Tuesday, May 27, 2014

Customer Complaints - How to Deal With Them

Customer service quote from Bill Gates
Use customer complaints as a tool to improve your business or products/services.
Last week I published an article I wrote on how to handle customer complaints, from an operational and legal perspective. That article was so popular, I decided to follow it with another article on handling customer complaints, from a more process-oriented perspective. (Meaning, exactly what steps do you take to handle customer complaints and address the customers concerns.) I'm taking a different approach and featuring a guest post by Lyndon Miles that addresses this topic. Questions? Please ask them in the comment box below. - TCW

Customer Complaints - How to Deal With Them

Dealing with customer complaints is a vital part of any company's operation. No matter how good the company, it is always possible for something to go wrong. When something does go wrong, it is how you deal with it that will ultimately make the difference between an unhappy customer and one who is prepared to get past the problem and give your company another chance. Customer will typically give your company another chance when they have been dealt with efficiently and with courtesy.

There are five golden rules for dealing effectively with customer complaints.
  1. Identify the problem. Make sure that you understand the whole complaint and every part of the problem. Until you know all the facts, you cannot accurately know the correct way to rectify the problem.
  2. Empathize with the customer. Try to understand how he or she feels and the disappointment or annoyance that the problem has caused. Apologize for this and for the fact that he or she has been caused this inconvenience.
  3. Find out what the customer expects the resolution to be. Is your customer looking for a refund, or a simple apology? Make sure that you know what is expected before you offer the earth.
  4. Keep the customer informed. If further investigation or evidence gathering is needed, then make sure that the customer knows what you are doing and that you will be contacting him or her with the result of your findings. Placing the onus on the customer to call you back will mean that he or she may have to explain the whole situation again to another operator. Take ownership of the problem and gain the customer's confidence.
  5. Learn from mistakes. Learn from any mistakes made to ensure that you avoid the same thing  in the future. Keep records of complaints to identify if one particular part of the operation is consistently having trouble, and if so, deal with it.

Complaint resolution is the one area where companies can often find themselves in direct conflict with their customers. It is true that there will be times when the customer is not right and that will be proved during the course of an investigation into the matter. But your company must always handle the process of dealing with a complaint with courtesy. Keep in mind that your customer is unhappy, had come to the organization with expectations of what he or she would receive, and had been disappointed.

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Having an effective customer complaint procedure is vital to ensure that your company deals with all complaints in the same way. Customers talk and word soon gets out regarding discrepancies in how companies deal with complaints, if the results for customers with the same problem are handled very differently. An effective customer complaint procedure will ensure that all customer service agents work from the same set of rules and can effectively and consistently approach and complete each stage of the complaint procedure. In this way, the various stages of a customer complaint investigation are traceable and quantifiable and can be analyzed to ensure that the most efficient resolution to problem is offered to every customer.

About the Author: Lyndon Miles is a writer on business and customer service issues. If you want to learn more, then please click here for further information

Article Source: http://EzineArticles.com/?expert=Lyndon_Miles_


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Thursday, May 22, 2014

Tips for Startups on Crafting Your Investor Pitch Deck

Investor presentation
Most investor presentations use Powerpoint (or an equivalent) but some incorporate white boards for emphasis.
One of the questions I get over and over is the following: "What should I include in my investor presentation?" This is an excellent question. I've had sales people who are used to making presentations tell me they know what they're doing. But it's different. Pitching to customers is not the same as pitching to investors. Your prospective customer and your prospective investor have different end objectives!

To make things a little easier to visualize, I've included a pitch deck (a fancy name for investor presentation) for Dwolla. This pitch deck helped Dwolla effectively communicate their message to investors and garner $16.5 million in funding.




Please note that the term "startup" in this case does not refer to a company with $0 revenue and an idea. Instead "startup" refers to a company that has generated some revenue, has customers, and has a viable product or service to sell. The customers may have committed to buying the product when it is ready (i.e., advance sales or pre-sales), the revenue may be very low, or the service may be in flux, but the startups here have a PROVEN concept.

