Beyond the Buzz with David Stanley Marketing and Management Essentials To Grow Your Business

The decades long decline for the U.S. auto industry culminated last year with a government “take over” of two of the three domestic auto companies. The Wall Street Journal recently featured an article on Sergio Marchionne, CEO of Chrysler Group LLC. Since he is also the CEO of Italy’s Fiat SpA, he is technically not an auto industry “outsider,” but he is not a part of the culture that brought Detroit down. I found two key lessons from his observations and actions that can be applied to any business.

Lesson One: Don’t resort to discounting when sales are tough

Many businesses, especially the auto industry, tends to react to a decline in sales or market share by slashing prices. Here are a few insights from the article:

• In Detroit, “there’s almost a fanatical, maniacal interest [market] share.”
• “Unprofitable volume is not volume I want. We have a very good track record for how to destroy an industry – run the [plants] just for the hell of volume, and you’re finished.”
• He was frustrated by the use of hefty rebates and other incentives to maintain sales which is an industry-wide problem.

If discounting is the only thing you can do to try and create sales, you’ve got a very weak value proposition. Ford has created a more compelling car lineup recently and has not resorted to the level of discounting that has been a core part of the auto industry playbook in recent years. To show that this works in other industries as well, consider that Apple has been creating high demand products that aren’t cheap and has not needed discounts to sell them.

Lesson Two: Culture is important.

The culture in Detroit has been insular. Marchionne has tried to shake up Chrysler’s “plodding corporate culture” by ousting several veteran industry executives and flattening the company’s bureaucracy.

Have you ever heard the saying, “you can’t read the label when you’re inside the bottle?” Sometimes a company or  an industry culture gets so insulated in its thinking and practices that it takes a real shakeup to get things moving in the right direction. I don’t know why, but companies have a tendency over time to create bureaucracies, which leads to hierarchies and inefficiencies. This does not create a competitive advantage; it diminishes it.

Ironically (or maybe not), Ford brought in an auto industry outsider as CEO in 2006. They were the only U.S. automaker that didn’t file for bankruptcy protection or accept government bailout funds. Ford has also been gaining market share and profitability. They are building autos that people want.

What are the results of Marchionne’s actions? It’s too early to tell, but Ralph Giles head of the Dodge brand, says that Marchionne “has brought a refreshing energy” to the Chrysler workforce. Mr. Giles also had this to say: “We were starting to look at the product as a commodity, which is disgusting.” He also said that he has “resumes spilling off his desk compared with a year ago when he couldn’t find someone to hire to sketch cars.”

There are a lot challenging variables at play here that will determine whether or not Chrysler succeeds. Regardless, these two lesson we’ve covered today are a good first step, and are lessons that can be applied to every business.

So, how will you apply these two lessons to your business?

Most businesses want loyal customers, few are willing to do what it takes to create them. Some see it as too complicated, but doing the little things can create loyal customers. On a recent business trip to Iowa for a client workshop, two companies did some little things that earned my loyalty and that of my client. Here’s a look at the power of doing little things.

Acknowledgement, Positive Attitude, and Courtesy

I needed a rental car upon arriving in Des Moines. Prices were comparable between the various offerings there. Historically, I’ve rented from Hertz, the #1 car rental company. After having a good experience with Enterprise Rental Car on some local rentals as well has hearing positive comments from others, I decided to go with Enterprise on this trip.

Enterprise Rental Car does an outstanding job of recruiting employees and creating a company culture that resonates with its customers. It really showed on this trip. Hertz had the longer line, but Enterprise was providing the better service. Here are some of the key points in my experience:

• The Enterprise employees consistently acknowledged those in line stating that they would be with us as soon as possible and offering a bottle of water while we waited
• Warm greeting when I got up to the counter with a firm handshake and introduction along with a positive attitude.
• Efficiently processed my transaction with appropriate questions, and clarity when asked for directions. They also didn’t try the hard sell when I declined their insurance coverage.
• Personal walk through of the vehicle with the same positive, courteous attitude that had started with the acknowledgement while standing in line
• Fast, efficient, positive, courteous interaction when I returned the car. They even said “Your Welcome!” when I said “Thank You.”

There are lots of car rental companies out there. The Enterprise employees made my experience very positive. I’ll be booking with them again on my next trip.

Do The Unexpected

We held the workshop at the Hilton Garden Inn located in Ames, Iowa. The marketing director made all the arrangements and was the contact person for our meeting. Everyone on the hotel’s staff was professional, courteous, and very responsive. They checked with my client frequently during the meeting to make sure we had everything we needed and that the facilities and food were what we expected.

However, it was an unexpected service that won my client over. Apparently in Iowa, Pepsi products are more popular than Coke products so Coke products aren’t as plentiful and can be in shorter supply. My client’s marketing director likes Diet Coke. They had some the day before. At breakfast on the second meeting day, the marketing director went to get a Diet Coke from our meeting room. No Diet Cokes.

When one of the hotel employees found out, she went up to a vending machine on the second floor and bought the marketing director two Diet Cokes. He was thrilled and appreciative. It didn’t stop there. She then had another employee go to the store and buy more for the meeting room. That simple, unexpected action was the icing on the cake of the whole experience. My client will be booking more events at this hotel.

It’s Not Complicated

The actions of the Enterprise and Hilton Garden Inn weren’t complicated. Simple courtesies that are lost today made all the difference in creating customer loyalty.

Does your company have a culture of doing the little things? If not, why?

Words mean something.

Words matter.

What we say has important outcomes.

The curmudgeon in me may be coming out here, but I’m seeing a sad trend in human interaction: The Not a Problem Syndrome or NAPS. It afflicts the more youthful members our society although it is creeping into the more senior members as well.

What is the Not a Problem Syndrome or NAPS? It’s the default response between two people where when one person says “thank you” the other responds with “not a problem” or “no problem.”

The beef I have with this issue comes when a representative of a business says this to a customer. I was raised to be polite. I’ll often say “thank you” to an individual from whom I’ve purchased a product or service. Nine times out of ten these days I get the NAPS response from them.

I’m the customer—of course it’s not a problem!

“Not a problem” is an appropriate response if I’ve asked someone to do something for me in a non-business/customer setting where it does require something from him or her. If I’m purchasing a product or service from a business, it’s not an inconvenience. Providing that product or service is the reason the business exits.

Create a Culture That Prohibits NAPS

Enterprise Rent-A-Car and Chick-Fil-A are examples of two companies that have created a culture that serve customers the right way. They both employ young people, but I haven’t heard any of their employees respond to a customer with NAPS.

I rented a car from Enterprise last week at the Des Moines, Iowa airport. The employees were warm, polite, and enthusiastic. They acted like they genuinely appreciated my business. When I habitually said thank you, they gave me a hearty “You’re Welcome.”

Chick-Fil-A has created a culture for customer-employee interaction that far exceeds their competition in the fast-food industry. You’re considered a guest and are treated like one. If you say “thank you” to a Chick-Fil-A employee the response you get is “It’s my pleasure!” Wow!

Do you want to stand out from your competition? Take a huge step in that direction by creating a culture that eliminates NAPS and focuses on enthusiastic, positive words that make customers feel great. Words matter. Words mean something. What words represent your business?