Author Archives: brian

Hawaii Mold and Flood: A Better Mouse Trap

One new client of Kona Impact is Hawaii Mold and Flood. We were excited to work with them as they truly offer a range of services unsurpassed by their competitors. We all see the franchise mold remediation businesses around town, but few people know that they are extremely limited in what they do. Hawaii Mold and Flood is different.

Hawaii Mold and Flood

Hawaii Mold and Flood

We used to think that the national water damage franchises offered complete solutions for water damage, mold testing and repairs, but they don’t. Kona Impact found out the hard way.

When our old office had extensive water damage, the mold remediation company came in, tore out the walls, did their thing, and left. We spent two weeks waiting for the repair people to come in and fix the walls and flooring. We never did receive a mold report. That was very stressful and costly for us as a business.

If we had known of Hawaii Mold and Flood at that time, we would have made one call and received the following services from them:

  1. Mold testing, which would have been done on the spot with their Instascope Mold Detection Machine. We would have known the results immediately, instead of waiting for a sample to be sent to a lab, with two weeks to get results.
  2. Water damage removal. All the water damage we had would have been taken care of.
  3. Then, Hawaii Mold and Flood would have repaired our premises. No waiting for a separate construction/repair team.

We would have had everything done by one company:  from mold testing to clean up to repairs. This, of course, saves the property owner and tenants considerable stress, hassle and time.

We hope that our clients and people in Kona, Hawaii never have flood or mold issues, but if you do, make your first call to Hawaii Mold and Flood: 808-345-2221

Think and Behave like an entrepreneur

First, let me note that I work with hundreds of entrepreneurs a year and have worked with thousands over the years. I have seen remarkable success and complete failure; winners and losers at the game of business. What I write here is not about any one Kona Impact client; instead it is an amalgamation of traits and behaviors I have witnessed over the year.

Successful entrepreneurs (defined as those that can make a decent living with their business):

1. Don’t focus on low-value activities. In other words, they spend their time on the things that add value to their business. We’ve had clients spent ten+ hours on their business cards. Imagine if they spent two on their business cards and eight hours contacting potential clients? Or, if they spent 8 hours on the content of their website? We had one client sketch his logo on a napkin, and probably spent another ten minutes looking our design concepts before deciding. He received an excellent logo, one that is easily recognized in our community, because he knew ideas and concepts and paid us to handle the details. It’s still, to this day, one of best logos we’ve made.

2. Treat people well. If you’re a grump and don’t like people, don’t hire them and don’t work with the public. The people I know who are the most successful entrepreneurs in West Hawaii have achieved this success, in part, because they are exceptional with people skills. From the top to the bottom of their organizations they show respect for their employees and customers. They attract the best employees, and have very little turnover.

3. Seek a high level of a quality, but don’t demand absolute perfection. Quality is key in any business, but perfection, for most, is wasting a huge amount of resources for perhaps a five percent improvement. If you have 95-99% quality, be happy and move on to the next project. Micromanaging and incessant focus on that last bit of quality means that you are missing many opportunities for achieving more.

4. Look forward, not backward. When I was working at my part-time job in high school, I pushed a dolly into a glass door. The window shattered. The owner came over, looked at the door, and said to his son, the manager, “call the glass company.” That was it. Back to work. It took me some time to realize that getting angry or firing me would not have been productive. After all, it is not a mistake I would ever make twice. Spilt milk, as they say. I see forward-looking business owners all the time, and they are, overall, much more successful than what I call the could-of-should-of-would-of entrepreneurs.

5. Innovate with caution. Every day we are bombarded with software, machines and ideas that are supposedly going to revolutionize our businesses. I find most of the successful entrepreneurs take a very measured approach to change. Most do not seek out technology with the idea of changing their business dramatically; instead they seek new products or ideas as a way to evolve—to change over time—what they sell or what they offer.

entrepreneurship

I like to think of entrepreneurism as a process of becoming. There is no point where one can usually say, “I’ve done it. I am an awesome entrepreneur.” Instead we need to look in the mirror, seek feedback and strive to evolve and get better every day. Lots of base hits: few home runs.

