Entrepreneur Life Lessons: Never Cheat Your Customers -- Ever

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Recently, the girlfriend and I went to a local cafe to grab a light snack before lunch. It was a sunny Saturday in Toronto, Canada, and we were enjoying some together time on the weekend.

We saw a quaint looking coffee shop -- The Grind Cafe -- in the underground at Toronto’s busiest intersection – Yonge and Bloor streets.

The gourmet tea selection won us over, and we each picked one to try, along with a puff pastry filled with cheese and other yummy stuff.

The cost for our light snack came to $11.42.

The barista behind the counter asked for $11.45.

With the elimination of one-cent from Canadian currency, the federal government has implemented guidelines for business owners in rounding to the next whole cent.

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According to their guidelines, $11.42 should be rounded down to $11.40 – NOT up to $11.45. Actually, it’s also basic elementary school math – round up for numbers ending in five or higher, and down for everything else.

“It’s only three cents,” protested the man behind the counter when we politely reminded him of his error.

Yes, it is only three lonely cents, however that’s not the point. You don’t reject your customer’s objection, you should politely answer it – even if you’re wrong – because picking a fight with a customer just isn’t good business.

We paid the extra three cents, though as we sat in the lovely cafe, sipping on our teas, the experience just wasn’t as cozy as we had hoped.

Great customer service makes people swoon, and want more – horrible customer service makes you want to head for the exit and never look back.

As we exited the cafe, we strolled past a Shopper’s Drug Mart – one of the largest chain of pharmacies in Canada, owned by the Weston Family (they own Loblaws grocery stores and the President’s Choice, and No Name labels of products).

We needed a few items we know we’d find there, so we went in.

“Do you need a bag for that?” the person behind the counter asked, as we were at the check out.

We did, which she proceeded to charge us five cents for.

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In 2009, the City of Toronto implemented a poorly executed by-law, requiring retailers to charge five cents for every plastic bag given to a customer. It was poorly implemented, because it wasn’t enforced, nor was it ever really clear where that nickel per bag was going.

The city claims it was being put into an environmental fund, to promote environmental practices and keep the city clean. However, as it was up to each retailer to manage the collection and distribution of the funds, most of those fees just went back into the pockets of greedy retailers looking to make a buck.

The original intent of the five cent fee was to reduce plastic bag use, in favor of reusable cloth bags.

In 2013, under Toronto Mayor Rob Ford, he killed the five cent per plastic fee, however, because it never was managed well, the city didn’t end the program well either, leaving it in the hands of greedy retailers.

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If the city really wanted to reduce or eliminate plastic bags from the city’s landfill, they should have banned them outright – which they eventually did – however the plastics industry sued and the city quietly cancelled their ban in 2013.

So, now wherever you go in Toronto – and even in the areas surrounding it – you never know if you the customer will get dinged an extra five cents for giving someone your business.

“Where does the five cents go?” I ask the kid behind the counter at the Shoppers Drug Mart.

“I dunno, probably somewhere good,” she says.

Yes, it probably lines the pockets of the executives running Canada’s largest pharmacy-retail chain.

Although charging for plastic bags does reduce their use – a City of Toronto report claims a 53 percent drop in 2012 over the three years since the five-cent fee was initiated – that’s a drop of 215 million plastic bags – the money collected for an environmental initiative shouldn’t be used as a revenue stream off the backs of customers.

Never lie to a customer, because if and when you get caught, you’ll never see that customer again. And worse, using a social cause (such as environmentalism) as a way to make money is the ultimate way to cheat your customer.

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This got us thinking about our earlier experience with the Grind Cafe. We figured, if that store wrongly rounds up it’s prices for everyone, then that three-cents quickly adds up, giving them an additional revenue stream. For every 20 customers wrongly rounded up, that’s about a dollar in profits. That adds up day-in, day-out.

However, again, you never want to cheat your customers, because that’s not a great way to keep them coming back.

Numerous studies prove it’s a lot easier to please and retain customers, than to pay for marketing and advertising to acquire new ones, some going so far to say it costs between four to ten percent more to acquire new costumers.

So you never want to do anything – anything – which could cost you a customer, especially cheat them out of their hard earned money, such as the examples used above.

