Chapter 8: The Power of Yes – Customer CEO: How to Profit from the Power of Your Customers

8

The Power of Yes

Key Customer CEO Question:

Igrew up in the 1960s in Dallas, Texas, and I vividly remember a breezy little radio jingle that happily sang, “First National Bank says ‘Yes’!” Even then, a long time before banks could spell the word “marketing,” that locally owned downtown bank—or its ad agency—had figured out that customers were much more inclined to do business with you if you made doing business easy. The Power of Yes means, “We are here to serve you.”

In his book Quest for the Best, the late Neiman Marcus chairman Stanley Marcus wrote, “Customers have the perception that service is an indication of interest in them as individuals, not just as robots dispensing money.”1 He said that going well beyond the call of duty would create “a state of euphoria, which in turn fosters loyalty.”2 If we claim to believe in customer service, doesn’t that mean we believe in serving the customer more than serving ourselves—even if it means losing a sale today? What if a competitor offers a better solution to the problem the customer is seeking to solve? Will your frontline people recommend a competitor as a better solution in order to better serve the customer?

Many believe that the best Christmas movie of all time was Miracle on 34th Street.3 In the story, the Macy’s department store’s kindly old Santa, played by actor Edmund Gwenn, would send mothers across the street to the dreaded competitor, Gimbels, to buy items Macy’s didn’t stock or if Gimbels offered a lower price.4 Gimbels quickly adopted the same policy so it wouldn’t look like a store run by greedy Scrooges at Christmastime. Finally, Mr. Macy and Mr. Gimbel shook hands and became allies, at least for that particular season. In the movie, they said yes. Why is it so hard to say yes in real life?

Jan Carlzon, former CEO of Scandinavian Airlines, told a story about the Mandarin Oriental Hotel Group in Asia.5 He explained that the hotel’s official policy was to not permit its frontline staff to say no to guests. The staff had to ask special permission from upper management to say no, and could do so only if they believed the guest’s request was too extravagant. Carlzon became widely known and respected for what he called “moments of truth,” and he titled his book Moments of Truth: New Strategies for Today’s Customer-Driven Economy. He proposed that every contact with the customer is a moment of truth. In order to identify and create better moments of truth, companies have to shift from inside thinking to outside thinking. This becomes a “moment of magic.” Customers expect and demand no less. This is the Power of Yes.

A few years ago, my wife bought me an expensive dress shirt for my birthday. Before wearing it, I dropped it at the neighborhood dry cleaners we had used for many years. I picked it up a few days later and noticed that the sleeves were torn and tattered, as if they had been run through some kind of paper shredder. I took it back and the manager blamed it on the material the shirt was made of, telling me it wasn’t really their fault. I was stunned, and reminded her that we had spent more money than I could remember at her store for more than a decade. They were our exclusive cleaners and had gotten 100 percent of our business. We were the very definition of loyal customers. I explained that the shirt had cost over $100 and had never been worn. But it didn’t faze her a bit. She said, “We’ll give you a $25 credit for your next order but we’re not going to replace the shirt.” I never returned. She only had the power to say no, and it cost her company thousands of dollars in lost revenue from me and from everyone I told about the incident. That cleaners flunked its moment of truth by practicing the power of no.

In researching this book, I was tempted to write about Customer CEO companies that masterfully understand the Power of Yes, like Nordstrom and Ritz-Carlton Hotels. Those are exceptional companies that truly love their customers. But I wanted to focus on some lesser-known examples to serve as inspirations for businesses of all sizes. If you look carefully, you can see “yes” in some unexpected places. Let’s take a look at the Power of Yes.