At Kona Impact, we strive to support business owner—new and experienced—as they navigate the waters of business.

Another Retail Chain Store Gone in Kona

What is going on with our national retail chains? We’ve lost Radio Shack and Sports Authority in the past year, and Payless Shoes will follow soon. Sears, in its corporate filings, says its long-term viability is questionable. They own K-Mart, so that, too, is in peril. The current Ross building in Kona was made for a Circuit City store: it never opened.

These are the brands I grew up with. I remember the joy of going school clothes shopping at Sears and K-Mart as a little tyke. When I was a teenager, I bought my first CD player at Radio Shack. I even worked a summer in a Radio Shack store, and had a great time playing with all the gizmos and gadgets when the store was empty.

The reality, however, is that all these stores hold a place in my memory from thirty-plus years ago; I have shopped these stores very little in the past 10-20 years.

The simple answer, the one we hear from the management of these stores is that online and over-capacity in retail are responsible for their demise. These are certainly true and are a big reason why some big box and specialty retailers are failing, but is there more?

I think there is.

Here’s why I shop online:

  1. Selection. Radio Shack in Kona would have—at most—a few choices of keyboards, speakers or any other gizmo I wanted to buy. Amazon has tens of items in each category. I always felt like I was compromising by settling by selecting among the few choices available at Radio Shack.
  2. Information. In the old days, you would rely on the salesperson’s recommendation. Nowadays, I can use the reviews of hundreds, and sometimes thousands, of consumer when looking at the products online. I trust the crowd to steer me right. Most chain retailers control the information, and that’s just unacceptable in this day and age. There is even a car dealer in Kona that blocks cell phone signals at their dealership to decrease the information available to consumers. Because of this, I took my business elsewhere.
  3. Price. Just this morning, I was looking at a wall mount for a television. The one I liked was $55 at the local big box store; I found a better one online for $28, including delivery.
  4. Time. My time is very valuable to me. If I can order a product in five minutes online, that’s at least 25 minutes of time I save if I have to go to a local big box retailer.

commerce concept

Is there any hope for chain stores and big box retailers?

Of course there is. Stores like Wal-Mart and Target offer a lot of goods that just don’t make sense to buy online (toothpaste, frozen pizzas, alcohol, and various sundry items), items that sell best when the consumer can see the product (clothes, fabric, shoes) and things that are needed right away (a toy for the tots, spaghetti sauce or a quart of oil). These big box stores—Wal-Mart, Target, Lowe’s and Home Depot—do things well, for the most part. Their selection is good and all four have done a good job of integrating delivery to stores and real-time inventory on their digital platforms.

The trend toward online sales and the subsequent demise of specialty chain retailers is inevitable and will continue. Consumers have changed. Technology has enabled unparalleled access to information. Technology has also created immense efficiencies in the supply chain and distribution systems of Amazon, creating huge barriers to competition.

If I were a betting man, I would bet on K-Mart, Macy’s, Office Max and at least one of our chain automobile supply stores, being in peril in the next handful of years. They can, of course, pivot their business strategies and maintain relevance long into the future.

 

Five Ways to Grow Revenue for Your Kona Business

In the last post, we looked at how reducing costs 10% for your Kona business can have a large impact on how much your business is able to generate in free cash flow. Another way to increase your free cash flow is to increase sales. Note, however, sales at any costs, especially when expenses are uncontrolled will not have as big an impact as reducing costs.

So, we’ll use the numbers from the previous example: a Kona business that generates $300,000 in revenue with 80% expenses, resulting in a net profit of $60,000. If you increase sales 10%–a good number for a mature business—you’ll see about $6,000 in profits more at the end of the year ($300,000 x 10% = $30,000 additional revenue – 80% costs = +$6,000).

How can increase sales 10% for your Kona business?

Add new products or services. Take a look at the competitive landscape for your business in Kona. Are there businesses that are doing a poor job of meeting their customers’ needs? At Kona Impact, we went into several business areas due to the lack of reliable providers in our community. Another place to look is at similar businesses on the Mainland. Are they offering products or services that you could add? I’m not a fan of chasing fads, but if you can find products or services that will add long-term value to your company, consider growing by expanding your offerings.

