Chantal: A very warm welcome to our special guest for today. Katie, welcome and thank you for coming on the show today.
Katie: Thank you for having me.
Chantal: Now I had the great pleasure of hearing you speak at the Motionsoft Technology Summit 2018. You were on a panel talking about data innovations in the fitness industry and I was completely blown away by just how articulate and well-spoken and knowledgeable you were. So I want to thank you so much for coming on and sharing your expertise with all of us here today.
Katie: Oh my gosh. Thank you. That is so nice. I had such a nice time at the tech summit and was really just fortunate to be included. It’s a pleasure to be here and I really appreciate the opportunity.
Chantal: Well, Katie, I thought that it was important before we talk about our main topic, which is of course, five myths of customer service, I think we should first set the scene and tell everyone why it is that we’re talking about this topic. So, do you want to explains to us just ab it of an overview about Listen360?
Katie: I’d be happy to. Yes, so I am the Senior Business Manager for the health and fitness industry at Listen360. And Listen 260 is the leading provider of member feedback in the health and fitness community. We’ve got 5,000 clubs and studios currently using our member feedback process. In order to consistently gather feedback from members. To really evaluate how the member experience is chancing through time, what members’ perception of the overall experience is, and certainly to be able to easily diagnose and respond to member issues in order to retrain as many folks as possible in the long term.
Chantal: Well, I think it clear now what it is that we’re talking about customer service today. I came across this fantastic article on your website and it was called The Five Myths of Customer Service. So, to start our interview today, can you walk us through what those five myths are?
Katie: Absolutely. So, the five myths that we’ll be focusing on today are. First of all that a satisfied member is a loyal member. That the fewer complaints your business has, the better off you are. That your company’s commitment to service will get the attention of your members. That new sales are more important than the member experience. And that investing in marketing and advertising is more important than investing in training.
Chantal: Okay. Let’s now break down each of those, because I know there’s going to be a lot of good stuff for us to talk about. So let’s go from the first one. Talk to us a little bit more about that one.
Katie: You got it. So the first myth is that a satisfied member is a loyal member. And I love to talk about this distinction. This is so central to our philosophy and belief at Listen360 around how best to serve members. A satisfied member is basically status quo. They’re coasting. They’re fine. Their basic needs are met, but they are not a raving fan of your business. And they will be very easily swayed by competition and specifically when it comes to getting a deal or getting a price break with another business.
So what’s most important is to generate loyalty among your members, and loyal members spend more money with you, they bring their friends. They sing your praises at every possible opportunity to help you drive growth. And they are willing to put their own reputation on the line to help refer or recommend your business. So you can hear that loyalty really, really serves your business and your brand, long-term, as opposed to just kind of meeting kind of the basic needs of members, hoping that they stick with you. So, there’s a big distinction here and it really comes down to understanding what really gets at the emotional heart of that member experience and that connection that you have with each individual.
And why somebody is motivate to stay with you. Obviously you can’t know this without asking. And that’s something that we really encourage, is just to consistently inquire about the member experience to get to the heart of why someone is with you and what is motivating them to stay.
Chantal: Katie, can you show with this any examples of the methods we could use or the things that we could do to transition someone from being a satisfied member to being a loyal member or a raving fan of our business?
Katie: Yes, absolutely. And I think this first starts with really defining your brand promise and the ideals that you hold for your own brand. When you wake up in the morning and you go to work and your teams comes in for the day, what is it that you hope to impart on your members? What experience do you hope to provide them? That’s kind of the first step in order to start to work on this loyalty. And then it’s consistently measuring your members’ understanding of your brand promise. Do they agree that you’re delivering that super clear, state of the art, family friendly whatever it may be, whatever goals you have for your brand. Do your members agree that you’re delivering that? And consistently asking the question to really start to understand.
Every brand will have individual items that they take away from this, certainly, that they can implement, but I think the first thing is defining it for yourself and for your team. Inspiring you team to represent that brand and then consistently evaluating whether or not your members also perceive that you’re living up to that brand promise.
Chantal: Thank you for diving into that for us, Katie. So that’s number one, a satisfied customer is a loyal customer. Number two is the fewer the complaints, the better. I find this one very intriguing. Break this one down for us.