The World Is Flat

At a time when “customer service” seems to be a dying art, I was kind of surprised to find it in spades in a tire store—and a discount chain tire store at that. I had an error in my TPMS (tire pressure monitoring system) that my mechanic could only half diagnose. He had the tool to read the computer error code and find out that the transmitter in one of the tires was no longer transmitting a signal. Unfortunately, he did not have the tool to determine WHICH transmitter was dead. I called the cursed dealership (I hate you with a white-hot passion) and was told I’d have to leave my car overnight for them to diagnose the problem, they’d charge me a diagnostic fee of $99.50, and they refused to give me even a rough estimate of how much it would cost to replace the sensor until after THEY diagnosed the problem.

My mechanic recommended that I call Discount Tire instead. They said to come on by, they had the correct diagnostic tool and they’d happily diagnose the problem for free. And why wouldn’t they? I watched the process, which took exactly 2 minutes and involved holding a receiver next to each tire to see if the transmitter was sending a signal. Good on Discount Tire. Another boo (but not a surprising boo) for (the dealer) for finding yet another way to hose their customers. After confirming the problem, the guy at Discount Tire quoted me $75 for the part, which they unfortunately did not have on hand, and sent me on my way. A few hours later he called to let me know the part had arrived and scheduled a convenient time to have it installed. I arrived at my scheduled time and was immediately taken care of. A tech showed me the part and told me what he was going to do. He did the job, walked me through what he had done, and sent me on my way, all in under 15 minutes. In the 15 minutes I was in the shop, I watched clerks and technicians alike addressing customers and one another with respect. The techs looked like they enjoyed what they were doing, too.

Are any of you other businesses out there listening? THIS is how you get people to come back. THANK YOU, Discount Tire. You blew my mind today. I will be back for all tire and tire-related needs. I just wish I could send all my other service providers to you for training. If my doctor’s office ran like Discount Tire, I’d actually make an appointment and go!

Robyn, Austin, Texas6

Reviewer of Discount Tire on yelp.com

Imagine building a $3 billion business by giving stuff away for free to complete strangers. That’s what one company has done for the Robyns of the world. And for me, too.

Odds are you have never heard of Discount Tire. Although the company has eight hundred stores, they are located in only twenty-three states. It captures about a 10 percent share of the U.S. tire market. It’s one of those businesses you only think about when you need it. Discount Tire is a quiet company that doesn’t even belong to its industry trade association. “We like to let our actions speak louder than our words,” CEO Tom Englert said.7 Discount Tire may be quiet but its embrace of the Power of Yes speaks loudly. “Our store managers and employees are empowered to do whatever it takes to satisfy the customer,” Englert said. “There is a great autonomy in our stores that helps them meet the individual needs of the customers in their particular areas.”8

The company estimates that it says yes at least six thousand times a day to people who just want a flat tire fixed. Discount Tire fixes these flats for free. The company leaves a significant amount of money on the table today in order to generate up-front loyalty before the purchase. That’s how I first became a customer. I can’t remember the precise year I first heard of Discount Tire. I couldn’t believe that a store would fix something for free if it hadn’t originally sold me the product. But founder Bruce Halle explains that people are very grateful for having their tires repaired at no charge and “we’ve made a customer for life, probably.”9 In my case, that’s exactly what happened. I have lost count of the number of tires I have purchased from the company over the years. My wife and I estimate that we have had at least thirty encounters with Discount Tire. We cannot recall any negative experiences, only positive ones. Employees don’t try to up-sell you, they just answer your questions and get you back on the road as fast as possible.

Discount Tire’s Power of Yes culture stems from Halle’s ideas about treating customers and employees like family. He told industry publication Tire Business that from the beginning he wanted “to treat people fairly and to just be nice.”10 As a customer, I’ve been told by store employees that they didn’t want me driving on unsafe tires. While that may seem like a small thing, it speaks volumes about the deeper connection the company feels for its customers.