Increase prices. There is always a fine line between charging the right amount and charging too much for your products or services. Too much and you’ll lose loyalty and run the risk of a lower-cost competitor entering emerging. Too little, and you’re leaving money on the table. From our experience at Kona Impact helping hundreds of businesses over the years, we find that businesses, especially startups, often charge too little out of fear of losing (or not gaining) customers.

kona business

Grow your online presence. Truth be told, most Kona businesses do a poor job with their online visibility. The cardinal sin, of course, is having no online presence. An old, outdated website is another big problem for many local businesses. The gold standard: modern, dynamic website that is mobile friendly is not met by most Kona businesses. Getting your online presence right can make a huge difference in the number of new customers you attract.

Expand your marketing. It’s easy to become complacent when times are good. Many companies reduce marketing expenses because business is good and they are running near capacity, so additional customers or sales are thought to be unnecessary. There might be some truth to this, but it is a bit myopic; the future is certain to bring ups and downs in our economy, so preparing for the bad times now is a prudent strategy. Even more important should be the goal of landing high-profit, low stress clients. For example, Kona Impact would love to see more convention and hotel business and less sole proprietors that want a business card design. We want both, but one is certainly going to add more to our bottom line. Expanding to direct mail, every door direct mail, online advertising, event sponsorship and getting some help with your marketing are sure-fire ways to do this.

Reach out to existing customers. This, in our conversations with hundreds of business owners a year, is one of the biggest misses for local businesses in Kona. It is much easier to sell to a business that knows and trusts you, than to prospect to new clients. Simple things like a call, a newsletter or thank you notes can go a long way to helping you sell more to existing customers or clients.

Kona Impact has been helping businesses in Kona, Hawaii grow for over ten years. We take a common-sense practical approach to dealing with the design and marketing needs of our clients. We don’t chase rainbows and ground our advice, services and products in what works. If you’d like to some help, give us a call at 808-329-6077.

Five Ways to Reduce Business Expenses for Your Kona Business

Small business success in Kona, Hawaii is often a matter of shifting percentages. If your Kona business is bringing in $300,000/year and your expenses are 80%, you’ll have $60,000 left for your efforts. Now, imagine cutting your expenses 10% (to 72%): you‘ll see an extra $24,000 a year in your pocket, which will raise your profits by 40%.

How could a small business in Kona, Hawaii save $24,000/year on $300,000 revenue?

Aggressively track expenses to maximize deductions. Track mileage using software like MileIQ or just keep a notebook in your vehicle. This can save you thousands every year. If you donate money or supplies to non-profits, c heck to see how you can deduct those items.  Remember, you don’t need to give any extra money to Uncle Sam; tax evasion is illegal, but tax avoidance is smart!  Possible savings: $2-5,000.

Take your bookkeeping in-house. For many small businesses that I know if Kona, bookkeeping and payroll fees are often upwards of $10,000 a year. Programs like Quickbooks can help you manage these tasks with much less effort than ever before. Possible savings: $4-$10,000.

Look carefully at how you can reduce costs with your supplies. At Kona Impact, we used to use a just-in-time system for ordering our printing materials. This kept our inventory costs low—a good thing—but we paid for it dearly in FedEx costs. We now are willing to tolerate higher levels of inventory if we can buy a palette of materials and save greatly on shipping. Consider buying paper in bulk at Costco and find ways to buy in bulk to reduce unit costs. Possible savings: $1-$10,000.

Kona business expenses

Focus on reducing at office expenses. Hawaii’s electric costs are 2-3 times those of the Mainland, so consider turning off office equipment at night and on weekends. Put your water dispenser on a timer.  Turn on the air conditioner for later in the morning and turn it off earlier in the afternoon. Consider room/zone air conditioners. Use natural light to reduce electricity costs. Consider changing to LED lighting. Water delivery is about $8/gallon, $832/year for two containers a week. The water dispenser in Wal-Mart charges $1.25 for five gallons, $130/year, and it’s the same water you’d get from a delivery service. Call your internet and phone providers; chances are there are plans available now that offer better products and less costs. Possible savings for your Kona business: $1-$5,000.