Katie: Yes. So it is intriguing because obviously none of us like to hear complaints and many times when we don’t hear them, we think things are going really well. What we have found is that up to 90% of your dissatisfied members will not voice their complaints. They will just disappear one day. And these are those satisfied members or in many cases dissatisfied. Both of them. So we really want to consistently go for the complaint. In sales we have an expression called go of no. And I think this applies in literally every sales context or any business context.
You want to prompt for a deeper understanding of the member experience especially when it’s negative. If you have a sense for why somebody may even be slightly unhappy with their experience with you, it doesn’t have to be this huge negative experience, even something that’s even slightly bothersome, you have an opportunity to course correct, to address it, and ultimately to retain more members. If you don’t know that somebody’s at risk of leaving, you can’t save them.
So we always like to refute this idea that if you’re not having any complaints, that everything’s great. You want complaints. Complaints are an opportunity to consistently evaluate and improve the member experience across the board.
Chantal: You think that there are ways within our business that we can, I guess, I’m trying to think of the right word, but I guess nurture our customers in a way or build relationships with our customer and our clientele in a way that they feel comfortable to give that sort of feedback?
Katie: Yeah, I think beyond asking for it, creating a culture around really wanting to understand is central. Just like you’re alluding. And I think that the presence of an owner and an operator or even just the team within the business consistently being present, asking, “is there anything we can do to make your workout better today.” Having an energy of wanting to improve and an expectation to members that the staff is there to improve their overall experience. And those doesn’t necessarily mean bowing down to all requests. I know, sometimes you get requests and feedback that’s really not something you can do anything about. That’s very common. But just to consistently be present and available for members. And really just to kind of develop a culture around deepening that member connection and that member relationship.
Chantal: There’s a fantastic book, one of my favourites that I recommend to a lot of people it’s by the author Jay Baer. I don’t know if you’ve read it before. It’s called “Hug Your Haters.” Have you heard of this book before?
Katie: I’ve not heard of it.
Chantal: It’s a fabulous book and we had Jay on the show in episode 75, and the book basically helps you understand how to handle and respond to customer complaints that are both online and offline. It’s got some really good strategic ways to actually deal with it, because I know that this is an area that a lot of people, they’re challenging to really answer when people leave feedback or give constructive feedback or give complaints. So if anyone is interested, that is a fabulous book. “Hug Your Haters” by Jay Baer. I’ll put the link into today’s show notes.
So, we covered off myths number one and two. Let’s move on to number three. A company’s commitment to service will get the attention of customers. Talk us through this one.
Katie: Absolutely. So this really comes down to whether or not members perceive, understand, and buy into your brand promise. You, as a business, can really have as many ideas and goals as you’d like around the service that you want to provide. And this comes back to what I was saying earlier. It’s so important to test that. To really determine what’s important to you and what’s important about service that you put forth in the world. But, defining that and really, I guess it’s a difference between defining it and your members perceiving it. And it’s very, very common for companies to say, “okay, here’s our core value. Here’s what we do.”
And they kind of assume that members get that. That they feel that and they’re all on board. It’s super common for businesses to behave this way. And what we have found I our research is that many times, members do not perceive that brand promise. And they have a totally different experience with what’s happening. In fact, there was a study done by a consulting firm called Bain and Company where they determined that with the businesses they were consulting with, I believe it was about 360 businesses at the time. They did a little study. They asked the companies that they were working with, “do you believe that you provide a superior customer experience?”
80% of the businesses that were surveyed said, “yes, we absolutely provide a superior experience every day across the board.” When the consulting firm interviewed the customers of those different businesses, only 8% agreed that they received a superior experience. So this is a significant delivery gap. It’s very common. And I really comes down to, not only defining who you are and the service you want to provide, but understanding, from your members’ point of view, is that happening. And the only way to do that is to ask them for feedback.
Chantal: So, Katie, the net promoter score is something we’ve spoken about on the show previously. But I always think it’s important to just do a quick recap, a quick reflect on how it’s actually calculated. So anyone that’s perhaps listening to the show for the first time, or anyone that’s not familiar with net promoter score, can get a really thorough understanding of what it is. So can you explain to us exactly what is the net promoter score and how is it calculated?
