Building Loyalty Through Quality

Sometimes we try to save a buck or two that ultimately may just cost us more in the long run.  

It was the Sunday after the NFL Championship game, and I woke up that morning craving some barbecue. So, for lunch, I went to a familiar barbecue joint and ordered a pulled pork sandwich to go.  The aroma filled my car ride home – love that aroma – wish I had that scent on one of those hanging car odor eliminators.  I love BBQ.  

When I got home and opened the container, although it smelled terrific, something was amiss. I took the top bun off and looked at the pork. The pork was flat dry, and it didn’t look good. I added some barbecue sauce with the hopes of reviving the sandwich. However, when I took a bite, I realized that the bun was stale, and the BBQ sauce didn’t restore the sandwich.  I was sorely disappointed in this pulled pork sandwich and wondered what went wrong.  Then it dawned on me. The restaurant is closed on Mondays.  

Being Greek American, I have worked in several restaurants since the age of 12. Side note: when I graduated college, I thought I would be in the restaurant business for the rest of my life!   Back to the story – I completely understand the relevance of food costs. Restaurants are in a business where the product needs to be sold at a price that will cover the food costs and a portion of administrative costs. That’s the only way to turn a profit. It’s that simple. 

In this case, however, the pork and the bun were both from the previous day – old meat and a stale bun. The restaurant may have helped to control their food costs by doing this, but they created an unhappy customer in the process… a customer who is now most unlikely to make a return visit, and, will share the story with others! Saving a few pennies is not worth losing a customer. In this era of social media, bad reviews, pictures of the disappointing meal, and word of mouth can significantly impact your business.  

In the long run, the person preparing the sandwich should have asked themselves, “Would I eat this sandwich knowing that the quality was not up to standard?”  The answer should be no. However, the company policy might be to first use up yesterday’s food before using what is freshly prepared for that day. That type of policy is not a sustainable strategy. 

We all make mistakes. I get it, and I’m very empathetic to everyone in the restaurant business, especially during this pandemic. And, we must always watch our costs in order make a profit, but revenue drives that profit. If we don’t get return business, we lose revenue, and the business loses sustainability and growth. Period.

However, there seems to be a new way of controlling food costs: shrinkflation.  Using less food to help control food costs. There is a national sub shop chain that has been using this strategy. I ordered a turkey sub with provolone cheese, lettuce, tomatoes, jalapeno peppers, and mustard. What showed up was a sub roll with very little of the ingredients requested.  I have stopped ordering from this chain.  

Now, take this scenario into every business and apply the same analogy. I’ll use the professional speaking business as an example. As I do, think about your business. Have you ever attended a conference or seminar that feels like a canned presentation?  Or better yet, you attend a conference and recognize one of the speakers you enjoyed five years ago. You look at the title of the presentation, and it doesn’t sound like the presentation before. You decide to sit in their presentation, only to realize it is the same presentation that the speaker did five years ago, word for word— it just has a different title. Yesterday’s leftover food – old meat and a stale bun.   As a professional speaker, I customize my presentation to each audience and never do the same presentation twice.  Yes, this takes a lot of work –  and it has been a key driver in the success of my business for 12 years.  I will never serve leftovers to my audience or client. It’s simply not a good business plan or practice.  

The many years I spent in the restaurant business taught me a lot about customer service that I use in my business today.  We all need to remember that we are in the people business. We have no business when we don’t treat our people and customers with the respect they deserve and provide them with a consistent, reliable, and top-quality product or service.  Period

BTW- If you are ever in Bloomington, MN, you must go to Ciao Bella. Ciao Bella understands this philosophy, provides the best customer service, and backs it with a quality product. If you happen to go, ask for Sue, and tell her that I sent you. 

Contact me at peter@petermargaritis.com if you would like to discuss how to increase your customer loyalty.

S5E14: Fresh Approach Beats Out Cost Control

We are in the people business and we need to treat our people and customers with the respect that they deserve.” Peter Margaritis

Saving a few pennies is not worth losing a customer. In this era of social media, bad reviews, pictures of disappointing meals, and word of mouth can significantly impact your business. While we must always watch our costs in order to make a profit, it is important to realize that it is the revenues that drive that profit. If we don’t get a return business, we lose revenue, and the business loses sustainability and growth period.