Notice that Discount Tire has stayed the course by selling and servicing only tires and wheels. The shops don’t change oil, do front-end alignments, or sell other add-ons. Michael Rosenbaum, author of Six Tires, No Plan, which chronicled the company’s story, explains, “All of these issues would be of great importance if the company was selling tires, but the significance declines greatly when one realizes that the company’s product isn’t the tires, but the tire replacement experience.”11 Halle understood that no customer wants to buy new tires. It’s a giant pain that takes you away from more important pursuits. Customers need, no, make that have to, buy new tires. This is an incredibly important distinction. This is where the Power of Yes lives. Halle turned an unpleasant situation into a positive experience that builds deep and abiding loyalty.

King of the Castles

The worst thing for me is that no matter what we tell a host hotel, they always seem to get it wrong. Planning a big event can take us a year but in those two or three days on-site I age ten years. No matter how much we spell things out or scream and yell, nothing ever seems to change.

Louise, New York City

Participant in a customer interview about corporate planning and hotels

Louise speaks for every event planner I have ever met. For the most part, planners are serious professionals, laser focused on pulling off their events to perfection. They say that the one thing they can be certain of is uncertainty. Whether the event is for six or six thousand attendees, planners know there will always be problems. In recent years, the situation has been magnified as hotels and other venues have reduced staff and become dependent on technology to take care of the minutia. Of course, this affects every participant.

Recently, I was speaking to a group of three hundred attendees at a national trade association at one of the largest hotels in Las Vegas. As usual, I checked in with the conference organizers early to test the room’s setup for my presentation. When I plugged in my laptop there was zero sound for the video portion of the presentation. The room was nearly filled before the audio video guy showed up. I was sweating it because the video we had produced for the session was critical. The planner was distraught, and essentially threatened the guy with his life. Two minutes before showtime, we finally had sound. He smiled and said, “Break a leg.” Just an everyday occurrence in the event planning business, no doubt.

The stress of all of this uncertainty wasn’t good for Jacques Horovitz. He grew so frustrated with the poor level of service for conferences and events that he decided to do something completely different. He launched his own venue. He founded Châteauform' in 1996 with a single location in France. Now his business encompasses thirty-three locations in seven European countries. Horovitz explained:

I have been organizing residential seminars for executive committees, management meetings, and every type of department across Europe, Asia, and the Americas for over 30 years. I have always been struck by how poorly venues cater for such events. Sometimes the meeting rooms are uncomfortable or badly equipped, sometimes the venues themselves are unsuitable—they are frequently too large and participants feel lost among other groups, wedding parties, business people, and holidaymakers.12

Imagine a place set up for businesspeople to actually take care of their business. And these are not nondescript locations in crowded urban centers: these are beautiful, expansive, old-world villas and castles. Châteauform' venues combine historic European architecture with modern technology so that customers can work, team build, dine, and relax. In the mood for a quiet planning meeting surrounded by antiques from the Italian Renaissance? Try the Villa Gallarati Scotti in Vimercate, Italy. Feel like holding a sales conference with a Swiss mountain experience? There’s Le Chalet de Champéry, in a Swiss alpine village at the foot of the Portes du Soleil’s four hundred miles of ski slopes. Perhaps you would like to hold a board meeting while sampling some British history at Châteauform' at Hever. It’s part of the estate that was once childhood home to King Henry VIII’s second wife, Anne Boleyn. Of course, there’s no better place on earth to brainstorm than at a castle in the heart of the French Beaujolais wine country, La Maison des Contes, situated among the vines in the Rhône river valley.

As you can see, these are not your everyday meeting facilities. It’s hard to imagine much work getting done there, isn’t it? But this is the genius of Horovitz’s concept. His team has created perfect places to say yes to a clientele that is usually told no by venues that treat them like cattle. The locations may seem extravagant, but they are considerably less expensive than urban choices. They are situated in small villages in the countryside, usually about an hour from a major airport. Châteauform' tells planners that its venues are not hotels with cut-and-paste meeting rooms but high-tech “elegant yet comfortable properties set in private parkland well away from the hubbub of city life, offering an environment conducive to strategic thinking, productive meetings, team-building, and relaxation.”13 Besides the beautiful surroundings of its locations, why is Châteauform' truly the “home of seminars”?

