Tuesday, December 19, 2006

Food for Feedback


I don’t talk to many spa owners who feel their customer service is sub-substandard. Many already use customer-feedback tools, including customer comment cards and even in-house or professionally conducted surveys. The more vigilant spas are monitoring their buzz on online review sites like Yelp! And Citysearch. According to the University of Michigan’s American Customer Satisfaction Index, customer happiness is at its lowest point in two years.
Getting into our customer’s heads has turned into an obsession. What are they thinking? What are they saying?

Turns out, there’s one simple question that will not just tell you what they’re thinking, but predict its impact on your bottom line. A system called the Net Promoter Score measures the likelihood of a customer recommending you to others—which proves to be a very accurate indicator of business success.

Fred Reichheld, a business consultant and author, recently released his book The Ultimate Question, which explains the Net Promoter Scoring system. The system, which the author has used for three years, was also described in an article in the Harvard Business Review last year.

The question is very simple: “On a scale of 0 to 10, how likely are you to recommend us?”

A score of 9-10 indicates a delighted, loyal customer who is willing to promote your company. 7-8 suggests satisfied customers who are “passive”, or non-promoters, and 6 or below is an “active detractor,” someone who is promoting you to others—in the wrong way.

In other words, the only customers who will build your business are the ones who give you 9’s and 10’s. To get your Net Promoter Score, you subtract the percentage of detractors from promoters. Reichheld says that most companies he studied actually scored between 10 and 20, with the “A Players”, appropriately, racking up scores over 80%.

The author tested many similar questions before hitting on this one. For some reason, the Ultimate Question crystallizes feelings about customer satisfaction almost perfectly, creating a highly accurate indicator of a company’s ability to win new customers and retain existing ones.

Best of all, it’s simple. You can implement this system tomorrow at your spa. Place cards with this question at your front desk and have your concierges graciously invite each departing guest to complete one. It will take about ten seconds. We added two questions, with the same 0 to 10 scale, asking guests to rate their individual therapist’s “recommendability” and their satisfaction with our facilities and amenities. We also give them a space for comments under each. This helps us pinpoint areas for improvement. We also discreetly note the guest’s name on the card after they’ve departed, so we can address specific situations that need to be rectified.

We review our score at each week’s management Progress Meeting.

If you’re new to customer feedback tools, take heart. For years, I ran my spa without explicitly asking for people’s honest feedback. It’s easy to get complacent, or assume you’re doing the best job you can. No one wants to go looking for trouble. But like any long-avoided cleaning chore, once you roll up your sleeves you’re glad you got into it. Though no one likes to be criticized, “outing” customer problems and frustrations ultimately empowers you and your team, improves your business and increases everyone’s confidence.

I’ll never forget reading our early comment cards—it wasn’t fun, but I was grateful to finally have the bag off my head after five years in business! The first time you pick up a stack of comment cards from your front desk, you may get butterflies. Then it becomes routine, even something you look forward to. Customer feedback provides the crucial course corrections you need to make sure you keep your business steaming confidently through the spa industry’s choppy waters.

Visit netpromoter.com for more information on how you can use the Ultimate Question in your company.

Wednesday, December 13, 2006

Welcome to the Wynne Business Spa Industry Update!

Welcome to the Wynne Business blog--I'd like to involve you in a frank and engaging conversation about the latest business thinking, trends and market conditions in the spa industry. Each month, if not more often, I'll share my thoughts about the issues that impact spa operators--from small to large. As an avid consumer of conventional business media, I'll also pass along resources and ideas that I find especially useful. (Check out this month's issue of Harvard Business Review for an excellent article on strategies for dealing with low-cost competitors!)

I'm very excited to announce the launch of the Bay Area Spa Leadership Round Table on January 31, 2007. If you'd like more information on this quarterly Round Table, designed to disseminate best practices and provide cutting-edge management intelligence, please contact Program Host Dionne Fountain at df@wynnebusiness.com. Membership is open to spas with annual revenues of $1 million or more, and a different member spa hosts the meeting each quarter.

The three hour format includes a group round table discussion, an expert presenter, and a "case study" in which the host spa can present an idea or issue they'd like group input on. Meetings run from 9:30 a.m. to 12:30 p.m., and kick off with a continental breakfast at 9:15 a.m. Annual membership will be just $100 for four meetings, and up to two representatives of the member business management team may attend.

The Bay Area Spa Leadership Round Table is sponsored by Wynne Business and Spa Trade.