I’m a massive believer in the power of personal service. When a staff member interacts with a customer, that’s where the action is. When we’re relating as people, it’s a chance for me to really understand your needs as a customer and to help you on a person-to-person basis. In order to deliver the best personal service, I also need to understand how you like to be served. This is where EQ comes in — emotional intelligence.
The best customer service professionals have great people skills; they can quickly understand what kind of a person someone is, and how to relate to them.
Here are some of the character types you might encounter:
- The No-Nonsense Customer. This person knows exactly what they want and they simply want you to help them get it. Ascertain their needs and deliver, quickly and efficiently.
- The Browser. This person has a vague idea what they want, but they’re interested in finding out what you offer. They want advice and are keen to discuss their options. Understand what they’re looking for and then advise.
- The People Person. This customer simply has to socialise with everyone they meet. They will smile, greet, enquire after someone’s health and generally have a pleasant chat before getting around to discussing what kind of help they require. Here there’s no rush. Just chill and chat, until your customer remembers, “Oh, ja! Here’s what you can help me with!”
- The Shrinking Violet. Someone with almost no social skills, and incredibly shy to boot. This customer would rather not have to deal with people, but out of necessity they are forced to. You might have to draw them out a little, but just put them at ease and make the process as painless as possible for them.
Related: Does Your Customer Service Care?
Recognising your customer’s personality type and needs is just the beginning though. You now need to speak to them in their language.
Phatic language is the linguistic term for words used to facilitate the flow of conversation. In themselves they are quite meaningless. They’re just social lubrication to help an interaction along.
Phatic language is useful, but it is not real conversation. That happens around it. If you’re going to make a real, person-to-person connection with your customer, you need to get past the phatic conversation as quickly as possible. You need to really connect.
When we connect, we form a human bond that is deeper than a brief encounter, or even a business transaction. So use language that encourages this. Don’t just say, “Need any help?” That’s phatic language. The answer will be a reflexive, “No, thanks, just browsing.” And you haven’t made any connection at all.
Try to ask questions that reveal the customer’s real needs and explain more about why they find themselves dealing with you. “How can I help you?” is a start. But why not think of an opening question more closely related to your business. Let’s say you run the Party City party supplies store. How about opening the conversation with, “What kind of party are we having?” That will propel you right into your customer’s world. They’ll explain how they’re throwing a farewell party for their boss, who’s retiring and they were thinking perhaps something with a New Orleans theme, as he’s a big fan of jazz music.
Pretty soon, you’ll be discussing what kind of guy he is, how many guests there’ll be and throwing around ideas about what kind of an event they’re going to be having. You’ll be connecting.
Get the big picture and sell more
This speaks directly to another golden rule linking customer service to sales: If you get the big picture, you’ll be able to sell more.
Let’s say you run a PostNet branch. It’s a media business. A client comes in asking about the cost of couriering a document to Cape Town from Centurion. You could look up the rate in your book and say ‘98 bucks for counter-to-counter.’ Then go back to your smartphone.
But you won’t do that, because you’re delivering exceptional service. You’re going to ask, “Do you mind if I ask what you need our courier services for?”
The young lady might say that she’s applying for a design job, so she wants to courier her portfolio to Cape Town for a job application. Now that you know her requirements, you can better serve her needs.
You might be able to help her print out her design portfolio on a high-quality printer, bind the pages professionally into an attractive book, and then courier the package safely to her prospective employer in
This is a type of cross-selling — you are selling the customer extra services. But you’re doing it to help realise her goals. You’re delivering exceptional service, by supplying exactly what she needs.
You can also do a bit of up-selling (selling add-ons or more valuable services) by encouraging her to use overnight door-to-door courier service. That way, her documents will be at the front desk of her next employer by the time they get into work.
You’ll have sold more, but you’ve also added value to your customer, and delivered a superior service.
Own the project
We’re trying to deliver exceptional customer service, to satisfy the customer’s needs. The best way to do that is to personally take ownership of a project.