There are great retailers that don’t round up – when they should round down – and that don’t nickel and dime their customers over a plastic bag. Or those that do charge for plastic bags honestly, inform and educate their staff as to where those funds are actually going, rather than “somewhere good,” which in business, just doesn’t cut it.

What’s the entrepreneurial lesson here?

Simple.

Be honest with your customers unless you want them to feel cheated, lied too, and that something just isn’t right.

Because once your customer feels that something just isn’t right, they stop being your customer. And you never want anyone once willing to pay for whatever you sell, to stop paying for what you sell – ever.

Isn’t Social Media Just Shameless Self-Promotion – YES IT IS – That’s Why You Need to Be Using It to Shamelessly Self-Promote Your Business

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We live in a very anti-social, social media world.

No, that’s not a typo – social media is anything BUT social.

Think about it – how many “friends” do you have on Twitter that you actually know? And by know, I’m not talking about sharing tweets.

Let’s put it this way, how many “friends” do you have on Twitter that you’d invite into your home for dinner? Not a coffee shop, not some sleazy bar, or worse – street corner – your own private residence.

Asking myself that same question, I currently have 4,376 followers on Twitter. Of those amazingly awesome folks following me, I’d guess I probably really only know a couple hundred, when you consider friends, family and business associates.

Of those 200 people, I really only know about 50 that I know well enough to invite into my own, personal, private, living space.

So, out of over 4,000 “friends” on Twitter, I really know about 50 of them. Do the math – I only really know 1.25 percent of my Twitter followers.

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According to statistics, that’s about right. Studies show the average Twitter user only really knows between one to two percent of those who follow them.

One to two percent – that means, on average, 98 to 99 percent of those happy smiling faces that follow you on Twitter are complete strangers.

Doesn’t sound all that social at all.

Twitter is just like walking down a busy street, yelling: “look at me.”

BINGO!

Social media is just shameless self-promotion, that’s why you need to be using it to shamelessly self-promote your business.

If everyone is using Twitter, facebook, YouTube, Google Plus, Vimeo, Pinterest, Instagram, even Linkedin to shamelessly promote themselves – then you need to be doing that too.

I know – that’s not very social. Walking down a busy street, yelling: “look at me” is hardly the behavior that’ll win you long lasting friends you can count on when you really need them.

But that’s the new world order, thanks to smart phones, tablets, free WiFi, and coffee shops filled with people, none of whom talk to each other -- even at the same table!

Talking?

That’s old school.

Besides, no one cares about you.

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They are too busy taking selfies to show off their new hat, tweeting about what they had for lunch, or posting a really nasty review about the waiter that kept putting his finger in everything he brought to the table.

No one cares about you.

They are busy shamelessly self-promoting their own self interest.

However, the smart social media entrepreneur knows that social media isn’t about making friends, fans and followers.

No.

It’s about doing something that gets you noticed by the most self-absorbed generation since – well okay – there never has been another generation so interested in themselves, that they will walk into on-coming traffic, because they were eyes-down, self-absorbed into their mobile device.

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You have to use social media as a business person to get into the eyeballs of your customers, so in their own self-interest, they share your posts with their friends. And their friends share it with their friends, and so on, and . . .

That’s the real power of social media in business.

Despite it being wrongly named “social” – it really should be called “self interested media” or “anti social media” or anything but social.

Social media is just shameless self-promotion, but that’s why you need to be using it to shamelessly self-promote your business.

Never Toss Anyone Under The Bus

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Years ago, when I worked in the corporate world, I remember sitting in on a project meeting that still to this day sends a cold chill down my spine.

My team was designing a new learning platform for one of the big automakers, and this was just one of our regular project meetings to update the client on our progress.

As we showed off our latest developments, one of the team leads for the client scoffed at one of the images used in the application.

Immediately – and probably without thinking – one of my team’s project leads said: “Oh, that’s what happens when designers use clip art, sometimes they just toss any ol’ thing in there – we’ll change that right away!”

The problem, that wasn’t clip art, it was a painstakingly hand-drawn graphic, by one of our top designers – who happened to be sitting in on this meeting -- and it was specifically requested and approved by the client months ago.

I saw the poor designer turn ghostly pale and sink into her chair.

She didn’t want to be in that room.