Katie: Yes. We use at Listen360 a methodology called The Net Promoter Methodology. And this is not unique to Listen360. This is a methodology used by hundreds of thousands of businesses. It was developed back in the 90s by the consulting firm I just mentioned, Bain and Company. It’s very, very easy to implement and it really helps get straight to the heart or member loyalty. And it’s very simple.
You ask the question, “on a scale of 0 to 10, how likely would you be to recommend our business to a friend.” And this question, not only allows you to ascertain how somebody’s doing, if they’re willing to recommend you or not and why, but you’re also able to calculate what’s known as the net promoter score. Which is a direct reflection of your overall level of member loyalty. So you can do this with a comment card. You can do this with a paper survey, with an online form. You can really implement this instantaneously in your business today. And it allows you to really take the next step when it comes to gathering feedback and to really start measuring loyalty as it relates to the service that you hope to provide.
Chantal: Thank you so much for explaining that so thoroughly, Katie. So we’ve covered off the first three. Let’s move into number four now, and myth number four is that new sales are more important than customer service. Talk us through this one.
Katie: Sure. This sounds fairly obvious. I think when I read these myths, this is the one that stands out to me and says, like, oh, no, I know that customer service is important. But I really comes down to living this truth that new sales are not more important than customer service. That it’s absolutely essential to provide service for your existing members. And I know I’m preaching to the choir with [inaudible 00:13:18] when it comes to retention. Retention is obviously a focus of really every fitness business. I’ve never met a fitness owner/operator who is not focused on this. But it does cost 5 to 25 times more to attract a new member than it does to retain an existing one.
I think when I speak about this topic, I like to point out the difference between what we call good profits and bad profits. And this topic is central to the net promoter methodology as well. Money is money, whether it comes from a happy member, somebody who absolutely loves you, or somebody who’s very frustrated with their experience. A dollar’s green no matter where it comes from. But when you’re looking at your profitability and the that you’re making money, there’s a huge difference when it comes to loyalty between good and bad profits.
The best example that I can give of a bad profit, the really just I think cuts straight to the heart of everybody who I speak of all this to, is the baggage fee imposed by airlines. Who years ago, all of a sudden, there’ a $25 fee to bring your suitcase onboard, which was never imposed before. That $25 is as good as $25 coming out of a flight or any other profit generation process, but it severely impacted and degraded the relationship between the airlines and their clients. It was bad profitability. It caused a negative example and it was just kind of a grating topic.
So I always like to point this out. When we talk about good profits versus bad profits and the importance of retaining members and attracting new members, this is something to keep in mind. So when you’re looking to make, maybe impose a new fee, or have some new kind of profit generation process within your club, keep this in mind. Because your active members are keeping your business afloat. Degrading that loyalty with a new fee can cost much more in the long term than you’ll make in the short term with something that would be in our world considered a bad profit.
Chantal: Katie, I actually had a fist hand experience and you talking about that baggage fee just brought it up to the front of my mind. A few years ago, I used to work for a gym facility, and had a lot of long term members, people that were very loyal to the brand. And the facility decided to increase the charge for towel hire from $1 to $4. Now it seems like a really, it doesn’t seem like a big amount, but the impact that it had on the long term members of the business was so detrimental. Because they were just beside themselves that there was such a massive hike on the towel fee. Is that a good example of what you’re talking about?
Katie: Oh, it’s a fantastic example. And another example that I like to share, we have a client that, it’s a franchise brand and they do shipments and it’s kind of like a mail franchise. They help you ship and pack and send and receive different packages. And one tiny, tiny portion of their service was selling stamp that they were marking up significantly. And in their feedback, overwhelmingly, people are like, why do you charge as much for stamps. I don’t understand it. This is like three time what I would pay at the post office. It degraded trust.
People felt like, okay, if this stamp is so overpriced, what else if overpriced? And I think it comes back to your example, too. Why is this towel fee going up so much? What is this implying? It just comes down to that relationship and the importance of maintaining and honouring that relationship with your existing members.
