra two hours wouldn’t be a problem the night before, but that didn’t help — if I wanted to stay an extra two hours, it’d be an extra $90.

The “lesson” of this story is that as a company, you should try to accomodate special requests whenever possible.

Most hotels make it a pretty standard practice to let guests stay an extra hour or two without charging them. The hotel I stayed at would allow a late checkout for people with frequent traveler status at the hotel, but not as a courtesy to regular guests who asked. In reality, though, the real costs of letting a guest stay an extra hour or two without penalty are probably small when compared to the increased positive feelings the hotel would gain by letting a few customers stay that extra time if they make a special request for it.

Other companies do this as a fairly standard practice. Some online retailers will upgrade customers to overnight or two day shipping as a courtesy. Airlines usually let customers with slightly overweight bags check their bags without charging them the fee. Rental car companies usually won’t charge customers if they are a half gallon short of a full tank when they return their car. There are countless examples of thinking about (and favoring) the customer loyalty value over the real financial gain associated from the fee or the addon.

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An entrepreneur I met with recently  told me that his company regularly calls and emails its competitors to see how good they are. They measure objective things like how long it takes to get a human on the phone, how long it takes to get a product, how long it takes to get an email response, etc. These are all metrics the company tracks internally and can easily compare to how they’re doing.

They will also order products from the competitor to see what the experience is like — packaging, updates during the shipping process, product quality, etc. The company does this so they can see how they’re doing relative to the rest of their industry. If someone else is doing something better or cooler, the company can adapt accordingly and make changes. 

A lot of companies are in fiercely competitive industries. Some will buy a competitor’s product or service to try it out and see how it relates, but very few actually do that on a somewhat regular basis. They’ll do it once and forget about it. This results in a short term benefit, but no real long term benefit.

If your company isn’t doing this already, you should start. In the long run, it’ll save a lot of time and aggravation. Guessing how your competitors are doing is not nearly as valuable as having the actual data.

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Sorry for the lack of updates!

I’ve been getting ready for WordCamp San Francisco (taking place Saturday, May 30 at the Mission Bay Conference Center at  UCSF). I’m presenting at the conference and also helping to organize some of it.

I’m really looking forward to the event – they have an excellent lineup of speakers (excluding me), a great venue, and a lot of interesting things to learn.

If you’re going to WordCamp SF and see me there, please be sure to say hello!

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