The key piece of the company’s business model is an on-site husband-and-wife management team. These are highly experienced hospitality experts who deliver concierge service, one group at a time. They share in the profit of their facility, so they are incentivized to build long-term relationships with their customers by saying yes. They fulfill the needs of their most important customers, the event planners, by delivering remarkable events. Instead of wondering whether the food will be ready or the projectors will work, planners can relax. Each Châteauform' management couple is trained to continually adapt to each event’s specific needs. If there’s a special request or a last-minute change, the answer is always yes. Instead of corporate rigidity and rules, the company actively promotes its flexibility.

At the heart of the experience is the meeting room. The company understands how important atmospherics are to a successful outcome, including lighting, temperature, comfortable seating, and technology. Many rooms are outfitted with the latest technology, including interactive touch screens and smart boards. The facilities are very exclusive, designed to support only a small number of business groups meeting at the same time. Under no circumstances are there tourists like you would encounter in a typical hotel. Châteauform' also offers world-class food prepared by full-time chefs as well as plentiful recreational diversions designed to promote team building.

At Châteauform' they love to say, “Everything is possible, you just need to ask!” Customers are encouraged to suggest any out-of-the-box idea that will make their sessions better. The staff knows that the whole point of a few days away from the office for busy executive teams is both to conduct some important business and to improve their collaboration and productivity. The company also reviews customer feedback through what they call love or loathe letters.

Marion Debruyne, partner and associate professor of Vlerick Leuven Ghent Management School in Belgium, wrote about the importance of customer insight at Châteauform': “Being a customer-focused organization requires continuous listening to customer demands and feedback. At Châteauform' that means processing 5 million ‘Sweet or Sour’ customer satisfaction surveys a year. But it also means a culture of continuous adaptations in small and big changes to the offering to respond to customer concerns. Innovation and customer focus go hand in hand.” Horovitz puts the Power of Yes into action because of his attitude toward his customers. Debruyne explains, “Profit is not the ultimate goal. Making happy customers is. And oops, what do you know, that tends to lead to profitability! Happy customers means spontaneous word-of-mouth, lower marketing costs, higher loyalty, increased share of wallet, lower price sensitivity . . . all driving profitable growth.” Yes, profit happens when you allow the Power of Yes to live and grow within an enterprise.14

Let’s Partner Up

I handle all the contract administration for five states. We usually have at least twenty projects going on all the time. Guys like me don’t have the time to tell these equipment salesmen all about our business every time they drop in. If they want our business, they need to know something about us before they show up. And don’t act like a know-it-all.

Norman, Ft. Worth, Texas

Participant in a focus group about business-to-business customer service

In the mid-1880s, Benjamin Holt invented the Link-Belt Combined Harvester, which eventually became known as the Caterpillar tractor.15 That invention led to the formation of the world’s largest equipment and power systems company, still called Caterpillar, Inc., often referred to as “Cat” for short. With its roots in the invention of these powerful machines, Benjamin Holt’s heirs today run an organization called Holt Cat. Holt Cat is the largest dealer of Caterpillar equipment in the United States. Headquartered in San Antonio, Texas, Holt Cat serves 118 counties across Texas and is led by CEO Peter M. Holt, great-grandson of Benjamin Holt. A hundred years after that first invention, Peter Holt saw the need to develop a long-term vision for his dealership. Working with management consultant Ken Blanchard, Holt adopted a values-based leadership model to move the company forward. Putting forth a vision, mission, and value statements for the entire world to see was a radical step in the construction industry. It was a way of boldly signaling to customers, employees, and suppliers that Holt was not just about profit. The company was announcing its plans to serve the customer with integrity and excellence.

