June 2011 Newsletter

Dealing with Client Complaints

When dealing with a client complaint, consider it an opportunity to learn and continuously improve your business, rather than a battle call. Prepare for the call and follow these steps to move toward a positive outcome and a happy client once again.

You first want to take the time to relax and listen completely. Don’t interrupt and let the client finish. Calmly repeat back what you heard to show that you were listening and that you fully understand their complaint. Ask questions as appropriate. Never defend or justify, but listen, empathize, and clarify. In other words, do not offer excuses, as it is time for solutions.

Always apologize, without assessing blame, even if you don’t believe you did anything wrong. From your customer’s perspective, they have a legitimate complaint. A sincere apology will usually begin to diffuse their frustration.

Empower the client to tell you what they feel will right the situation and solve the problem together. If more research is necessary, do it quickly and follow up promptly.

Finally, thank the client for their time. Remember that your client is really telling you that they care enough about your business to communicate the situation instead of leaving your business. Word of mouth travels very quickly, and even faster if the source is an unhappy customer.

Be sure to then share the scenario with your staff so that everyone learns from the situation.

Every business owner possesses the ability to effectively deal with complaints, to turn a dissatisfied customer into a champion of the business, and to learn from the mistake.

Improve Collections Results Without Alienating Customers

Collecting from customers is a far greater proposition today than it was just 24 months ago. Historically, our hard work was considered complete once we delivered our goods or services. We reviewed our receivables aging reports on a regular basis, watched the vast majority of our customers pay within 30 days, and felt a sense of security that our businesses were operating in healthy territory. Today, the difficult work begins after we deliver our goods and services as we enter the collections phase. Many of our customers take longer than 30 days to pay and receivables can creep into the 60 to 75 day range.

It is not difficult to see the impact of these changes in payment terms. A company that generates $10 million in revenue annually can sustain up to a $1 million dollar swing in their cash position simply from a 30 to 45 day deterioration of payment. The ripple effect from just a fraction of this change is dramatic. Those lenders who looked at us as small businesses affectionately prior to today’s credit crunch are no longer so easy to reach. They have pulled back due to their own balance sheet woes and their fear of our cash shortages. Today, we are left somewhere in the balance, hoping our conditions improve.

The normal and prudent reaction to such lending conditions is to cut expenses and look for new business to boost the bottom line. But, you can only cut expenses so much without cutting into the ability to meet customer expectations and many businesses were already operating in a lean and efficient fashion. And, competing for new business against competitors who will practically give away their goods and services seemed impossible. Establishing cross training programs, reducing full time positions, and renegotiating contracts help, but how are the competitors selling at such a low price and staying afloat?

Now, we are hearing frequently and seeing to a lesser extent that we have weathered the worst of the storm. Spending time with our customers is the most important activity we can invest into our business. Your customers are paying close attention to their business as well. They are evaluating their relationships on all fronts. Are you confident that your customers view your firm and your mutual relationship positively? If not, do not leave it to chance. Reaching out to your customers will help to improve your mutual understanding of each others businesses, improve your ability to attract new business, and allow you to gradually build the foundation to improve your payment terms with your clients and, therefore, your cash position.

First, figure out everything you know about each of your customers and use that to develop a detailed list of critical information that you should have. The list should include everything from historical information such as order and payment history, to buying information such as all employees who impact buying decisions and the process used to approve purchase orders, to personal information on key buyers who have authority to make final authorization on orders.

Hopefully you and your critical staff members have in-depth information such as this. It will help them to understand how their job fits into the overall picture of your business revenue. You will have an opportunity to gain some team building time with your staff while also creating a better flow of information inside your business.

Finally, draw conclusions from the information. Have each critical staff member determine where opportunities exist to sell new products, create stronger relationships outside the workplace, or lend some unique expertise that you have that the customer may not. Look and act on opportunities for your business to be a better partner.

Business Disaster Planning

The Small Business Administration (www.SBA.gov/content/disaster-planning) reports that according to the Institute for Business and Home Safety, an estimated 25 percent of businesses do not reopen following a major disaster. What would have happened to your business if it were in the direct path of the Tuscaloosa tornado or flooded by the Mississippi River? Although natural disasters of this scope are rare, it is critical that businesses have a plan in place with steps to take before, during and after a variety of disaster types including:

  • The death of the owner of the business
  • An epidemic such as the flu causing high employee absences
  • A fire or flood in the office building
  • A natural disaster such as a flood, tornado, blizzard, hurricane, or earthquake
  • A terrorist attack

As a first step, identify the disasters that could affect your business and develop a plan of action to be carried out in the event that it occurs. You will need to identify the critical components such as:

  • Staff – how to keep staff safe and bring in replacement or temporary workers as appropriate
  • Data and Computer System – how to create and store databackups
  • Communications – how will you communicate with employees, customers and vendors – what if the Internet and business telephone system is down? Do you have an up-to-date internal and external contact list?
  • Office Space – How long will you be displaced from your building? Where can you set up your business operations quickly to get up and running?
  • Insurance – Do you have adequate business insurance coverage? Has it been reviewed annually? Does your insurance company have wire instructions to your financial institution in case a paper check can not be delivered to your location?
  • Storage – Safeguard your equipment in case of an impending disaster. Where would you store your fleet of trucks in case a flood warning was given for your area?