Have the right people do the right jobs. All employees don’t have the same skill sets and costs. Consider hiring a young, low cost employee for the some of the manual labor or small tasks. Many small business owners have a hard time delegating and letting low-cost workers do low-margin work. As a result, they end of doing a lot of tasks that add very little to the business’ profitability. Possible savings: A lot!

Just for the sake of comparison, if you increase your sales 10% for your Kona business, you will only see $6,000 in extra in your pocket ($300,000 x 10% = $30,000 additional revenue – 80% costs = +$6,000). Compare that to the $24,000 if you can lower your expense 10%! All things being equal, cutting expenses and maintaining revenue will have a greater impact on your financial success. The best outcome, of course, is to grow revenue and cut expenses!

 

 

Vehicle Graphics, Lettering and Wraps in Kona, Hawaiii

There are few marketing investments that will have a better return on investment than vehicle graphics. Done right, they can get your business’ name in front of hundreds of people a day, day after day, year after year. You will be marketing to people who live and work in your community.

Here are some of our Frequently Asked Questions for vehicle graphics in Hawaii:

  1. Do you do vehicle wraps?

If you mean full vehicle graphics on vertical (sides and back) AND horizontal surfaces (hood, roof, trunk), the answer is no. The UV rays and heat in Hawaii virtually guarantee and short lifespan for graphics mounted on hoods, roofs and trunks. The sun is just too brutal on even the best of materials, and we don’t want to sell anything that will not give the owner a good return on investment. There was a company called Kona Wraps that tried to make a business out of wraps. They went out of business in a year and left town suddenly.

  1. What vehicle graphics do you do then?

We make magnets, cut vinyl, printed and laminated vinyl and see-through materials. This covers about 90% of the vehicle graphics you see in Kona. If you have seen anything short of a full vehicle wrap, we can probably do it!

  1. How much is….?

There are three costs for vehicle graphics: 1.) design, 2) materials, and 3) install. All things being equal, a large, complex design will make all three of these costs higher. Most of the projects we have completed are less than $1,000 (though some have been higher); vehicle magnets are $100. We do not price our projects low, because we need to have the budget/time to do the job right, with quality materials.

  1. Do you have any recommendations for effective vehicle graphics in Hawaii?

We have three recommendations: 1) bigger is almost always more visible, 2) contrast (dark text on light background or light text on dark background), and 3) avoid clutter. Think about your essential message: what do you want someone who will see you for a few seconds to remember?

  1. Can we save money by self-installing?

Absolutely! We are happy to do the setup work and give you the install-ready materials. Things like PUC numbers, simple graphics and smaller stickers are relatively easy to install, by yourself. Larger graphics or strips of cut vinyl require more skills, but if you’re on a budget and want to give it a shot, we’re happy to sell you install-ready materials.

  1. How long will vehicle graphics last in Hawaii?

Cut vinyl will last many years; printed and laminated graphics less. It’s impossible to give an exact number, as a vehicle parked at the harbor all day will get a lot more UV and heat than a truck used up mauka on a farm. Most of our material is rated 4-7 years on vertical services by the manufacturer.

Ironman World Championships 2016 Signs and Printing Special Offer

The Ironman World Championships are always a great time in Kona, Hawaii. The athletes, their families and the companies add a vibrancy and level of passion to Kona that make it one of the most exciting places in the world. It’s a great time.

Kona Impact has been providing displays, banners, posters and printing services for many of the companies that come here for years. We certainly appreciate the work, and we enjoy working with companies from all over the world as they set up and operate their booths and retail locations.

This year we would like to give something extra to the companies that get their printing and sign jobs to us early. This will allow us to plan our resources better and will ensure that the all the print and signs are done when they arrive.

We like to say that getting your jobs in early means you will have one less thing to worry about! We take a photo of all completed projects and send them to the client, so that then can rest assured everything is done to a high standard of quality.