Without even one sale or one customer commitment, how do you know someone besides you is even interested in what you have to offer. And if thousands of other companies already offer what you offer (which shows that a market definitely exists for your products and services), how will you differentiate your company enough to stand out and generate enough revenue and profits to satisfy your investor? Ah, these are the questions your pitch deck must answer.

This is another slide show, more generic, that covers what your startup should put in its pitch deck.

Essential Investment Pitch Deck Insights for Start Ups
Pitch Deck Essentials - Creating an Effective Startup Pitch Deck from Erika Malzberg

Keep in mind that pitch decks are not cookie cutter. These are suggestions! Strong suggestions, but suggestions nevertheless. Who your target investors are will influence your slide. If your company encountered issues that you have since addressed, then one slide must address that. In general, this is the information you want to include in your pitch deck

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Friday, May 16, 2014

Handling Customer Refund Requests

Irate customer complaining on phone.
Irate, dissatisfied customers often request refunds.
I recently was asked this question by a business owner that had been operating relatively loosely (in terms of contracts and documentation:
Question: How do you handle customer refund requests, especially when a deposit is involved?

Here is my detailed response:
Answer:

Any contract that you offer a customer or client must clearly state the terms, if any, for return of a deposit. The contract must clearly spell out the performance level / service level your company will provide. The contract must specify these levels directly in the main contract and can reference these levels in any proposal or quote you submit. When you are NOT very clear about what your customer should expect from your company, you leave far too much open to interpretation. This increases the risk your customers will not have the same interpretation as you. If your contracts do not currently include this information, you must modify your contracts immediately.

Service Levels and Attorneys

If you are unsure what type of terms or service levels you should include, you can use a larger competitor's contract or proposal as your template. All successful larger firms have highly specific SLAs (service level agreements) that clearly state the performance objectives that constitute success on their part. If your large competitor's contract does not work for you (for example, it is too complex or covers too many areas), enlist the services of an attorney to create a better contract. You can also use DocStoc or other services that provide legal documentation. Always have an attorney review and approve your contract before making that contract a standard part of your business operations.



Regular Communication

In addition to clear contract performance language, it is very important to provide customers with regular, ongoing communication. Instead of emailing, you may need to meet in person with your client if the company is local, or use Skype or another video presentation program if your customer is not. When clients get frustrated it is typically due to a communication breakdown. Therefore, more in-depth communication is better. When differences arise, it behooves you to iron out the differences as soon as possible.

Refund or Outsource Service 

If you or your employee did not clearly state the terms of the services your firm provides, you may need to refund a portion of the monies your customer paid or deposited. Either that or you can enlist the help of another service provider with high customer satisfaction who can step in and give your customer what he needs. Your options typically depend on the amount of time that exists before the delivery deadline. If you are close to or past the deadline, a refund may be the most suitable option. However, involving another service provider - when possible and applicable - is a form of "co-optition".  Friendly "co-optition" (a word from my MBA days!) can help you build partnerships and hence, your business.

Teacher explaining math on chalkboard.
Most of your education as an owner occurs outside the classroom.
Refund as Educational Expense

If you refund some of your customer's deposit or payment, consider the refund an educational expense. Sometimes we must lose money in order to learn a lesson. Any lesson that results in  the strengthening of our business operations - including contracts, customer service, and partnerships - is a valuable lesson. If addition, I highly recommend all business owners obtain business insurance that includes errors and omissions insurance. E&O insurance protects you and your business if your client decides to sue you for nonperformance.

Take High Road

Lastly, if a customer is truly upset by your firm's lack of service or poor performance, take the high road and be conciliatory. I have converted irate customers to long-term customers by biting the bullet, apologizing and genuinely taking their comments to heart. Even if a complaining customer does not come back, he could still provide a reference at a later date. He may not have liked your particular service offering for himself or his business, but he could recommend your service to others who he may find a better fit for what your company offers. You always have an opportunity to provide good customer service, even after parting ways!