As a professional speaker, I customize my presentation to each audience and never do the exact same presentation twice. It takes a lot of work, and has been a key driver in the success is my business for 12 years. I will never serve leftovers to my audience or client. It’s simply not a good business plan or practice.

We all need to remember that we are in the people business. We have no business when we don’t treat our people and customers with the respect that they deserve, and provide them with a constantly reliable and top quality product or service

S5E11: An Accounting Firm that YOU Should Hire with Courtney DeRonde

“It’s really about understanding what is your way that you uniquely contribute to your business, and most of the time, it’s not going to be where you’re spending most of your time.” Courtney DeRonde

Today, my guest is Courtney DeRonde, a CPA and managing partner of TDT CPAs and Advisors— the boutique advisory and accounting firm for small businesses and nonprofit organizations. The company helps overwhelmed, successful leaders, understand and maximize financial information to achieve better results and move the organizations to the next level.

As the owner of a firm and managing partner, she also has first-hand experience running and scaling a small business. Courtney understands the need to help and teach clients the importance of being more financially literate. When TDT takes on clients, they learn more about their business to become a better partner, not just for a transaction.

The first question that successful business owners ask is, “how does my business make money?” As businesses grow and scale, you get the increased activity that you’re not directly involved with anymore. Therefore, the mindset shift is looking at good information that tells you where your business is making money.

The second question is about cash flow, and it is a shift from how much I have to what is flowing in and out of business over the next few weeks. Continuously looking at that helps eliminate surprises because most financial surprises are not usually positive. This mind shift allows you to be prepared and take action if things don’t look good shortly and not just look at where you stand today.

Our approach with our clients is very much from an educational standpoint, and the goal is to empower them to understand and use the information that we give them to make decisions.

The third question is about determining the highest leverage of time and talents. It’s really about understanding how you uniquely contribute to your business is. Most of the time, it’s not going to be where you’re spending most of your time.

Your product needs to be profitable, but it doesn’t have to be the best. It would be best to focus on the mix of something that you can do profitably and something that people need. Once you get something out there, you can improve it and make it better.

Often, people don’t have accurate information in their heads about costs and overheads just because no one’s helping them understand how all of this information flows. Pricing is a big part of how we help clients with recognizing and getting information around margins.

There’re certain times when it might make sense to lower your margin on a particular bid because of the future opportunities that can come from it. The main thing is knowing your actual margin to avoid paying to do the job instead of getting paid to do it.

If the price is a very sensitive issue, you need to give clients a couple of options. This gives them the opportunity and the agency to decide what they want.

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Things You Probably Didn’t Know About Flat Organizations.

I recently interviewed Rod Morris on my podcast, and our discussion centered around “self-managed distributed network corporate structure, a.k.a. flat organizational corporate structure.  I was immediately intrigued by this idea and decided to learn more about it.  You can listen to our interview on February 14, 2022.  

The traditional hierarchy organizational structure has been around since the 1950s, and so have many of the strategies developed to make it work well. As time goes on, though, some of these strategies are becoming less effective, while others are simply out of date. 

What is a flat organization? A company that doesn’t operate on strict hierarchies like most traditional businesses. In these companies, decisions are made at an operational level rather than from senior executives managers in the C-Suite or regional offices with little contact with worksites employees. Everyone should be involved in developing solutions to customer problems, which means that everyone has an equal say about what customers want.

To achieve the right balance between leadership and organization, here are four things you probably didn’t know about flat organizations.

Not all companies can be flat.

Not every business model is suited to a flat structure. Businesses operating in highly regulated industries, for example, may not be able to eliminate hierarchy and authority structures that ensure compliance with rules and laws. In these situations, it’s OK to be flat-ish. But when your company isn’t in a tightly structured industry, using a flatter organization can help you become more agile and responsive while reducing hierarchy-related costs. And if moving to a flatter org seems impossible today, try making room for some small experiments. Start by delegating decisions from your boss; give employees the authority to make confident choices—without requiring permission from higher-ups first—and monitor results closely so you know whether or not those decisions are right for your business. Just because everyone in an organization has titles doesn’t mean they have power over others; they control their roles and responsibilities.

