This is the third in a series devoted to building business on value and redesigning your business to maximize customer perceived value.

Measuring customer perceived value is a key marketing process. It replaces the idea that pricing should be based on cost of production plus profit margin. This provides great flexibility to those providing fixed products and services. Prudent small business owners can – if they want to take the risk – shape and reshape their product to fit customer needs in motion. For example, bakers or florists can flavor or arrange product in multiple variations.

Value is what makes customer’s move their business, so, keeping customers happy takes on a new importance. Where customer satisfaction can be clearly measured, small business owners need to survey their customers’ perception regularly – with the intent to adjust service and product to those measured needs. Touching base with customers with some regularity respects and flatters them. However, unless the surveys lead to change or improvement, the customer feels ignored and disrespected.

Some small businesses mistake a phone call or a “how ya doin’” as a survey. The survey is better focused on specific elements of the perceived value.

• Ask questions that address functions of your product/service. Determine if the satisfaction has to do with color, size, assembly, or structural utility.
• Phrase questions that confirm you competitive edge. Determine if the product delivers on the edge you promised. Reconfirm that your product is larger than. Lighter than, more durable than the competitor
• Check on the customer’s emotional response. There is a benefit in reassuring the customer that it is good to feel “good” about owning the product. We don’t ask enough people, “Tell me, how do you feel about this?”
• Let the survey remind the customer indirectly that your service met his dreams. Help them see how you helped them to stand out, to have some bragging rights.
• Make sure the cost is tied to the value. An assembled product may be a “bargain” to someone who doesn’t have the time or talent to put things together. Convenience, time, delivery, payment terms, and checkout process: all these are values in different ways to different customers. So, let the survey be the tool where you remind the customer that it was the convenience (or whatever) that made the difference.)

One approach is to survey the customer once shortly after the sale. Another is to survey the customer repeatedly with brief questionnaires that address each of the value factors listed here.

I know this takes time and attention, but it also gives structure to customer follow-up you should be doing in the first place. For example, you should be talking to a customer once a month. It won’t be hard to use one or more of these factors as the purpose of that call.

This is the third in a series devoted to building business on value and redesigning your business to maximize customer perceived value.

Value is not just in the eye of the beholder. It has a feel to it. Customers know what value feels like as they run it through their fingers. If you, the small business owner, don’t feel it the same way, you are going to lose customers.

Suppose there are burger joints on each corner at a traffic light near home. Time in and time out, you always go to the same one because of taste, ambiance, convenience, discount coupons, a playscape or senior bargains. What would make you change your buying habits? A restaurant-borne disease, advertising, change in the drive-in access, an upgrade in the store design? A customer changes a purchasing habit because of customer perceived value.

Why don’t more small businesses market this way? Well, too many businesses cannot think themselves outside traditional costing methods, i.e. adding the desired profit percentage to the cost of doing business. Nothing in that concept, math, or need interests your customer, and the only value in it is the value to you.

Moreover, some types of business find it hard to turn this ship around. Corporate complicity and trade regulation freeze Real Estate and Insurance prices. Professional standards and insurance legislation drive the price of Dental and Medical services. Lawyers, accountants, and consultants have their sacred billable hours.

For example, ask yourself why people like the Chinese Restaurant’s menu. The value lies in being able to order one from Column A and two from Column B – at will. Or, speaking of restaurants, when you order a Philly steak sandwich in a Philadelphia steak joint, they will ask if you want your sandwich “wit” or “witout.” (Translation: do you want it with or without cheese and onions?) The trick is you pay the same price “wit” or “witout.” Suppose the joint across the street charges $.50 less “witout,” would you switch to the other place? And, though it may date me, I remember Jack Nicholson, in Five Easy Pieces, trying to order toast in a diner only to be told that he had to order a chicken sandwich to get the bread. He couldn’t see customer value in that.

Admittedly, this may be simpler than customizing obstetric services or tax advice, but these business climates would benefit from offering more flexibility – and marketing it! Admitting that some industry standardization brings stability to real estate and insurance marketing, there are known price variances that could be extended to a larger customer public. If, for example, you bundle your services at one price, consider unbundling them to suit the customer’s needs. If you offer one item from Column A with Item 2 and 3 from Column B, nothing stops you from allowing the customer to move the pieces around. Or, if you do not bundle services, consider price reductions to those who want a bundle.

If you are not in one of these hunters’ blinds that makes it hard to see the customers’ future, take action now to realign your services and products so you can offer a “Chinese menu,” allowing the customer can see your flexibility and responsiveness. If you are stuck in the blind, do what you can within the wiggle room you are allowed. And, work from the inside to shift the thinking of your trade or professional group.