According to Larry Mills, executive vice president of Holt Companies, “Our entire process defines success in terms of leading by a set of deeply held ethical values. This is in contrast to business as usual, where success is often defined only by size and profit. Our model says our whole community—employees, customers, shareholders and other stakeholders—will directly benefit from association with a company committed to doing the right thing.”16

One of the driving principles at Holt Cat is to make sure that the Power of Yes works every day. Dave Harris, executive vice president and general manager of the dealership, calls it “concierge service.” What does concierge service look like? “It’s always going the extra mile,” Harris explains. He says it starts by asking really good questions: “Our mission is clear: to provide legendary service for our customers. Our customers know what they are trying to accomplish. I think our job comes down to asking the right questions to help them find the right solution.”17

Holt Cat people on the front end, whether sales or service, are taught to never assume they know more than their customers. Harris says the moment you think you know more than the customer does, everything changes. “We can tell our people to walk in our customer’s shoes, but the truth is we can’t. We have to really listen to them first and foremost. That’s how we gain the insight to keep driving the business forward. We have to solve the problems they really have, not just try to sell them machines we have sitting on our yard. It’s really a partnership.”18

The company decided to expand its customer engagement strategy of saying yes by launching a new kind of customer support center. After eighty years in business, Holt is attempting to go where most dealerships haven’t gone before by dramatically improving customer communications. Edward Craner, vice president of strategy and marketing, said, “To increase transparency and cut out red tape, we created the Sales Support Center to make it easier for current or prospective customers to get in touch with the right Holt person across the company. Instead of wasting customers’ valuable time looking for answers to mundane questions about their equipment, parts and warranty, we’ll do it for them.”19 Holt wants to throw out the rulebook that naturally evolves in legacy companies. Craner should know. He’s a veteran of AT&T. “All that corporate red tape is designed to make our lives easier, not the customers’. Today they need much more personalized experiences and problem solving. That’s what we are working towards becoming: even more of a high-touch kind of business.”20

Most of Holt’s customers are literally digging in the dirt somewhere in their territory. That means machines often break down, even the powerful Caterpillar equipment called “yellow iron” in recognition of the signature Cat color. The company stocks nearly a quarter of a million different parts for the varieties of Cat equipment they sell and service. But, many of the company’s customers are working in remote parts of the state, so Holt created a Parts Express delivery system. It delivers over 98 percent of ordered parts overnight to 180 strategically located parts pickup locations, in nearly every county it serves. Cat’s Parts Express trucks travel more than 6,500 miles a day to say “yes” to customers.21

Harris says that Holt has a reputation with its customers for not “beating around the bush.” Holt encourages local management teams to solve customer problems as soon as possible. In the construction business, time is money. Often, contractors face large liquidated damages for job delays.

Holt is also in the power systems business. It sells and rents power-generating equipment that customers of all types use for primary or backup power. John, a loyal Holt customer, is a Texas-based concert promoter who travels internationally with major shows like the Trans-Siberian Orchestra. He says, “A lot of companies just rent you the generator. They fail to understand that I cannot afford any kind of an outage during a show. Between the lights and instruments, we are talking hundreds of thousands of dollars in equipment that can blow with one surge. My guys at Holt grasp that and go the extra mile to prevent it from happening. My only regret is that I can’t take them with me around the country.”

In an effort to continually remind their customers of the company’s desire to serve them, Holt created a marketing campaign called “Let’s Partner Up.” The campaign is used throughout the company as part of its internal brand training. Every Holt team member is a “Let’s Partner Up” brand ambassador. Members look for every opportunity to thank their customers for their business. Harris said, “We know who pays the bills. They honor us with their business. And that’s what keeps us going.”22

Profiting from the Power of Yes

When we look at the reasons that companies like Discount Tire, Châteauform', and Holt Cat have succeeded, it’s not that complicated. They consistently look at their businesses from the customer’s point of view. Then they figure out ways to empower their frontline people to stop saying no. This kind of thinking starts at the top. We see that in the attitudes of Bruce Halle, Jacques Horvitz, and Peter Holt. They practice no “no.”