How to start implementing a flat organization

There are numerous advantages to implementing a flat organization, with notable examples from start-ups like Google. Below are tips on how to start your company down that path. In addition, there is also the advice given to companies already moving in that direction; ideas for keeping morale high and employees motivated within non-hierarchical structures. 

Many companies have tried experimenting with flatter organizational structures, but few have mastered it. Yet some organizations are very successful in doing so; they have implemented policies and protocols which have allowed them to maintain a happy employee base while still producing outstanding results – even without bosses monitoring every move or workers jockeying for promotion. Let’s take a look at some of these positive trends. The last few years have seen an increase in companies pushing towards flatter organizational structures; teams where job descriptions focus more on duties than hierarchy. That’s not to say that everyone’s title is Director of Nothing or Head of Indeterminate Anything. Managers might be reduced, and everyone has an equal say regardless of experience level or tenure at the company.

The ten elements of a flat organization

#1. No strict hierarchical layers; 

#2. Everyone is responsible for what everyone does; 

#3. Each employee’s opinion matters, regardless of rank or seniority; 

#4. Decisions are made as close to customers as possible; 

#5. One-size-fits-all isn’t a good approach. 

#6. Teams across geographies come together regularly, if not daily;

#7. Employees can take their leave whenever they want—and are encouraged to do so 

#8. Employees are encouraged to use their initiative and don’t feel micromanaged; if something needs doing, they take care of it—and are rewarded for it in some cases (e.g., bonuses)—

#9. Employees wear many hats: They might be cross-trained to step into roles occupied by colleagues when someone is out sick or on vacation; and 

#10. Collaboration and teamwork are emphasized within functional areas such as marketing or accounting and across available lines such as between engineering and sales

Rules for Successful Collaboration

We all think that we embrace the concept of collaboration, but ego and office politics kill successful collaboration. In a flat organization, these hierarchies collaboration killers rarely exist, and if they do, they are addressed immediately.      

Collaboration is one of the underlying principles in improv leadership.  To achieve a successful partnership, there must be a foundation of respect for the other party; each party is trustworthy, and each party supports the team. If any of these three foundations are missing, collaboration ceases to exist.  

Here is the superpower to improv leadership with this foundation in place – become an active listener where you are focused on the conversation all the while eliminating distractions, such as internal dialog, biases, and the need to be correct, while removing external distractions, like your smartphone for a starter.  

Finally, adopting the Yes! And philosophy where – Yes, I hear what you are saying, And did you consider… The goal is to move the conversation forward positively and collaboratively.  

Flat organizational structures are not for every organization.  However, can your organization adopt a flat-ish approach and become more nimble by distributing the power and authority to others to make decisions without your approval.  In the book, A CEO Only Does Three Things by Trey Taylor, a CEO works on the company culture, hiring the right people, paying attention to the numbers, and putting other decision-making away from the CEO and to those managers responsible for the departmental expectations.  

Listen To Your Customers. They Will Tell You All About Why Excellent Customer Service is a Lost Art.

Growing up, I worked in a family restaurant in Lexington, KY, because I am a Greek American, and that is what most of my family did for a living. However, my father took another approach, and he owned a liquor store. In both cases, providing excellent customer service was the standard because that is the formula to success in business. They didn’t use words like – the customer experience because that is a synonym for excellent customer service.

Then what the hell happened to excellent customer service because it seems like that is harder to find than the Loch Ness monster, bigfoot, and a roll of toilet paper all put together. That is a scavenger hunt for the adventurous.

For example, I am a recent customer of AT&T TV, which provides a streaming TV service through their recent purchase of Directv. When I contacted them to begin my new service, it was in the middle of the month. As we were finalizing the purchase, I asked, will you be prorating the service for this month. The customer service person responded, ‘We don’t prorate our service anymore. We thought it was silly to do so.” WHAT?! Silly? When I think of silly, I think of the MTV show Ridiculous or YouTube Cat Videos or The Office Memes.

I needed to look up the definition of silly to see what I was missing. According to the Oxford Language Dictionary, the definition of silly is “having or showing a lack of common sense or judgment; absurd and foolish.” I am beside myself why any organization would think it would be silly to charge the customer the exact amount of money for the service rendered. Or are they thinking that providing excellent customer service by overcharging the customer serves that purpose? In business improv, this is a genuine lack of respect for the customers they are serving.