After all, you are a small business operator, and flexibility and agility are your strength. This is not a movement you want to fall behind.

Woman-owned businesses are fast becoming their own industry sector. 2010 Census figures rollout, reports from Forbes, National Association of Woman Business Owners (NAWBO), the Small Business Administration’s Office of Woman Owned Business, and others are emphatic about their expectations.  

Allow me to summarize the statistics.  Currently, woman-owned businesses account for less than 18% of the U.S. employment force.  By 2018, women owned businesses will be the source of one-third of the 15+ million jobs the Department of Labor expects to book. The very same numbers tell us that the new workplace will be more diversified, inclusive, and horizontally structured. 

Why the increase in numbers? For one thing, more college-educated women are making the move towards business ownership. For another, women have traditionally dominated the industry sectors that expect growth – healthcare, service industries, and the like. And finally, woman-owned businesses are less likely to depend on restrictive bank financing.  

How are female business owners different?

 Workplace.  While it may be stereotypically dismissive to label women as nurturing, evidence shows that women build business by creating a positive working environment for workers and customers.  They seek to:

• Value life/work balance and share it with others.
• Take pleasure to creating opportunities.
• Provide better pay and benefits to employees.
• Help employees feel better about themselves.

Customers.  Additionally, because they often have more to risk financially and emotionally than their male counterparts, women owners tend to:

• Focus on customers more directly and personally.
• Keep and cultivate appreciative customers.
• More strongly differentiate their business from the competitor.
• Stay ahead of what their rivals are doing.

Networking.  For women, networking is a more shared experience and less exploitive. They are more likely to co-exist creatively than to divide and conquer. Consequently, they are more likely to:

• Seek and take advice from others, including their consultants and advisor team.
• Listen to their employees on a whole range of issues from process to customer satisfaction.

Planning.  Women business owners, behaviorally speaking, are apt to have a broader and longer-term vision. They write thorough business plans and work hard to stick to the plan. They think about retirement more and toys and trophies less.

Support.  Such women are also quick to seek assistance from an increasingly large number of agencies, groups, and sites that study and respond to their increasingly articulate needs. The SBA Women’s Advocacy, National Association of Women Business Owners, and Count-Me-In are just a few of the hugely supportive info centers.

We make big mistakes when we confuse customer service with friendliness, goodwill, and personal warmth. “Cheerful” and “upbeat” are personality traits – not skills. Until you figure this out, you will go through a lot of customer service turnover – and risk loss of customers.

When thinking about what you need in customer service help, write and re-write the job description. There are templates on line that you can easily adapt to your business type. Take the opportunity – before you frame your advertisement – to differentiate between experience, skills, and aptitudes.

For example, identify the length and relevance of the experience you want. Most small businesses are not in a position to train people on the job, so plan on paying the wage that two years’ experience would expect. Customer service skills are not easily universally transferable. A customer rep experienced in tech responses is not suitable for a realtor’s office or a construction outfit. So, narrow your search.

Skills are specific to your business and include demonstrated ability with your business office machines and software. Whether it is handling your phones, cash register, fax machines, databases, or whatever, you need a new hire to hit the ground running. Prepare a test for outcomes you want to see.

But, customer service attitude is the bigger challenge. You need to test and interview for the customer service “mindset” that is going to profit you. Again, charming, spunky, charismatic, etc. are nice qualities to have in your staff. Still, they do not guarantee a good fit, comfort in the work, or productive customer retention for you. You need interview questions that assure the applicant’s self-possession, independence, accountability, patience, and emotional balance.

When you schedule the interview, let them know you will test their experience, and, following the testing, you will ask about their knowledge of your products and services. A heads-up candidate will do the homework.

Here’s the key questions you’ll want to ask: 

• What do you enjoy about working in customer service? 
• What aspect of customer service are you particularly strong at?
• When I talk to your previous employer, will s/he confirm that?
• How do you start communication with a client?
• What steps do you take to identify the customer’s problem and level of displeasure?
• What have you done at your present/last company to increase revenues, reduce costs, or save time?
• Tell me about a time that you helped resolve a particularly difficult customer issue. 
• Talk about a time when you were unable to help the customer with their problem – what was the issue and how did you handle the situation? 
• What have you done to be a better customer service representative?  
• What would you do if your replacement did not appear for work?
• Some customers are rude – in addition to being dissatisfied. How do you manage customer rudeness?