So, for all orders over $250 placed for Ironman before 16 September, we will give you some custom bling from Kona Impact and a gift certificate for a lunch at one of our favorite Kona restaurants: Lava Java or Huggo’s. Both are on Alii Drive and close to all the Ironman action.

If you place your order between 17 and 23 September, we’ll give you a gift certificate for a few cups of coffee or a smoothie.

We welcome orders for Ironman event printing, signs, banner, poster and vehicle graphics at any time time. We even have been known to deliver products on the night before, the day of and the day after Ironman. If you have a last-minute need, give us a call; we can probably help.

Kona Impact
808-329-066
74-5599 Luhia St, E-7
Kailua-Kona, Hawaii

Ten Years of Business in Kona: Our Five Smartest Moves

Kona Impact will soon celebrate its tenth year of business in Kailua-Kona. I remember very well the early days when the phone did not seem to ring very much, and we were not as focused as we are now. It took some time, but it was great to beat the odds: 50% of businesses don’t make five years, and according to this article, 96% don’t make it ten years.

So, we’ve obviously learned a thing or two over the years.

Here are five decisions we made that, I feel, were critical to our success:

  1. We kept expenses low at the beginning. A lot of new businesses look for prime office or retail space and spend a lot of money on newspaper advertising. We didn’t. Our first office space is now affectionately called “the dungeon” as it was a small, windowless space in a fairly run-down building. We spent almost nothing on print advertising and nothing on radio or television. This allowed us to have the resources to weather the inevitable financial storms we faced.
  2. We have done spectacularly well online. Even ten years ago, we knew that the best, most cost-effective place to be found was online. Over half of our initial clients came to us after finding us through online searches, and to this day, a large percentage of our new clients come to us through search (with the other biggest percentage coming through referrals).
  3. We knew when to throw in the towel. We had five pillars of our business when we started, and within a year, it was evident that two of these pillars were not working out. The demand was just not there, and, truth be told, there were other businesses in town more established and better at these things than us. We quickly stopped offering these services, cut our losses, and focused on what we were really good at. Failure was a great teacher!
  4. We identified inefficiencies in the market. After trying many times to buy local and support our local businesses, we gave up trying to send clients to some providers in town. Their customer service, products, and quality were horrible, so we saw an opportunity. Growing into the general printing, wide-format printing and signage businesses made a lot of sense, since we were already doing the design work. They were mostly unimaginable when we started; now they are a big part of our product mix.
  5. We have been active in the community. Kona is a small town, one that relies a lot of word-of-mouth marketing. For me, one of the best business (and personal) moves I made was joining the Rotary Club of Kona. Each week we have lunch and an outside speaker gives a presentation. The presenters are mostly community leaders, and their presentations are great ways to know what is happening in Kona and the issues facing our community. Another part of Rotary is the awesome community service projects we do like vision testing for our Keiki, building parks, planting trees, and fundraising. The connections in Rotary have not only provided me some business but also helped me meet some simply wonderful human beings. I highly recommend any entrepreneur at any stage of his or her business to focus on face-to-face connections in a service organization, a church, a sports team or any group of like-minded people.

Like any business, there are hundreds of decisions that we have made that have got us where we are. Some, have been disastrous, and others have been helped Kona Impact prosper.

kona impact logo

Ten Realities of Business in Hawaii

Hawaii is a paradise for visitors, so much so, that many who come here on a vacation decide to stay. The allure of the ocean, the tropical landscape, and the great year-round weather, make the Hawaiian Islands a great place to live.

Doing business here, however, is another story. It’s not to say that running a business in Hawaii is any more difficult than running one the Mainland; it’s not if you understand and accept some of the unique challenges. In fact, many of the things that are challenges, can also, if understood correctly, result in huge opportunities.

Here are ten thoughts on running a business in Hawaii

1.       The big box stores rule most retail.

Don’t even bother trying to compete with the big box stores. In Kona, Hawaii, where I live, we have Lowe’s, Home Depot, K-Mart, Walmart, Target, Office Max and Petco. If you want to open a retail business, don’t even think of trying to compete with the big boxes; they will win on price, selection, and convenience. Find a unique concept, something that you can do at good margins if you want to go into retail.