Chantal: I love that one. Thank you for talking us through that, Katie. Okay. We’re on to number five already. Invest more in marketing and advertising than in training or customer service. Tell us a little bit more about this one.
Katie: You got it. So, the loyalty of your frontline staff is the number one biggest driver of member loyalty. Hands down, across that board, if our team members believe in your brand, they represent your brand, and they are passionate about the service that they provide, that will directly translate to loyalty within your member base. And this is so, so important. So I always love to talk about the importance of training. Training your team and making your team feel like a family will do wonders for your bottom line.
You will develop a loyal employee base. You will develop a loyal member base. And that loyal member base will directly drive growth and profit for your business. So super important to drive new sales, of course. We all need that. But investing in your training teams and really developing that sense of community will help you guys so much in the long term when it comes to driving that loyalty. And to get people fired up about your brand long after they may leave. They may move away. They may join another gym, but loyalty lasts forever. And they will still remember the good experience they have. They may refer a friend who’s new to the area. They may continue to get your communications and to post on social if there’s something that appeals to them.
It can really translate for such a long time if your member base is loyal and that really starts with the front line team that greets them when they walk into the facility every day.
Chantal: Katie, for the people that are listening at the moment that are perhaps feeling that some of those myths that we’ve just taken them through are feeling a little bit familiar. And they’re starting to wonder whether or not their own business is operating within those myths. And we’ve touched on this through our chat today, what is the best way to tell if our business is operating within those myths that we’ve just touched on?
Katie: The best way to tell if you’re operating within some of these myths is if your guessing. If you’re guessing with new operational processes, improvements, where to spend your time and energy and resources, what your members what to see from you. If you’re speculating about those items, you may be falling into these categories. And that’s okay. This is not uncommon, but it can be such a game changer to identify that you may be falling into these categories.
And I would really recommend that you simply begin communicating with your members in a new way if you’re not already. The best recommendation that I have is to start that dialogue. Ask for feedback. Seek out those complaints. Track and measure your member experience from the point of view of your members to really start to chip away at some of these bad habits and to really inform the decisions and processes that you put in place in your business.
Chantal: Katie, we’re going to finish off today with our Fitbizperation. Can you share with us three ways that we can improve the customer satisfaction within our business?
Katie: Absolutely. And I love that you ask the question that way. I will answer a little bit differently. I’ll share with you the three ways to improve your member loyalty across the board. Instead of satisfaction, that’s a big shift that we talked about early on. I think the best ways to improve your member loyalty. Really start out, this is kind of a recap of the conversation we’ve had. First of all, defining your brand promise. Identifying the business that you want to run, that you want to get up and work at and run and represent every day.
Then to invest in your team. And invest in creating a sense of community within your staff and really instilling within them a culture of understanding your brand promise and of representing it within your member base in your facilities every single day.
And third, again, ask your members for feedback and be willing to course correct. I know it can be very, a lot of our clients have a hard time starting this process. If you’re not gathering feedback, it can be intimidating to start, but you will always have more positive feedback that negative and when you get negative feedback, try to think of it as a gift. Because there you have an opportunity to pivot, to adjust, to retain somebody before they leave. And to really better your business from the ground up, from the point of view of your most important constituency, the folks that keep the lights on every day, your loyal member base.
So define your brand promise, invest in your staff, and ask your members for feedback consistently.
Chantal: Katie, they are three great tips to finish off on today. I want to thank you so much for joining us. This has been such a great conversation around those five myths of customer service. I think you’ve given us some great insights into what we need to do and having a look at our business. So if anyone wants to get in touch with you or if they want to find out more about Listen360, where’s the best place for them to go?
Katie: Oh absolutely, we’d love to chat. Again, my name is Katie Bossie, and I am the Senior Business Manager for Health and Fitness. So if you’d like to chat with me, you can email me at [email protected] K-A-T-I-E B-O-S-S-I-E. You can also visit listen360.com to learn more about our service.
Chantal: Nice and easy to remember. And everyone, I’m going to put Katie’s email address, I’m going to put the Listen360 website, I’m also going to put a link to that article on their website around five myths of customer service, so Katie, thank you so much for joining us on The Fitness Business podcast today.
Katie: It was such an honour. Thank you for having me.
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