When we make contact with a customer, we should methodically work through their project, becoming their representative in the process of fulfilling their requirements.
That would work something like this:
- Make a connection. Smile, greet them, enquire after their health. Welcome them to your company.
- If the customer is uncertain how best to meet their own needs, give them the benefit of your knowledge. Recommend a dish, explain your product offering, describe how the system works.
- Agree on a plan of attack. Once the customer knows their options and has chosen one on your advice, agree on what you’re going to do.
- Establish their needs. What is the project they are engaged in?
- That means you ensure that the job is done. Even if you hand them over to another department, you still monitor the project and ensure it is carried out to the best of your company’s ability. This could mean delivering a hi-fi, taking out an insurance policy or financing a C-class Mercedes.
- Follow up, follow through. Check that the customer is happy. Liaise with colleagues on the project. Take up and personally resolve any problems. Check whether things could have been done better.
These are all ways of taking ownership of a customer’s project, whether it’s finding a dress for their three-year-old’s birthday party, a 32G SD card or working out how many Vitality points they have.
Dull Service in Dullstroom
Just recently I gave a talk to a group of franchisees at a venue in Dullstroom. I took my wife Ann along because we wanted to stay an extra night. This was the procedure we encountered at the hotel. It was anything but effortless.
I talk about anticipating your customers’ needs. This establishment showed none of that anticipation. It was like they wanted to make it as hard as possible for a guest to extend their stay.
I phoned the hotel but they couldn’t take the booking directly for the extra night as ‘it had to go through head office’.
So I phoned head office and they said that it’s fine, they can accommodate us but only if I could tell them my room number. I didn’t have my room number as I’d not yet checked in. I asked if there was not a way that they could get hold of reception at the hotel and find out the room number for us. No, the lady at head office told me I had to phone the hotel back (this would have been the third call) and then phone her back at head office (fourth call) mentioning the room number and then she could confirm the booking.
Can you believe it? Again, all but effortless service and quite frankly, Ann and I decided not to stay the extra night because if that was our first contact, imagine the rest.
Suffice to say, the rest was not up to standard. When we arrived at reception, there was no one there, not even a bell to ring for service. I had to walk around the hotel to try and find someone. Somebody eventually came along to help, but the damage had been done.
We went from a potentially loyal customer who would recommend this hotel to our friends and colleagues, to unsatisfied customers who would do the exact opposite.
Types Of Funding Available For Franchisees
If you’re interested in investing in a franchise, there are a number of funding routes available to you.
In South Africa, a franchise is considered a separate, specialised field of business and from a financing perspective is viewed differently to an existing business. It’s typically easier to get funding for a franchise as franchises have a proven product and they vet potential franchisees and offer support to new business owners. This support can include extensive training on running the franchise, branding and marketing, operational policies and procedures and a highly-tuned supplier network.
The reputation of the franchise will, to a large extent, dictate which finance options you choose and how easy it will be to raise the required funds.
It’s important to understand the cost of purchasing the business and the expected operating costs to work out how much finance you’ll need until the business starts to generate profits. Be clear about the upfront costs, including access to the brand, the market structure, start-up support and the set-up fee, which usually includes construction, equipment, stock and other necessary resources.
Consider the operating costs, which must include management service fees and franchise marketing and advertising levies. The franchisor will advise you on the time it should take for the franchise to start generating profits. Upfront costs plus operating costs are the total amount of finance required to purchase, set up and run the franchise.
What’s available for prospective franchisees?
Many of the large franchisors have their own funding mechanisms. These can range from their own established finance arm to funding assistance through partnerships with external lenders. Franchisors seldom fund 100% of the purchase costs; the amount of funding varies according to the size and reputation of the franchise and usually ranges from 25% to 75% of the costs.
Once a franchisor approves you as a franchisee, your chances of being approved for funding are significantly stronger. Some franchisors go a step further and suggest a business partnership with another potential franchisee who has good financial resources but less experience. Pairing experience with finance can be a useful option, but needs to be explored properly as it is a long-term partnership that must work for both parties.