2.       Franchises don’t do make sense (for the most part)

High shipping costs and a relatively small population (except in the Honolulu metro area), make it difficult for a lot of small and medium-size franchise businesses to do well. There are no economies of scale for a one-off chain restaurant, and the dispersed population on the islands makes it hard to open many units. So, if you can deliver franchise quality systems for auto repair, cleaning, accounting, jewelry, home services, and others, you will be able to do well and avoid the onerous franchise fees and costs.

3.       The three-legged chair economy: tourism, real estate, and construction

The Hawaiian Islands’ economy is mainly based on tourism, real estate, and construction. Some add military spending for Oahu. Our agriculture, technology, education, research, manufacturing and medical sectors contribute relatively little, on a percentage basis, to our overall economy. Many newcomers will gravitate to these pillars; for example, there are many more realtors than there are properties for sale. Most construction workers can get a job  right off the plane.

4.       It’ll cost ‘ya

Almost everything in Hawaii will be 40%-100% more than the Mainland. Ninety percent of our food is imported, as is 100% of our building materials, vehicles, petroleum-based fuel and manufactured goods. Milk is $5-$6/gallon, gas is 40% more than most places in the Mainland, and a “starter” home will be $500,000 and up in most places. Our electricity costs are the highest in the country. One of the problems new business owners have in Hawaii is that they don’t have a good grasp of expenses, and they make poor decisions based on a lack of understanding of local costs.

5.       Self-sufficiency is essential

One of our pieces of equipment needs to have a part replaced every year. The part is close to $1000, but to have the tech from Honolulu fly over to replace it would add $2,500 to the cost. We quickly learned how to do the work ourselves, and have saved $15,000 over the years.

For many repairs, there might not even be a service person available on the island. For others, the parts might be days, weeks or months away. Shipping costs will make some products prohibitively expensive. Skills like basic carpentry, mechanics, welding and “duct tape ingenuity” are very valuable on the islands, and can make the difference between staying in business and shutting the doors.

A well-planned house lot can provide huge amounts of fruit and vegetables a year due to excellent year-round growing.

6.       What makes it bad, makes it good

You can look at all the challenges of doing business as obstacles or opportunities. For example, the lack of fast casual chain restaurants, make for great opportunities for restauranteurs to open restaurants without the costs and constraints of franchising.

Several local food manufacturers have had great success developing products for local consumption. We all have to eat. Even though their supply and manufacturing costs are high, they can offer specialty products at a decent price point compared to imported food.

There is seldom enough business for more than three prosperous companies in many sectors of the economy on the neighbor islands (excluding Oahu). Become one of those three, and you’ll have some great barriers to entry protecting your livelihood.

7.       The best location on the island: online

The great equalizer to global commerce is the internet. I know of many local entrepreneurs who run their business from home in Hawaii. Many savvy business owners can leap frog their local competition by establishing a solid online presence and becoming much more visible online than their local competitors.

8.       For every season, churn, churn churn

There is a huge amount of what I call “churn” in the Hawaii economy. Thousands of people move here to retire every year, and thousands die and move back to the Mainland every year. We see a huge amount of people who come to Hawaii in seek of paradise or a fresh start and soon become homesick or discouraged and leave. There is no land more geographically isolated in the world than the Hawaiian Islands, so, as one would expect, a lot of people come and leave.

This can be an opportunity. I know of one Realtor who has sold the same condo five times in ten years, each time earning nice commissions. Property managers here can charge a premium, and local contractors, it is well known, make more money for the same work when dealing with temporary or off-island residents.