In each of these questions, look for responses that report a behavioral process. If the candidate can report a behavior, a process from beginning to end, then, s/he has studied the matter. A candidate with a process manages a customer situation instead of merely responding. You can rely on thought and follow-through instead of unthinking emotional stress. And, finally, you have someone used to being measured. This is a win-win customer service rep.

Family businesses often happen by accident. The entrepreneur drives the start-up while the spouse and family chip in. Underpaid and overworked, these people are often willing to  sacrifice to make the dream come true.

Serendipity may bring success to a family business; however, the heads-up business owner builds practical solutions for potential family friction into the business plan.

• Identify the members of the family with potential to perform successfully within a structure. “Family” can mean a married couple, parents and children, or siblings and their spouses. In short, there are family members, and, then, there are family business members. Share that picture with the family.
• Separate family issues from business issues. Share an understanding at the very start about what you bring to the worksite and what stays at home. It may take some practice, but everyone needs to know where to discuss family baggage. Everyone needs to know what the process is to solve issues.
• Budget vacation, holiday, and personal time with the family. Keep business out of those moments. However, remember that children are competitive; the best families suffer some dysfunction. So, clarify an understanding for the handling of dependency issues, hostile behavior, and divisiveness.
• Pay fair competitive wages. If early revenues do not permit this, clarify the value of their sweat equity. Create a compensation plan that will reward their effort later – proportionate to their contribution and talent. Seek advice on framing the plan and communicate it clearly.
• Hold regular “tailgate” meetings, family retreats, or key member meetings. Let members vent simmering complaints– within reason. Approach these as learning opportunities. Collaborate and incorporate fairly offered ideas.
• Plan for succession when it makes sense and you are ready. Build cautions into the plan to discourage challenge to the plan. Communicate it well. A well-structured plan should reduce infighting.

Finally, enlist a third party coach – not a crony or other family member. Retain the advice of a specialist in family business matters to get things right from the start and to bounce things off as you succeed at your goals.

Heuristics influences marketing, management, software development, and decision-making. It contributes to algorithms and that pesky way that Amazon always “knows” what you want. This knack for cutting corners mentally to solve problems quickly and efficiently – heuristics – is one of many things that sets successful entrepreneurs apart.

Sometimes, small business owners get stuck. Worried about risk, debt, and growth, we can sometimes overthink things.

I admit that the best decisions are those made with the best information.  The better your input the less likely you are to decide poorly. Good information reduces bias and develops structure for good decision-making.

Enter heuristics. Very simply, there is value in an approach that is more rule-of-thumb than the management school process of testing a hypothesis with evidence and results. There is a real place for decision-making on a trial and error basis. Mistakes may happen, but it encourages learning, solution evaluation, and deeper understanding.

Setting this fancy talk aside, you want to respect and develop a talent for cool thinking. For example, when you are up against a seemingly large and complex problem, with no clear solution, you need a system to help you think.

1. Block out unessential information.  Someone said, “when the going gets tough, the tough relax.” Remember that “C-file” we all learned about in time management classes? I suggest that you don’t even keep such a file; just burn it. Run away; take your laptop to some place quiet. Turn off any internet access. And, work on the problem without distractions for a pre-determined period, say, 30 minutes.
2. Understand the Pareto Principle. 80% of the importance of a task comes from 20% of the work put into it. So, if you focus your energy on the critical 20%, you won’t overthink the non-critical 80%. Think of the pilot being forced to land on a river or a highway; there isn’t much training to fall back on, and there’s no time to weigh Plan A against Plan B.
3. Separate important tasks from the urgent ones.  It might be important to work out, read a good book, or have a nice lunch. But, these won’t make or break your business. Instead, determine what your personal peak productivity time is: early morning, mid-day, or even the middle of the night. Create walls around your peak productivity where you can work without bother or distraction.
4. Set up a debriefing process.  Knowing you are going to be making a difficult decision or a daring move, schedule a process where you can review and evaluate your decision, adjusting follow-through or implementing remedies.
5. Take aim and fire.  Think simple, and you will do a good enough job of solving enough problems. Move past indecision and take action. Visualize the result. Imagine yourself crossing the finish line. Clarify the problem in one sentence, and take a shot at fixing it. Jot things down, draw a picture, and make course corrections. Be ready to figure out things as you go along.

Imagine you need to move a product cross country despite a transit strike, inclement weather, and a three-day holiday. Think in a straight line until you hit a barrier. Move right until you can see a way forward. Go forward until you hit the next barrier, and continue as before. Eventually, you will see yourself at the end of your plan.