And after her silent tears turned into audible sobbing, neither did anyone else.

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I suggested we take a five-minute break, and you could almost see the vapour trails as most raced out of that room, leaving just me and the sobbing designer.

Luckily, I was able to turn things around, and I even managed to get her laughing and joking with me about the silliness of the situation.

However, my discussion later with the person who threw her under the bus was not so jovial.

He didn’t have anything personally against the graphic designer, he just did what unfortunately a lot of people still do in business – kiss the client’s butt.

My problem with people that think butt-kissing is the best way to build and foster client relations, is that they won’t hesitate for a second to blame themselves, or a member of the team to satisfy a client’s complaint – no matter how ridiculous – as in this situation, where the offending art was actually requested and already approved by the client.

Never throw anyone on your team under the bus.

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Blame doesn’t get you any further in business – or anything else in life.

All blame does is create unnecessary frustration and anger with those the blame is directed at. Hardly an efficient or effective way to solve a problem.

That’s what the team lead should have done – suggest a solution to the problem.

As a team lead, he should have known that the artwork in question was already signed-off by the client.

He should have NEVER blamed anyone on any team.

I’m just glad he didn’t blame our client for approving artwork they didn’t like – that would have been a bigger fire to put out.

Never throw anyone on your team, or anyone’s team, under the bus.

I have never seen a personal or professional problem resolved by blame.

Blame is just a way to pass the buck. It shifts the attention away from working towards a solution, by pointing a finger at someone, and saying: “this is your fault!”

Blame is a huge problem in offices around the world. It creates hostile workplaces, where no one wants to be, because you never know if one day, you’ll be the one taking the blame.

Don’t blame people on your team, in your office, or in your company for anything ever.

Blame is bad for those you blame.

Blame is bad for those who blame you.

Blame is bad for the entire corporate culture, as it creates an environment of fear and angst.

Blame is bad – period.

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Next time you feel the urge to blame someone, go punch a pillow, to relieve the stress, and then work out a solution that does not assign blame.

Because any solution that blames someone else isn’t a solution, it’s just another way of saying: “not my problem.”

As part of the team, every problem is yours – that’s the whole point of being on a team.

But that’s another rant, for another day.

Having Trouble Keeping Customers? Maybe You’re Not Giving Them What You’re Selling Them

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Computer programmers know all too well what “vapourware” is.

Vapourware, is when the sales guys get so caught up in the sale, they tell a potential customer that your software product does “X” – when in fact, it doesn’t.

“X” is something that particular customer has always wanted done.

So, naturally, they buy.

Next day, the head programmer is freaking out, because he’s been told to make the software product do “X” within an unreasonably short amount of time.

Because software development usually takes more time than less, the sales guys keep stalling the new customer, to buy time for the developers to create the feature which never existed in the first place.

Hence the term, “vapourware” because the software to do “X” never existed before – but was sold as if it was.

Vapourware occurs in all industries and sectors, not just ones based on software.

Anytime a company makes a claim about their products or services which is NOT true – that’s a form of vapourware.

For the company, it’s a seemingly great way to steal customers from the competition.

Internet Service Providers are a great example of this – each one promises faster, more reliable service than their competition.

The second they have a disruption in their service, which causes a massive slowdown or shutdown, all those customers that were falsely promised faster, more reliable service, call to complain.

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It’s why so many of us have jumped back and forth from one Internet Service Provider to another, and even back again.

Why?

There is a misconception in business, that constantly bringing in new customers sustains a business. This misconception starts at the top, and flows down throughout all levels of a business.

When this misconception reaches the marketing and sales teams, they figure they can say or do anything to convince a potential customer to become a new customer, because it's the new customers which sustain the business.

Why is that a misconception?

Here are the latest stats from some of the business world’s best sources:

1.     A customer is four times more likely to defect to a competitor if the problem is service-related than price- or product-related – Bain & Company.

2.     The probability of selling to an existing customer is 60% to 70%. The probability of selling to a new prospect is 5% to 20% -- Marketing Metrics.

3.     For every customer complaint there are 26 other unhappy customers who have remained silent – Lee Resource.

4.     96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1Financial Training services.

5.     A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs.

6.     70% of buying experiences are based on how the customer feels they are being treated – McKinsey.