9.       You’re not in Kansas anymore; get over it!

This should be self-evident. Hawaii is not Kansas, nor is it California, Canada or Kentucky. There are tremendous opportunities for entrepreneurs here, but there are also huge obstacles, many of which might not seem apparent to a Mainlander. If you are hell-bent on living like you did before you came here, you’re going to pay a price, both monetarily and mentally. For example, if you need a softball league, there is one, but a much better choice might be joining one of the popular paddling teams. Apples can be expensive, but papayas are very inexpensive. It will be very expensive to repair a Volvo here, but if a Toyota works for you, you’ll be fine.

hard business in hawaii

10.   The quality of life in Hawaii can be exceptional and that matters…a lot!

My home is ten minutes away from one of the best beaches in America, and my garden grows year-round, supplying me with hundreds of pounds of fresh vegetables and fruit every year. I own one long-sleeve shirt, and I wear sandals all weekend, year-round. That level of quality of life is, in my mind,  what I “buy” with my hard work and perseverance with my business. It’s not easy; it never is.

We all know that Hawaii is ranked high in taxes, regulations and the cost of doing business. We also know it is ranked low in education, workforce development and pro-business initiatives. These are realities, and they are not going to change anytime soon.

Anyone seeking to start a business in Hawaii needs to go in with his or her eyes wide open. Accept what is, and find opportunities where they exist.

Kona Impact | 329-6077

To Complain is Human, To Resolve Through Awesome Customer Service is Divine

I found myself on the phone yesterday talking to the customer service people at one of my largest suppliers. We spend about $15,000 a year with them and what we buy is, by my estimation, very high-margin goods.

The problem was that they sold me several items on their website that I needed asap. I paid more for shipping—several hundred dollars—than I did for the products. I was fine with that, as I needed everything the next day. It turns out that they did not have the inventory they represented on their website, and the first order was not shipped. Ok, stuff happens, and I had a day of leeway, so I ordered a comparable product, paid for overnight shipping (again) and thought my problem was solved. Alas, they again sold something they didn’t have, and I was without the supplies I needed for one of my high-value clients.

The order snafus were serious, but the worst part was the complete lack of communication from the company. Not a call. Not an email. Nothing.

customer service concept

A simple call after the first order saying they were out of stock and could ship a comparable product (there are many that would have worked) would have taken care of my needs. Simple. Positive.

A call to them a day later was an exercise in frustration. The first person to answer the phone had no information, and to be honest, had no power or proper training to deal with anything. Her supervisor, perhaps jaded by life or the job, was worse; very defensive and full of excuses.

Here’s what we all should be doing when our businesses let a customer down.

  1. Listen to the customer and let her get all of her thoughts out.
  2. Ask questions, paraphrase and make sure you understand the issues.
  3. Show understanding of the customer’s feelings. If this does not come naturally, make a list of appropriate phrases and keep them visible in your work area.
  4. Apologize for the mistake!
  5. Only give excuses for things that are temporary. By this I mean, if you couldn’t ship because FedEx had delays due to weather or your machinery broke and is being fixed. Most people can understand temporary or unforeseen issues.
  6. Do not give excuses related to poor management, poor inventory control or lack of staffing. Your client doesn’t want to hear about your problems: he called to solve his. The best thing you can do is work internally to fix your systems to avoid future letdowns. Nobody wants to see your company’s dirty laundry.
  7. If you can’t solve the problem—often true with new and low-level employees—have the sense to get the caller to someone who can. There is nothing more frustrating—from the customer’s perspective—than being given the runaround and being condemned to voice mail hell. That only breeds additional frustration and lack of confidence in the business.
  8. It should be obvious, but, SOLVE THE PROBLEM! Sometimes the solution is to just listening to someone who wants to vent. It might mean repairing or replacing equipment or giving some additional technical support.
  9. Give something a little extra. A one-time discount, an extended warranty, some additional product at no additional cost. Make the customer feels as if you appreciate her, and you want her business in the future.
  10. Ask the customer if you have solved his problem! You might be surprised how the perceptions of the customer service rep and the customer differ.

The important thing to remember is that a customer who takes the time to call, email or a write a letter has probably not been lost. With a little listening, understanding and problem solving, you can probably keep customers who take the time to let you know of problems.

The unhappy customers who don’t reach out are the ones you have probably lost. They are also the most dangerous to your business, as they are likely to tell many others of their negative experiences.

Kona Impact | 329-6077