Tandem Funding and Specialised Franchise Funders
South Africa’s B-BBEE legislation has led to a new option for franchise funding. It’s a particularly innovative way of quickly upskilling inexperienced potential franchisees. The franchisor funds the new franchise and retains ownership of the majority of shares in the business.
The franchisee initially purchases a small number of shares and is then mentored by the franchisor to set up and run the franchise. Profits are used to buy more shares until the franchisee has purchased all the franchise’s shares.
Specialist franchise funders are also a useful option. They typically consider a wider variety of franchises than banks and have in-depth knowledge of the industry. However, like other funders, their primary concern is to be sure that the loan will be repaid within the required period.
Franchise Funding from Banks
All of the large banks have specialised franchise funding departments. Their approval rate for funding franchises is generally higher than for independent businesses.
Banks will expect you to provide a sizable contribution toward the purchase of the franchise and funding is dependent on proof that the business will be able to repay the loan.
Other factors they consider are the location of the business and its proximity to competitors and catchment markets, your level of business experience, your credit record and the amount and type of support offered by the franchisor. The higher the level of support, the less the risk to the funder of the business under-performing.
If the franchisor is willing to enter into a joint venture with you to partially fund the purchase, the bank will consider this positively as it means the franchisor has a vested interest in helping you to succeed.
Government Franchise Funding
All of the government funding agencies offer franchise funding primarily to encourage black entrepreneurs to enter into the franchise business. For example, the National Empowerment Fund considers funding based on a minimum of 50,1% black shareholding, provided that the black shareholders are actively involved in managing the business.
They prefer to fund well-established franchises, fund up to R10 million and expect to exit within seven years, so you’ll need detailed projections to show that the loan can be repaid within that period. Ithala Bank considers funding for KZN-based approved franchisees who do not have collateral.
What funders expect from you
Lenders expect you to provide detailed information that will enable them to assess the risks of lending to the franchise. This means they require a detailed business plan, comprehensive and well- substantiated financial projections and full details of the franchise, its agreement terms and the levels of support they will provide. They will also need details of start-up costs; for example, construction, set-up costs, equipment and other resources required to establish the franchise.
Franchise lenders expect you to have concluded discussions with the franchisor and want to know that you have been approved. This pre-approval means that there is less risk to them. You’ll also be expected to provide feasibility studies from the franchisor.
The purchase of a franchise requires an injection of your own cash and if you are borrowing money, you’ll probably need to provide collateral. You’ll need a statement of personal assets and liabilities for each of the directors, a good credit record and detailed CVs of the owners to show the required business experience.
The more well-known the franchise, the higher the price, so do your homework before applying for finance. Understand the full cost of starting and running the business to make sure you aren’t in for future surprises. In particular, work out your current liquidity status.
Keep a small contingency fund available for unexpected expenses, so don’t invest all available capital in the venture.
Shop around. Compare finance institutions’ offerings to make sure you get the best deal. In the case of less expensive franchises, consider working with a couple of lenders; for example, an asset funder to fund equipment needs and a franchise funder for the start-up and working capital costs.
Factors To Consider Before Signing Up As A Franchisee
Franchising is a brilliant way to get into business with not many entrepreneurial skills as it comes with a roadmap to follow for success.
You’ve been considering entrepreneurship for a while, and now that you’ve finally raised some money and been approved for a loan, you’re ready to quit your 9-5 job to run your own business. You may even already have your eye on a particular franchise, but while franchising is considered an easier and more low risk way to get into business, are you suited to being a franchisee?
“The question is not ‘is franchising right for you’, but rather, are you right for franchising? Because if you don’t have the right attitude and skill set, it can be a very expensive mistake,” says small business expert and author Steve Strauss.
Franchising may seem like an easy way into entrepreneurship, but along with an established name and proven systems, come rules, regulations and little room for creativity. If you’re not ready to become a franchisee, but want to go into business for yourself, you may find yourself struggling to operate within the system’s blueprint.