Let’s take a different turn and put the focus on those professions that tend to be very technical in nature – accounting, medical and health care, engineers, scientists, etc… Being very technical, in essence, means they speak a very different language than plain English. But, unfortunately, these professionals tend to forget that their audience does not speak their technical language.

For example, a few years ago, I had some tests done, and I received a phone call from my doctor on a Friday afternoon. That’s right, my doctor, not the nurse. I didn’t think she was calling to offer me Ohio State Football tickets for the next day. Instead, she said that the test results came back, and I may have – gibberish sounding words. Lots of gibberish-sounding words, along with more gibberish-sounding terms. I interrupted her and said, could you please explain this to me in plain English. She paused for a moment and said that “I may have cancer.” How hard was that? Was there an attorney sitting across from her desk making sure she was speaking in medial gibberish? Who knows.

Let’s bring this example into the world of accounting, particularly public accounting. I hear story after story after story about CPAs clients leaving a meeting and having no clue what the CPA was trying to communicate because the CPA was communicating in ACCOUNTING Gibberish. Similar sounding words that my doctor spoke to me. The language of business – accounting – is a foreign language to those who do not have the same depth of knowledge and speak. Have you ever traveled to a foreign country and, before arriving, not invested anytime in trying to learn the basics of the language like – “where is the bathroom, how much for a beer, why is everyone taking an afternoon nap?” Instead, we get frustrated because they don’t speak English in their own country. Arrogant.

To top it all off, when CPAs are trying to explain something to a client using an excel spreadsheet, they should be arrested for exceeding the speed limit and abusive behavior. They are going a mile a minute AND bouncing around the spreadsheet-like a super ball. If they continue to do this either in person or on Zoom, they need to issue air sickness bags before they begin.

There is a communication problem that exists, and it is a prominent blind spot for the CPA. You know why because they continue to act this way even though you “the client” did instruct them that you don’t speak ACCOUNTING or TAX, and you don’t need to see all the detail. This type of behavior is affecting the overall customer service they are providing to their clients. However, when I have asked those frustrated clients why don’t they change CPA firms, their response is usually, “this is my second or third firm, and they all have the same issues. Therefore, I will keep my current firm because I trust them even though I don’t understand what they are trying to communicate to me.” That to me sounds like a loveless marriage, and we are staying there because it is easier.

Earlier this year, a colleague contacted me asking for a referral to a CPA firm. A family member had been doing the books for several years, and the business outgrew the capabilities of the family member. On a side note, the family member suffered from excessive Accounting Gibberish and using excessive speeds while operating a spreadsheet. I suggested two regional firms and one small local firm.

The decision was made to go with the smaller CPA firm, thinking they would communicate better with them. My colleague did share early on that they are not fluent in accounting and keep the conversation at a high level and put it in language that they understood – let’s call that plain ENGLISH! Since signing on as a client, there have been some struggles until recently, when it escalated to a full-blown meltdown.

My colleague called one afternoon in TEARS after a Zoom meeting with the CPA firm because they didn’t understand what the CPA was trying to explain to them, AND they were trying to explain this via an excel spreadsheet with 50 columns and 500 rows. The spreadsheet was not that big, except it felt that big as the CPA was trying to explain it at Mach 4 speed while Tigger was bouncing around the rows, columns, and cells. They just wanted it to be over and did not want to ask any questions because they felt stupid enough and didn’t want to feel worse.

No client or customer should ever have to go through this same type of treatment even though the CPA had no clue the negative impact they were having on their client. On a selfish plug, that is why I wrote the book Taking the Numb Out of Numbers: Explaining and Presenting Financial Information with Confidence and Clarity so CPAs can better connect, communicate, and collaborate with all of their clients.

Once a firm realizes that explaining the financial information in plain English and using stories to help understand, they will have a substantial competitive advantage in the marketplace. So be that firm whose clients rave about excellent client service because you are a translator of financial information so that your client’s business bottom line will improve way beyond their wildest dreams. BTW – you know that referrals are the best and cheapest form of marketing.

Let me help you become better translators of your complex financial information so that you can gain the competitive advantage over your competition. Please contact me at peter@petermargaritis.com.