The right Small Business Coach can challenge you to set and achieve bigger goals in 2012, while helping you navigate the obstacles.  Know what you are looking for in order to choose the best candidate.  Read on for some practical advice for choosing the right candidate:

Let’s start with what you don’t need in a Small Business Coach:

• Nice is not a virtue. You want someone to hold you to high expectations. If you think you are a good manager, then, you probably have a skill in holding employees to performance accountability. You will best benefit from the advice of someone who practices the same demands. Expect to be pressed to the edge of your comfort zone.
• Expertise is not a priority. You need someone who is a good coach. What you need is cross-disciplinary skills: communication, planning, training, etc. These are valuable transferable skills that help you see the short and long-term.
• Avoid a therapist. Don’t pay someone just to listen to you and all your problems. Look for someone who will turn your path around. You need someone focused on action, plans, and deliverables. You don’t have the time for the coach to worry about your feelings.

So, what do you need?

• Someone you can afford. Bargain basement coaching is not worth the money. It will cost you time and money, and some outcomes may require additional investment. So, you need to be at a point where all this makes sense: the need, the expectations, and the price. Shop available coaches; seek word of mouth; look for referrals. It’s a big decision, and deserves focused investigation.
• Someone you can listen to. Coaching is partly a matter of style. If – and only if – you are ready to take a close look at what you are doing, you need to find someone with the rapport you need to take a few hits. You are paying to be told things you may not want to hear, to get tough about what you have been doing, and to push your face into some bad decisions you may have made. For this to work, you need someone you can work with.
• Someone with a plan. Demand a schedule and agenda in writing in advance. Expect the coach candidate to demonstrate goal-setting and effective planning. Ask to see models and samples of what the coach has done for other clients, and make him/her connect the dots between plan and results. Ask the candidate to introduce you to previous clients with your intent to seek their story of the relationship. And, be sure you talk to more than just one.
• Someone who knows what you don’t know. Remember, you are looking for someone to bring something new to you. Much of this should be in the form of plans and direction. But, you also want insights, product knowledge, marketing strengths, and fresh perceptions about your business. I am reluctant, for example, to recommend a coach who claims to be “all things to all people.” You’d be better off with someone experienced in your line or business or business sector.

A final caution is that you do want to see the track record or credentials of a coach who does this for a living. I am reluctant to recommend the coach who is an out of work MBA. Interview candidates with their experience in mind.

Creating loyalty doesn’t have to be difficult. It just takes good common sense. But. it also requires you to build a culture of service – at your virtual and real world sales counter.

We all know great customer service when we see it. When quality customer service is what brings them back for more (isn’t that what loyalty is?), why is it so hard for small business owners to pull it off?  try these tips to start building loyalty among your own customers and clients:

• Clean your windows! Be very aware of what your customers see from the street. Post clear, attractive, and inviting signage. Keep it neat and professional. Seasonal and whimsical can be appropriate, but keep it simple, so your identity is not lost. This applies to the front of your online business. Put emphasis on accessibility, ease of navigation, and welcoming design. Remember, website appearance must be an integration of visual design and search functionality. Pretty is a side-benefit and not a goal.
• Put your best face forward! Stop cleaning up after staffs who don’t meet your customers’ needs. Hire people-forward people, employees are keen on stepping forward, cracking a smile, and shaking a hand. Before you put them on the floor, make sure they know your key customers by appearance, name, and need. If you don’t physically meet your online customers, make sure your picture and those of your customer friendly staff are on the website. Encourage your customers to connect through Skype or Google+; it’s meaningful to put face and service together.  Make sure your employees know that customer loyalty helps pay their salaries.
• Keep them surprised and guessing! Think outside the usual seasonal and business cycle calendar. Hit them with a deal they weren’t expecting, an unexpected sale, or an email only discount. Take advantages of those slow times of the year to bring people back though social media and Groupon sort of discounts. Tie a deal to a referral or a customer anniversary. Surprise customer engaged employees, too; handout good service cash certificates, but do it sparingly and with some ceremony.
• Build a better mousetrap! To build customer interest in and employee support for a new product or service, structure their early involvement. Invite them to collaborate in the design, development, and delivery of a new product or service. Lay it out early what can or could go wrong, and seek input on quality improvement and service response. Give them a discount for their assistance and secure a partner for life.
• Under-promise and over-deliver! Keep and meet your deadlines. Structure your business to around delivery. Delivery built southwest Airlines, FedEx, and Amazon. This model makes a promise, meets its promised deadline, and keeps customers current on the process. They also hold their suppliers and vendors accountable for their part of the process. Maximize email, phones, and video conferencing in a scheduled structured strategy that communicates and engages.

