What are your business standards for employee performance? Do you know your customers’ expectations? What is the standard for your product or service? Do your employees know your customers’ expectations and what you expect of them? All of these are questions that every small business owner should be asking of themselves and their operation on a regular basis. If you’re not familiar with your answers, follow these three simple tips for setting standards:
Three steps to setting standards:
1) Know your customer and competition – Understand what the competition is delivering and what areas you want to match and other areas you want to exceed. Based on your customers’ needs, you may even be able to set some lower. Here’s an example: in a low margin commodity business, price may be slightly more important than excellent service. Note that “good” service is always needed but may not need to be “excellent” in that space. Know what your competitor is offering in terms of current as well as new customers, and expect to set your foundation accordingly.
2) Train your team – Once you determine the standards for your product or service – train you team. Enable and empower them to make things right when a mistake is made. A speedy response and resolution close to the situation will set you miles apart from the competition. If it is something that needs to be escalated – be sure your team understands the process and can explain the resolution steps to your customer along with a timeline. Clear communication along the way.
3) Measurements – For any standard to be upheld – it needs to be measured. Know what the customer standard is and set the goal to be above that. A general rule I recommend is 10% above customer expectations. With normal variations in service or product, if you set the standard at the customers’ expectations level – you will miss more than you would like. By setting the bar slightly higher and striving to deliver to that – you minimize the possibility of not meeting expectations due to normal variations.
Example of normal variations
The red line illustrates the customers’ expectation. Going below that line means the expectation was not met. The green line is the targeted business standard. Anything above that is of no value to the customer and may add costs. The goal is to keep the blue line, variations, between the customer and business standard as much as possible.
Meeting customer expectations can be difficult. It is even more difficult when a standard is not defined. Reduce customer complaints through proper employee training and measuring the results.
Standards are not static. As customers’ needs change and as the competitive landscape evolves, so should your standard. Would like to hear you feedback on what you measure and how it helps your small business win. Small Business, Big Lessons™
About the Author:
Gregory Woloszczuk is an entrepreneur and experienced tech executive that helps small business owners grow their top and bottom line. Gregory believes in straight talk and helping others see things they need to see but may not want to with a focus on taking responsibly for one’s own business. He and his wife, Maureen, started GMW Carolina in 2006.