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No happy customers = no business.

Expectations management -- the process of setting up a business to ensure the company meets and exceeds its customers' expectations -- is the single determining factor of whether or not the customer leaves the business happy. In every transaction, a customer compares their perception of how the company performed in relation to their expectations. If the gap is large, the reaction will be stronger (either positive or negative). If the company delivers exactly what they customer expected, it may not even enter the customer's mind, but the comparison (performance to expectations) occurs nonetheless.

"That's just customer service stuff, Curt," a client confides with me. "I have bigger fish to fry; we are expanding to five new locations, and I have this major financing project going on. On top of that, HR is revamping our whole approach to employee training. This customer service stuff is just not commanding my immediate attention."

Oh, but it will. Without happy customers - and the revenues they bring to the company - the company's investment in people, locations, capital, and other investments become irrelevant. Profitable customer revenues provide the return on the company's investment in those other things, and we're back to talking about those happy customers.

To tackle this strategically, the HYPERGROW system looks at a five-step process. Completing this approach sets the company up like "Las Vegas," with the odds stacked in the favor of the house (you). Being haphazard compares to running your business like the gambler, leaving everything to chance.

So the steps….

Step 1: Understand base expectations. Customers come to your business with a set of expectations of how you will perform. They bring these expectations to the transaction and you have had very little, if anything, to do with creating them. If you look at the detail level (and you should), you will find that customers have dozens and maybe even hundreds of little expectations of how your business should perform. And they judge you on each one.

Step 2: Modify expectations. Sometimes your company needs to lower the base expectations that a customer may bring to the table. They may have unrealistic expectations about what you should be able to deliver. Unchecked, you are set up to fail. In other instances, you may need to raise the expectation level. If the customer has poor expectations of the benefit to working with you, they will not be motivated to take action. Steps 1 and 2 come together to form the promise you make to your customer. And you have to make the RIGHT promise - one that is sufficiently high to make the customer interested, but also sufficiently low so you can deliver. It's a tricky balancing act.

Step 3: The products / service performance. After the customer makes a purchase, they evaluate the product or service you provided and compare the performance to their expectations. They will study things like quality and the results they received. At this step, they evaluate what you sold them - and what they paid. You need to understand how your product or service will be judged and make sure that your product lives up to those expectations.

Step 4: The company experience. The customer also rates the company on what it is like to do business with them. These can include things like atmosphere, the competency and attitude of your staff, ease of the transaction, convenience, promptness, and other "warm and fuzzy" factors. Obviously how the customer judges the company varies from industry to industry. In many instances, a company is judged as much (or more) on these things than on the actual product or service. Steps 3 and 4 combine to form how the customer believes you performed in relation to the promise.

Step 5: Post-purchase reinforcement = How the company behaves AFTER the transaction can also have an impact on how the customer believes the company performed in relation to expectations. Things like a genuine "thank you" or "how can we do better next time?" question communicates to the customer that you truly appreciate them and want to do a good job for them. It tells them that you are a company they want to do business with. Doing a few steps AFTER the transaction is a great marketing tool, and one that many companies skip.

Setting up your company to win with the customer is an intelligent approach. You can start to break down the process of how your company is evaluated if you consider this five step process. Dig into the details of each step, and orchestrate your customers' interaction with the company so that you are programmed to win!

Happy customers = happy business owner!

Curt Clinkinbeard is a business advisor and author of HYPERGROW YOUR BUSINESS. Curt conducts workshops throughout country about the HYPERGROW program as a nationally recognized trainer of nearly 500 business consultants within the SBA's SBDC network. The HYPERGROW! book documents a complete system for business growth. The book dedicates a chapter to each of the 9 natural laws that govern the growth of any business, and highlights key systems to put that law to work in your favor. He can be reached at curt@hypergrow.com

 

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