These companies profit handsomely by earning their customers’ loyalty. But delivering on the Power of Yes takes much more than thinking it’s a good idea. It means telling the truth. Frankly, it’s why so many companies cannot say yes. They are shading the truth or making excuses to the customer. Everyone screws up occasionally, even Discount, Châteauform', and Holt. But the difference is, these companies own up to mistakes as part of their Customer CEO culture. These companies tell their customers the truth. Customers are either there to be manipulated for more money or they are seen as the reason for your existence. It can’t be both. I challenge you to start thinking about your opportunities to quit saying no and start saying yes. Yes organizations are healthier and build more sustainable businesses. Saying yes makes a lot of sense.

Yes Companies Go Viral

Saying yes is contagious. You can’t keep this attitude locked up in the attic. It welcomes the sunlight. Your people are waiting for permission to not say no, like the staff at the Mandarin Oriental Hotel Group. Once customers begin to understand this change, they keep coming back for more. Look at Discount Tire. By fixing flats as a gift, the company gives customers lifetime value that is significantly higher than that offered by its competitors.

Yes Companies Keep Getting Better

Innovation really means incremental improvement. It does not have to be a momentous jump forward; it can be small, incremental changes that improve the customer experience. Being a customer-focused organization requires continuous listening to customer demands and feedback. We see this at Châteauform', which constantly seeks ways to stretch itself as a company. Management isn’t arrogant enough to believe that all the good ideas come from within. Here’s a secret: sometimes the best ideas come from without, meaning from your customers.

Yes Companies Say “Power to the People”

It’s everyone’s job to say yes. Why does this seem so radical? Is it because we love to make rules and regulations to control our employees? The truth is, you restrict the happiness of your employees and your customers by not shifting more power to your people. At Holt, hundreds of field technicians go out into the field every day to face difficult situations with customers who can be openly hostile because they aren’t making money with equipment that’s down. The company has empowered its techs to make the call about what needs to happen, because they are in a position to know what’s best.

Yes Companies Chase Customers, Not Profit

Why are you in business? Is it only to maximize your profit? Companies that chase profits at the expense of serving customers are in for a rude awakening. Today’s customer is savvy about getting taken advantage of by companies that put their own interests first. Discount Tire could easily charge $20 to fix a flat. With six thousand opportunities to do that a day, the company might be leaving upwards of $40 million a year on the table. But that’s not the way to look at it. How many tires will Discount Tire sell those same people over a lifetime? Chase your customers and say yes.

Yes Companies Live Their Values

Like Larry Mills at Holt Cat told me, “Of course, you have to have values in order to live them.” Companies like Holt have revolutionized themselves and their industries by putting their values right up front for everyone to see. It’s a way to be willing to have a report card of your intent and performance. You won’t always get it right. Values are aspirational. But, Customer CEOs expect no less. They will reward you for your efforts because you are showing you are willing to be held accountable.

Yes Companies Let Their People Break the Rules

Nothing is more important to succeeding at the Power of Yes. The old saying, “Break the rules and ask permission later” wouldn’t be needed if companies just trusted their own people to do the right thing. Maybe you should just have fewer rules. But, if that’s not possible, encourage a culture of rule breaking whenever it benefits the customer. Guess what? Customers sometimes lie. But if you look at it as a cost of doing business, it will frustrate you a lot less and it will keep customers coming back. Imagine how many other people they will tell.

Yes Is Only One Letter More Than No

Maybe it’s easier to keep saying no because the word is so short. Becoming a yes company starts by simply practicing saying the word. Try it. You will find that your people and your customers will begin to think about your company in an entirely different light. The Customer CEO is waiting for you to start.

(How well does your organization engage the Power of Yes? Visit customerceopowercheck.com to download our free diagnostic tool.)