Finally, be prepared to make it right when service fails. If you have built your business well, you can keep customers even when things go wrong. But, if they have bought into your culture, refunds are not enough. Make the mistake right and throw in a spiff, such as a gift or additional service. Whether you are selling coffee, books, or marketing advice, you have something the customer wants and needs.  It’s part of what builds customer loyalty.  It’s your job to make that multi-dimensional.

When the economy is tight, it’s not easy for small businesses to give back to their communities. For the record, 90% of our small businesses give to charities and non-profits in their area. And, 60%+ of them admit that charitable giving brings them success. 

Even when they are have little time or money to spare, small businesses find a way to support a local T-ball team, contribute equipment to schools and libraries, or mentor and coach. We want to share some of the ways our customers in meaningful ways without giving up big bucks or otherwise productive time. 

• Award a prize. Support a charity by donating a prize for a raffle or silent auction. Donate a product or a gift certificate.
• Give them a hand. Provide a service, such as printing, webspace, or window posting. Supply giveaways, such as promotional items, volunteer service, or volunteer hours.
• Put employees to work. Make volunteerism a part of your business pace work culture. Calendar a day when employees can volunteer to work at the local food bank, cook at a homeless shelter, or help local seniors.
• Take a collection. If your situation permits, collect customer spare change for local charities; change it monthly. Or, place a collection bin for used books or non-perishable food.
• Sponsor a scholarship. Contribute as little as $25 to a reading contest at your library or school, and call it a “scholarship.” Children and parents appreciate the support, regardless of the size.
• Join forces. Persuade the stores on your block or in your strip mall to promote a single campaign. It multiplies contributions and maximizes exposure. Partner with another small company in your sector to turn what may have been a small donation into a sizable one.
• Sit on a board. Bring your business and management skills to the board of a non-profit. Take the lead on bringing other businesses into line.
• Scratch a back. Trade your service for a link on the charity’s program or website.
• Hold a lawn sale. Sell used office furniture and electronics to raise money or donate it outright to local schools, churches, and libraries.

 Now, you can only work with what you have. Don’t over commit or spread yourself thin. Weigh your options when you are doing your 2012 budget. For example, you might take that $10/week payment for a tiny ad in your church bulletin and put it towards are larger gift with bigger exposure. It doesn’t lessen your charitable motives to expect community response for your effort. Small businesses serve their communities well, and support them with taxes, rentals, and payroll. There is no reason their loyalty should leave town.

We all know the “personality” who constantly seems to get in his or her own way. Short-tempered and shortsighted, the person(ality) doesn’t realize that these traits are getting in the way of greater business and personal success.

Are you killing your own business? Can your public personality mean the end to your small business?

Such people often don’t know how others feel about them. So, how are you to know if this is you? And, if you have developed bad habits, how do you change them?

Perform a personality audit.

Periodically survey your partners, peers, employees, and customers about your own performance. You can do this casually in the form of conversational questions meant to evoke an estimation of your personality presence. Or, you can use a survey service to seek the input. Doing this annually, for example, will tell your public that you are on top of this and that it is meaningful t you. Of course, it also suggests you will improve in response to the feedback.

Pick a peer.

Meet regularly with someone you trust, someone whose opinion you value, someone you can be candid with and who will retain your concerns and confidentiality. Pick an advisor from your Mastermind Group or even a customer who regularly sees you “in action.”

If you’re a family business, bring the family together for reasonably “lay it all on the table” meetings. If you’re small enough and your employees are vested in your success, invite them to speak up in a structured atmosphere. If you are big enough, seek feedback from your customers, clients, suppliers, and employees – but respect their privacy.

Build a model.

Assuming the feedback gets your attention – and who of us is perfect – fix what is easy to fix. But, personality habits are often deep seated and long practiced.

If it turns out that your personality might really be getting in the way of your business, find a role model. Look around your community, church and club, among your friends and your own business dealings for someone who seems to have their business and personal lives together. Such people are likable, their business is growing, people seem to respect them and flock to them. Identify and model some of the behavior traits that make them successful. My guess is that you will find these traits:

• Patience
• Humility
• Recognition of others
• Transparency/honesty
• Humor
• Resilience and flexibility
• Willingness to teach or share information

Start identifying these and other traits, find someone you can model, and start implementing these changes gradually. Personality is largely something we are born with. It is challenging to change, but it is done every day. Be patient with yourself, continue to seek honest feedback and you will find your relationships, business and otherwise, drastically improved.