7.     55% of customers would pay extra to guarantee a better service – Defaqto research.

8.     It takes 12 positive experiences to make up for one unresolved negative experience –“Understanding Customers” by Ruby Newell-Legner.

9.     A 5% reduction in the customer defection rate can increase profits by 5% to 95% – Bain & Company.

10.  It costs 6 to 7 times more to acquire a new customer than to retain an existing one – Bain & Company.

So what can we learn from this?

Constantly bringing in new customers is important to any business, however, it is far more important to take care of your current customers, because keeping them happy is what drives your business.

What’s all this have to do with “vapourware” and selling products and services that don’t exist?

It’s the broken promises we make to our customers which cause the biggest headaches, and lead to the highest customer turn-over.

Sell your customers on the Sun, the Moon and everything in between, but if you can’t deliver that, then when they find out – and they always find out – that customer will drop you like a hot potato.

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Leaving you with one less customer – or a hundred, or a thousand, or even a million fewer customers – because the more you promise but don’t deliver, the quicker your customers will come and go.

Like a revolving door of customers.

Consider this, there is a high end coffee shop in one of the poorest parts of Toronto. They sell exceptional coffees, lattes, teas, fancy drinks and gourmet baked goods, at high-end prices. They provide up-scale service too – if you get anything from them that’s not just right, they’ll immediately take it back and replace it free, without any questions. Your satisfaction is their top priority.

Yet, this high end coffee shop, is in one of the poorest areas Toronto.

How do they stay in business?

The people in the area can’t afford a $5 cup of coffee every day.

The answer – they have regular, repeat customers. The coffee shop has been in business over twenty years, and over that time, has built a large following of people that will come from all over the city, to munch on a $4 cookie, while sipping a $5 hot caffeinated beverage.

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Years ago, the area was more prosperous, and those living there were well to do. As the neighborhood changed, the wealthy customers left the neighborhood.

Had this coffee shop relied on attracting new customers to sustain itself, it would have gone out of business a long time ago. However, they've constantly delivered what they promised – exceptional foods, drinks and service.

So their customers keep coming back. Despite no longer living or working in the area.

Do you tell your customers one thing, but deliver another?

Do you have issues retaining customers?

Perhaps you should look at your products and services, to make sure they deliver what you are telling your customers they deliver.

Because it’s easier to keep current customers, rather than replace them with new ones.

Want to Run a Successful Business? Be There for Your Customers

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Just this weekend, the girlfriend and I were discussing where we wanted to go for dinner. We had a pleasant day out and about, and wanted to close it out with a nice big meal.

Problem – it was about 10:30pm.

I figured we could go to a local bar – part of a chain of bars – and grab a nice meal. Bars are open late, especially on a Saturday night. It’s date night – Saturday night.

I called the bar to double check.

“Sorry, the kitchen is already closing, but we’re open for another hour,” said the voice on the phone.

What? Closing before last call? Last call here is not until 1:30am.

We called around to a bunch of places, bars, restaurants – most were already closed, or closing.

Finally, we ended up going to Pizza Hut. Pizza places are always open.

Not the most romantic dinner for two, but still a very enjoyable experience. Good food, prompt service, and they were there when we needed them.

Perhaps it is the never-ending recession we’ve been in, but I remember a time when restaurants and bars were open late on Friday and Saturday nights, because those were the night's people went out.

All the places we called previously lost our business, simply because they weren’t open.

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Want to run a successful business, here’s a tip – be there for your customers.

It’s not rocket science, just be there when your customers are most likely to be looking for you.

This goes for ALL companies, big and small alike. You don’t have to be on call 24-seven, just be there when your customers are most likely to be.

That’s it.

Nothing complex.

No fancy, deep thinking, mind blowing strategy.

Just be open for business when your customers are in need of your services.

You’d think bars, restaurants and clubs would be open until the wee hours of the morning on Friday and Saturday nights.

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When I was a kid in university, Thursday night was bar night – and nothing ever closed until last call.

I'd like to think I'm not THAT old, and times haven't changed that much that people don't go out anymore.

And it's not like we were in a third-world country, or living in the back woods of a small town either.

