JIM PENMAN: A man on a Customer Service mission
When franchising Jim’s Mowing back in 1989, I had very little idea of what I was doing.
I had no system to check on work quality, no formal training, and no way to monitor vehicle or trailer signage. I badly wanted my franchises to be successful, and to give better service than my existing subcontractors, but few ideas on how to go about it. It was only gradually, over the next three decades, that we began to work out how this could be done.
One thing I did get right from the beginning was to only take on franchisees I was convinced would succeed, a bold policy when only a fraction of the size of my nearest competitor! That was not only because I wanted my customers to be looked after, but because I knew from past experience that contractors who gave poor service tended to fail. So, I made a point of sending all prospects out for a trial with people I trusted. Those who did not measure up were knocked back, and that was quite a few.
The next stage, sometime later, was to change the way we charged fees. I was frustrated that franchisees were taking leads but not following them up, leaving customers in the lurch. After a few experiments, we began a trial of charging a small fee for each lead provided, balanced by reducing the base fee. A customer survey found that this made a dramatic difference. Not only were franchisees charged lead fees far less likely to neglect clients, but we were picking up 50 per cent more work from the same number of leads! Franchisees stopped asking for work when they were busy, because they didn’t want to pay the lead fee. Instead, the leads went to franchisees who really wanted them. This then became our standard system.
Another change came as a result of me taking a turn answering phones in the call centre. Though taking only about 2 per cent of calls, I found myself recording 10 per cent of complaints. It was clear that other staff were taking a ‘generous’ view of complaints, only marking them as such when really serious. I began asking them to record ALL complaints as such unless obviously wrong, such as complaints about over-charging (which is not poor service in my view, since we encourage franchisees to quote on the high side).
The proper recording of complaints showed that we still had serious problems with customer service, even if it was much better than in pre-franchise days. So, I talked with my franchisors and we came up with the idea of asking the franchisor to phone a franchisee following each complaint, judge whether it was justified, and counsel them on how to avoid such problems in future.
The next step was to deal with the relatively small number of franchisees getting far more than their share of complaints. We set up a system of steadily more serious warning letters, up to and including a breach notice, retraining, and termination. Becoming more rigorous with time, this system had a dramatic impact. Even though we terminated relatively few people, most letters caused a swift change for the better. This became even more effective once we started surveying customers by email, with any sort of negative answer treated as a complaint.
About this time, we began a more formal training system, with all prospective franchisees brought to Melbourne for at least three days. I launched and still launch the first session by talking at length about customer service, both what we expect and the system behind it. I also made sure that the rest of the course carried on this theme. Not only did these courses lead to a clear drop in attrition over the first year, but they left franchisees in no doubt about our views on customer service.
I began to take a more personal and direct role in service issues, asking call centre staff to send to me any complaint where the customer had called a second time. I would follow up the complaint with the customer, franchisee and franchisor until it was resolved, if necessary paying the client out of a special fund and back-billing the franchisee. If the franchisee had left the system, we simply paid the cost from the fund. This also allowed me to counsel and discuss customer service problems with franchisee and franchisor. I also became directly involved with the warning letters being sent out, and set myself as the only person who could actually delete a complaint if wrong. Daily involvement strengthened my motivation and also to bring about changes to the system, such as asking franchisees to SMS a client if they could not get through on the phone (since people rarely listen to their voicemails).
All of these changes together led to a steady decline in complaints, which are now less than a third of what they were when we started recording them properly, and with an ongoing decline year by year. But this is still not good enough. More radical measures are needed.
About a year ago we began to ask clients to star-rate their service, making clear to franchisees that these and any client comments would be placed online. That way, customers would be able to check out ratings before booking the job (though unlike Hi-Pages and other systems, they could only book one person). This gives an extra incentive for good service, and also to fix problems with the service since clients could be asked to change their rating once this was done. And it helps clients to avoid the small minority of franchisees who give poor service but tend to take a lot of leads, because they don’t enjoy the referrals and ongoing regulars that most of our people get. This system has yet to be launched at the time of writing, but it works very well in another venture that we are developing.
Future plans include setting up franchisees with software that measures how quickly they respond to a lead, as well as giving cast-iron evidence when they have done the right thing (unfair complaints can be very demoralising). And we want to make it much easier for clients to respond to surveys, so that many more will reply.
Measures such as these sometimes cause discontent, over issues such as paying lead fees when jobs do not work out, or for what may be regarded as unfair complaints. But the effect on work coming through has been huge. Twenty years ago, most franchisors overspent their advertising budgets and we had canvassers knocking on doors to find work. These days, many franchisors cannot even spend the advertising levy and must give it back, or use it to pay costs such as trailer stickers. There is simply no point to advertising when almost all franchisees in the area are flat out. And the proportion of franchisees reporting good income has risen steadily.
In fact, unserviced leads have become a major and growing problem. Over the past twelve months alone we have knocked back more than 143,000 leads, and the number continues to rise. The number of our franchisees is growing steadily, and will likely pass 4,000 next year, but we simply cannot keep up with the public demand. There is a HUGE demand for prompt and reliable service, almost regardless of cost. We teach our franchisees not to compete on price, and yet surveys suggest that about 75 per cent of our leads turn into jobs.
Over-supply does not apply to all divisions in all areas, since in our system each division and each franchisor controls their own advertising, but it has become in itself a major issue of customer service. As a result, we are setting up a system where such leads can be sold to carefully vetted independent contractors, with money steered back into the system to get our people more work when they need it.
What is the lesson from our experience? That customer service matters more than anything. It is far more powerful than advertising, or social media, or the slickest PR campaign. Our aim must be to not only satisfy but delight our customers, to exceed their expectations, and that we must always strive to do better.
Poor service to customers upsets and offends me. Even one unhappy customer is one too many.
Jim Penman launched Jim’s Mowing with a $24 investment in 1982, franchising in 1989. He now has over 3,700 franchisees in four countries, the largest franchise chain in Australia. He is happily married, with three children still living at home.
His hobby and passion is scientific research into the epigenetics of social behavior, which he sees as having real potential for the treatment of depression, anxiety and drug addiction. His books, including Every Customer a Raving Fan can be downloaded without charge from his websites:
www.jims.net
www.biohistory.org.