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Friday, May 9, 2014

Franchise Startup Costs - How Do I Finance Them?

Have you considered becoming an entrepreneur through purchasing a franchise? If so, have you considered where your funding to purchase and grow the franchise will come from? Looking for insight and suggestions. Read this guest post by KB Massingill.-TCW

Entrepreneur magazine maintains a list of the top 500 franchises.
Franchise Startup Costs - How Do I Finance Them?

Don't be surprised if a franchise executive wants to know three things about you when considering you as a franchisee. Franchisors want to know how much cash you are able to put toward the purchase, how much you can or will be willing to borrow, and your net worth (all of your assets minus all your liabilities.)

The cash you are willing or able to put toward the purchase, how much you will need to pay yourself during the critical startup months, your ability to borrow, and potential partners are just a few of the ingredients that will go into the unique funding mixture of your franchise purchase.
Just because you have cash, for example, doesn't mean that you should deplete it all on the purchase of a franchise. Like it or not, very few franchises are instantly profitable. Therefore, many new franchisees need to specifically plan to have adequate operating capital in place so that they can pay themselves a salary for several months or even years. This decision alone might cause you to borrow more and use less cash. Dave Ramsey proponents are likely to want to wait to purchase a franchise until after they can pay 100% cash. In short, how to finance your franchise opportunity has more to do with your personal needs than what franchise you are buying.

You can use your 401K to fund all or a portion of your franchise purchase.
Option: Use Your 401K Plan

One option is to use funds in an existing 401k plan rather than borrowing money. The nuances of using your 401K demand a much longer article than this, but here are the basics. Money in an existing 401k plan can be transferred into a special type of 401k that will allow you to purchase stock in your own company. This often requires that your company be organized as a C-Corporation rather than an LLC or other type of business entity. Many companies such as Fran-Fund and Benetrends specialize in helping franchisees make this work. Done correctly, this approach can be managed with ease, but it should never be undertaken without the advice of experienced professionals and your attorney. Using your 401K in this way can create some interesting and potentially beneficial financial options, but again, should be considered carefully. Some would consider using existing retirement dollars over debt as a conservative approach while others might consider it quite risky. Consult your business advisers if this is a decision you are considering.

One final note, using your 401K funds this way will involve a rather significant one-time fee that typically includes the establishment and registration of your corporation. Despite this, use of your 401K is often a great choice for careful investors. However, it is worth noting that, if the amount you are intend to use is less then $30,000, you may prefer to just withdraw your 401k funds, pay the IRS penalty, and possibly end up spending less to obtain the funding. This decision, like any funding question that has tax consequences, should only be considered with the involvement of your CPA, your attorney, or both.

All storefront retail franchises involve real estate.
Options Involving Real Estate

Many franchises can be operated with little or no real estate investment but, for those that require a retail space, part of your financing considerations will relate to leasing or purchasing real estate. Purchased real estate can often be self-collateralized, meaning the property will secure the note against it. Unless you are able to build the space from the ground up and obtain a loan for the construction, you will likely have to find a way to pay for or finance lease-holder improvements required by the franchiser.

If you purchase a moving or hauling franchise, you'll need trucks.
Options Involving Equipment

Similarly some franchises require significant equipment purchases while others do not. If your chosen franchise requires equipment, you will need to find a way to finance the equipment. Under many conditions lenders can provide equipment loansn or equipment leasing options to lenders who don't qualify for standard business loans.

Some franchise systems have in-house financing available to qualified buyers; others do not. In-house financing is appealing in many cases, but often may include interest rates that are not as attractive as a buyer may obtain from other sources. Franchises that offer in-house financing are much more likely to spend time and energy evaluating your business expertise, motivation, sales skills, etc. as a means to pre-qualify you as a buyer.