Then, once the plan is developed, regularly review it and practice the steps.

Start the process now. Listed below are a few agencies that offer publications and programs to assist in the planning process.

  • SBA (Small Business Administration) has created “Prepare My Business” (http://www.preparemybusiness.org/). This site was created to help small-business owners to start the planning process, become aware and educated, and assist with checklists and templates for risk assessments of various disasters. “Prepare My Business” also offers free monthly webinars (http://www.preparemybusiness.org/education). Take a look at the website. The next webinar is on June 21, 2011 entitled “Crisis Communication Planning – the Keystone of Disaster Recovery”. The site also has archived past webinars that you can view anytime you want to.
  • Department of Homeland Security (http://www.ready.gov/) has a section on its website “Ready Business” in which it takes you through four topic areas – Overview, Plan to Stay in Business, Talk to your People, and Protect your Investment. You can order or download all “Ready Business” publications on this website.
  • FEMA (Federal Emergency Management Administration) has a wealth of information and publications to help the business owner at www.fema.gov. FEMA’s website has the most up to date information and links to other agencies that offer assistance in times of disasters. FEMA library offers publications “Protect Your Business from All Natural Hazards”

Lift It Safely

In many U.S. businesses, employees are exposed to some type of lifting during their workdays. Improper lifting techniques are responsible for a large percentage of avoidable back injuries among workers and using proper lifting techniques can help prevent the resulting downtime. As employers we need to ensure that we have properly trained our employees on the correct lifting procedures including:

  • Stretch legs and backs before lifting anything.
  • Take small breaks between lifts if lifting a number of items.
  • Don’t overdo it–don’t lift things that are too heavy.
  • Make sure there is enough room to lift safely.
  • Avoid walking on slippery, uneven surfaces while carrying anything.
  • Get help before lifting a heavy load. Use a dolly, cart, forklift or co-worker as appropriate.
  • Test every load before lifting by pushing the object lightly with their hands or feet to see how easily it moves.
  • Pre-plan by choosing a clear path before lifting
  • Increase balance by keeping feet at shoulder width apart with one foot slightly forward.
  • Take deep breaths and tighten stomach muscles while lifting.
  • Bend at the knees and hips and not at the waist.
  • Lift using leg muscles to reduce the load on the back.
  • Lift smoothly. Sudden movement and weight shifts can injure the back.
  • Face the load to be lifted.
  • Hold the load close to the body at waist height.
  • Turn with the feet, not the back, to avoid twisting when lifting.
  • Keep in mind that a small size load does not always mean a light load.

Please contact the Four Point HR Risk Management Department for these and all of your safety needs.

Battle High Gas Prices

Without a doubt, one of the biggest burdens for business owners over the past several months has been the high price of gasoline. As of this printing and according to AAA, gasoline prices have hit a national average of $3.955 per gallon and these high prices are putting a squeeze on small-business owner’s profits. With the fear of losing customers, many businesses are reluctant to increase costs to protect their margins.

What can business owners do to reduce the negative effects of gas prices? Here are four tips:

  • Install GPS units in vehicles to save money and gas by avoiding traffic snarls and unnecessary idling.
  • Combine deliveries. Think of it as carpooling for businesses.
  • Change out fleets of trucks or cars to hybrids.
  • Hold web conferences instead of traveling to in-person meetings.

Payroll Corner

  1. The minimum wage rate for Florida has increased to $7.31 per hour, effective 6/1/2011. Four Point HR will notify clients affected by the change.
  2. The US Department of Labor (DOL) has revised the tip credit rules. Under the final rule,
    an employer intending to take advantage of the “tip credit” provision need only inform his employees that he intends to use the “tip credit” before doing so. The employer, however, must also inform its employees of the following:

    • The direct cash wage the employer is paying a tipped employee
    • The additional amount the employer is using as a credit against tips received
    • The additional amount claimed by the employer on account of tips as the tips credit may not exceed the value of the tips actually received by the employee
    • The tip credit shall not apply with respect to any tipped employee unless the employee has been informed of the tip credit provisions; and
    • All tips received by the tipped employee must be retained by the employee except for the pooling of tips among employees who customarily and regularly receive tips.

The final rule does not require employers to provide these notifications in writing. The DOL, however, noted that it is preferable for employers to do so because a physical document would permit an employer to demonstrate that he has met these requirements.