Ask yourself these three questions before proceeding with the process of franchising:
1. Will you be able to follow the directions of the franchisor?
You’re buying into an existing and proven concept so it’s safe to assume that the franchisor knows best, and so you have to be open to learning and following guidelines for business success. If, for example, you have experience in advertising and think you have an improved technique of marketing the franchise, you may want to change the advertising material provided by the franchisor – don’t.
“Being a franchisee means following the directions of the franchisor, even when you think you know a better way,” advise experts from strategic and tactical advisory firm MSA Worldwide.
“In addition to initial training, you need to be prepared to accept coaching and advice from the franchisor on how you operate or market your location.”
2. Do you have the need to experiment?
Lou Groen may have had success in launching a new menu item that McDonald’s approved of in 1962, but not all franchisees are that lucky. Stick to the plan and limit deviations to the menu or anything that involves the customer experience.
If the franchisor’s concept doesn’t involve deliveries, offering them to your customers may cause issues for others within the franchise system. “If it’s not part of the franchisor’s concept, you’re deviating from the concept and therefore, no longer running your store as a franchise,” according to MSA. Franchising arguably limits innovation opportunities, so if you’re prone to implementing creative ideas and evolving business offerings based on said ideas, rather start your own independent business.
3. Are you a team player?
These first two questions you address should already lead to the realisation that everything you do affects everyone in the franchise chain. One bad experience at your establishment and suddenly, all the stores are affected by bad press or unsavoury social media attention.
“Other franchisees are relying upon you to offer to the consumer a consistent level of service, product quality, and brand message. You are going to have to work with others in the system in making decisions,” advise experts.
Remember that as part of a chain of other business owners, you may have to accept that majority rules when it comes to decisions where franchises do have a say.
3 Ways You Can Innovate And Improve As A Franchisee
Although your role as a franchisee isn’t really to innovate, there’s room for creativity if you go about it the right way.
When you signed on the dotted line after reading and agreeing with the franchise agreement, you knew that you were buying into a proven system where everything has already been thought out for you, and all you have to do is follow the formula for success.
But you’re a franchisee longing to put your own imprint on your business, and it may be frustrating to feel boxed in by a formula, while you’re bursting with new ideas.
“Franchising, by its nature, discourages innovation on the part of franchisees, who are required by their franchisors to follow very specific policies and procedures on exactly what they will sell, how they will make or deliver it,” notes Randy Myers, contributing editor for CFO and Corporate Board Member magazines.
This doesn’t mean your ideas will never see the light of day though. But before you approach your franchisor with your brilliant insight, consider the following steps that may well lead you down an innovative path:
1. Get the basics right first
Franchisors know that customers like consistency as it makes them comfortable and trust every location of their franchise they choose to visit. But, even the strictest franchisors get hungry for new ideas. It’s the timing that’s vital for your idea to even be considered.
“Most good systems don’t want new franchisees to even think about innovations until they learn the existing system inside out and prove that they can execute it like a star,” said Jeff Elgin, CEO of FranChoice, a network of franchise referral consultants. “At that point, they have become successful, their base is secure, and they have earned the right to consider innovations.”
It’s wise to ensure you’ve learned your franchisor’s existing business model before you suggest any improvements.
2. Do your homework
So, you’re doing well and you’re sure your idea will be welcomed as a crucial innovation to the franchise system – but research your proposal, suggests Kim Stevens, VP of Regional Development and Director of Franchise Awarding at Woodhouse Day Spas. “Especially if you’re suggesting something that would impact all franchisees, create a business plan before approaching your franchisor,’ she says.
It’s also good to have another look at the franchisor’s policy for accepting new ideas to ensure you’re prepared for tough questions before you propose your idea.
3. Speak to the right people
Elgin recommends you first identify the person at the franchisor’s head office who’s responsible for receiving new ideas. “Many of the ideas a franchisee comes up with will already have been proposed by another franchisee,” notes Elgin.
To avoid wasting your time, no matter how great you think the idea is, present it as early as possible before spending anything developing the idea.
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