Option: SBA Loans

The US Small Business Administration can assist new franchisees with loans. This is a topic that warrants a complete article, however, here are some limited basics. SBA loans often come from local banks and other customary lenders, not actually from the SBA. Instead, SBA loans are backed by the SBA. There are several types of SBA-related loans available. Generally, lenders prefer to loan more than $150,000 rather than smaller amounts, and these loans will almost always require collateral similar to any other business loan. In some cases the equity in your existing home may fill the collateral requirement. SBA loans often require increased documentation. You can contact a Small Business Development Center in your area to help you evaluate your options and complete your paperwork. In some cases your selected franchise will assist you with the writing of the necessary business plans and documentation required for SBA loans.

If you take money from investors, you cede some control.
Option: Investment Capital

When starting a new business there is always the option of seeking investment capital. In other words, you can sell a percentage of your new company to investors in exchange for the money to get started. While this is a fairly common approach to funding a new business, it is less common among new franchisees. This may be due to the fact that many new franchisees leave jobs and become franchise owners as a means to have more control over their own destiny, and perceive even minority investors as a potential threat to that goal. Similarly, using investment capital requires careful planning, the involvement of attorneys, and an understanding of C-corporations, LLCs and similar complex business structures. Venture capital substantially complicates a business arrangement, and new franchisees often choose to buy a franchise over starting from scratch as a way to reduce complexity.

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As a franchise consultant, I always encourage potential franchisees to ask their selected franchise to help them consider funding options. Top franchises will almost always be willing to provide you information on financial options. Similarly, I advise clients to seek the advice of their CPAs and attorneys.

About the Author: Dr. K.B. Massingill is President of Franchise Thinking, http://franchisethinking.com. Franchise Thinking provides franchise brokering and consulting for individuals wishing to own their own business. Franchise Thinking specializes in helping executives, and executive sales people locate franchises appropriate to their need. 


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Tuesday, May 6, 2014

Financing Your Startup: Conversations with Business Bankers

For most startups, you need to have money in the bank to withdraw it for your business.
I remember when my younger brother was five years old and he asked me to buy him a Sega Genesis console and games. I told him I needed some money to do that. He told me to go to the ATM and get some because the bank had lots of money! While that's true, it needs to be in your account to gain access to it!

In this blog post I share a couple of conversations with business bankers that focus on serving small businesses. They illustrate the difficulty you run into obtaining business loans for financing your start-up.

How to Finance Your Start-Up Business

Here's a video of a brief conversation with a vice president of small business accounts at Bank of America. In this video the business banker provides you with a rundown of the traditional sources of start-up capital for businesses in all industries. Sound familiar? Probably. But he's right.



A bank provides loans at such (relatively) low interest rates because the bank mitigates its risks by focusing on companies with consistent, sufficient operational cash flow and net income. Start-ups in the very early stages very rarely have either. For the rare startup that is profitable out of the gate, the company still does not have the operating history a bank typically looks for. Minimal operating history means your company's current performance could be a fluke.

Small Business Startup Funding Sources

Here's one more interview with yet another Bank of America business banker focused on the small business market, Mark Hogan. (Actually, Mark Hogan is the President of Small Businesses at Bank of America!) Mark gives a wider range of options and puts them into three different categories.



The three "buckets" the financing is grouped in is as follows:
  1.  Personal capital
    1. This category does not just include funds in your personal bank or savings account. This category also includes the monies lent to you or invested in your firm through your personal relationships - family and friends - who believe in you and your idea or company.
  2. Consumer finance
    1. This category includes personal credit cards, second mortgages and other loans using your personal credit that you take out to fund your business.
  3. Business credit
    1. This category includes business loans which, for start-ups, may initially be backed by your personal guarantee or the personal guarantee of a family member or investor. This category also includes business credit cards which may also initially be backed by a personal guarantee. As the company ages and develops a track record and verifiable financial history, the personal guarantees will go away.
       
Want to know more about non-traditional sources of start-up capital and how to obtain start-up funding from smaller banks focused on small businesses?

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