My girlfriend and I were shocked and bewildered by the lack of places to grab a nice meal and some drinks in one of the largest and most cosmopolitan cities of the world – Toronto.

Toronto, is like New York -- only smaller, cleaner and safer. 

No, it wasn’t busy in the Pizza Hut. But it wasn’t deathly quiet either – there were a couple of young families with their kids, some teenagers, and us.

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When you’re in business, any business is good business.

So it pays to be there for your customers.

Sure, have a skeleton staff, close off a section, or even tell customers that you might take a little longer to get something done, because it’s late.

That’s fine – we’ll understand.

Just don’t leave us stranded with nowhere to go.

That’s far worse customer service than not being there at all.

Because if you want to run a successful business, you have to be there for your customers.

Fear That Someone Will Steal Your Business Idea Actually Leading Cause to Start-Up Failure

I enjoy helping entrepreneurs of all stripes.

It's something I really excel at, and I learn so much from the experience.

However, it's really hard -- if not impossible -- to help someone fearful that their next big thing will be copied or stolen before they get it off the ground.

Rookie entrepreneurs stumble upon their one great, awesome, Earth-shattering business idea, and spend so much time cloaking it under a veil of secrecy I sometimes wonder if they have spent any time actually building their business.

Because it's hard to work under a veil of secrecy, constantly looking over your shoulder, worrying you are being followed, or worse, that your phones are 'bugged' and Big Brother is watching.

Okay, maybe I'm exaggerating just a tad.

But if you can't tell me what you're working on, I can't help you.

And if you can't tell me what you are working on, you probably won't tell potential customers either -- so you'll never get the feedback you need from them to validate your business idea, and prove it to be a viable and sustainable business.

Validation of a business idea is really important, without it, you'll never know if all the sweat, blood and tears you're putting into your business will actually pay off.

And there's lots of ways to validate a business, the quickest and easiest is just to talk to potential customers. Find out if they are willing to pay for your product or service, and if they are, how much they are willing to spend.

Validation also comes from fellow entrepreneurs, that help each other.

Not just in winning us over with your idea, but in learning how to overcome your challenges as you grow your business.

Real entrepreneurs help each other. They reach out to each other, offer guidance, advice, even a shoulder to cry on in some cases.

It's sort of the unwritten rule of entrepreneurship -- to help your fellow business pioneers. 

When I meetup with rookie entrepreneurs, that tell me they are struggling with a problem, and I offer to help, their eyes light up like the Sun breaking through the storm clouds.

As they explain their challenge, they stumble to explain their problem, using vague language, or simply leaving out important parts of the problem, as they fear I'm "fishing" for my next big thing.

Relax newbie.

No one is going to steal your idea.

Why would I even attempt to do something when you've already put in the initial legwork? I'd have to start from scratch, and that's just too time consuming -- not too mention I'd be well behind you, that already has a lot more work in the game.

Fear that someone will steal your business idea is one of the leading causes of start-up failure, because no one can help you, if you can't explain to someone what it is you are doing.

So put your fear behind you. You'll have a better chance of communicating your problems to those that can really help you, and you're business will have a far better chance of success because of it.

Life Lessons from an Entrepreneur: Can American Retailer Target Be Saved?

Today giant Wal-Mart competitor Target is expected to release their first quarter results – and they aren’t expected to be all that great.

The American retail chain’s sales are down across the board, and they are even worse since they opened about 100 stores across Canada.

Their new Canadian customers have been complaining that their prices are substantially higher in Canada, and they lack the selection that you’d find in their American stores.

Yesterday, they fired their Canadian CEO, replacing him with an American, because their Canadian operations have posted a loss of $941 million in their first year, resulting in a drop of $1.13 per share.

This isn’t about Canadian versus American leadership, which appears to be how Target is handling it.

What it boils down to is a simple life lesson any entrepreneur needs to learn, if they are to run a successful business: listen to your customers.

Always listen to your customers.

If your customers are complaining about high prices and lack of selection – as is the case with Target’s Canadian customers – do something about it.

Although rotating the leadership deck will appease stock holders in the short-run, because it appears to them that action is being taken to resolve the problem, that’s more of a perceptive change than a practical one.

Perception is everything in business. Tell any shareholder their stock just tanked, and the first thing they want to do is find out who’s to blame, and have that person sacked.

That’s the perceptive change which Target has enacted – they fired their Canadian CEO, and appointed a bunch of American executives to the Canadian team to make it look like this new team can turn things around.

But that’s not the practical action, because it fails to address the real problem.

What’s the real problem?

Just ask Target’s customers.

They are the one’s NOT going into the stores and NOT spending money.

Target’s customers have complained loud and clear that they don’t like the higher prices and lack of selection when compared to the American stores of the same name.

So the practical solution is to lower prices and increase selection in the Canadian stores, to be more similar to the Target stores which Canadians have visited in the States.

That doesn’t take a leadership change, anyone can do that. It just takes common sense – listen to your customers. Give them what they want. Make them happy.

Within Reason of course – if your customers are telling you to jump off a cliff, don’t listen to them.

However, when your customers are complaining about something that is realistic, and even makes sense – do it.

Like when your customers complain that your American stores have better prices and selection than your Canadian ones.

That’s an easy fix.

Will Target’s new leaders make it?

Or will they try to cover it up with slick advertisements that don’t solve the problem?

One of the biggest mistakes big companies make is not admitting their mistakes.

Another American retailer, JCPenney changed that. In 2012, their new executive decided to eliminate all sales, and make all prices even, instead of end with their traditional 99 cents.

Customers complained they missed the sales, and thought prices went up, because they were no longer just under the next dollar.

JCPenney listened to their customers. They admitted their mistake, fired the CEO that made those changes, and brought back their sales and their traditional pricing model, ending in 99 cents.

It wasn’t rocket science – it never really is. You don’t need some young MBA graduate to spend months creating reports to tell you what the problem is. You just have to listen to and act on your customers concerns.

Target can learn a lot from JCPenney.

The Better You Treat Your Customers, the Bigger Your Business Will Be

80’s rocker Pat Benatar was onto something when she sang the song “Treat Me Right,” because that’s how you grow your business.

Benatar was referring to how her guy treated her, but the same can be said for any relationship, especially business.

Canadians are a funny bunch. When we don’t get treated well, we get very quiet, and at the first opportunity, dart towards the exit to escape the situation. Americans on the other hand, will make a mega-stink, yelling, screaming, threatening, until they get a discount, or some other perk from the freaked out store staff, hoping the hot head will just leave them alone.

That’s according to numerous studies where Canadian and American reactions to poor customer service have been studied.

Canadians, leave, never to go back again. Americans, yell and scream.

However, there was one common thread between both Canadian and Americans that received bad customer service. Both told everyone they knew about it.

Be it Canadians, crying about it to their friends for support, or Americans, complaining about their experience with their family, regardless of which side of North America you’re on, if you piss off a customer, everyone will hear about it.

Because of the Internet and social media, news travels faster than ever before. And bad news seems to travel the fastest, because none of us wants to go through the same bad experiences as someone else.

So, bad customer service can really harm your business.

But if you want to grow your business, having exceptional customer service will do just that. Your customers will turn into repeat customers, because people want to experience good service again.

Even more importantly, thanks to social media, the better the experience, the more likely you’ll get exceptional mentions on the social networks.

From positive posts on Facebook, excellent reviews on Yelp, and loads of great pics on Instagram – social media has changed the way we respond to good and bad customer service.

I was thinking of going for a burger a while back, and wanted to check out one of those new gourmet burger joints. I checked online for reviews, and found several good ones. However, one bad review went so far as to mention how the person handling the raw beef to make the burgers did not wash his hands when they served customers.

So, I decided although the other reviews were good, I didn’t want to get food poisoning, so I went someplace else for dinner that night. I have never been to that restaurant, and may never go, simply because of that one bad review.

When strangers on social networks can influence purchasing decisions, you’d better make sure your company has the best service par none.

Otherwise, you could be losing customers you never even knew you were losing – thanks to our always on, social media world.

Always strive to provide the best service possible. And when things go wrong, as they often do, do whatever is humanly possible to make it right.

I’ve gone places where my friends said they had nasty things happen, because the staff corrected the problem right away.

No one is perfect, so mistakes happen.

Fix them!

Your customers will be happy, and will share your good deeds with their friends, and that will grow your business.