Jackie Zach
May 23, 2024
In the latest episode of the Tough Love for Business podcast, Jackie Zach and Mike McKay discuss the critical role of consistency in generating referrals for businesses. They emphasize that maintaining a reliable and predictable experience for customers is essential, citing an example of a photographer whose inconsistent service led to a drop in referrals. Consistency builds trust and helps prevent the negative impact of service variability on client satisfaction.
Mike further illustrates the importance of consistency using McDonald’s as an example, noting that while it may not be the best, its consistent experience drives customer loyalty. They also touch on the 80/20 rule, which highlights that focusing on consistent service for top customers can lead to better referrals. The episode concludes with a reminder to regularly review customer experiences and proactively seek referrals from satisfied clients.
Do you need someone to help you evaluate your customer experience? Take advantage of a complimentary business strategy session to discover the opportunities in your business! https://actioncoachwi.com/podcast-ask-a-question-complimentary-session/
Podcast Transcript
Jackie Zach: Welcome to the Tough Love for Business podcast. I’m Jackie Zach, and I’m here with Mike McKay. We’re both coaches with ActionCOACH of Milwaukee. In our coaching conversations with clients, we often emphasize the importance of getting referrals. If you network at all, getting referrals is the goal, right? For people to feel comfortable referring you, your customers need to have a consistent experience.
Let me give you an example. I had a client who was a photographer. In February, if she was photographing a wedding, she could get the pictures back to the bride very quickly—within a day or two. The bride would then recommend her to others because of this speedy turnaround. However, when summer came and she had ten weddings to handle, she couldn’t return the pictures in just two days. So, the referral was based on one experience, but the new client didn’t have the same quick service. What do you think happened? The second person is unlikely to refer her to others.
We often discuss setting expectations with clients and ensuring they have a great, but also consistent, experience. Consistency is key to building trust and encouraging referrals.
Mike McKay: Well, it doesn’t even have to be great. Take McDonald’s, for instance. It’s known for consistency, not for being the best. People go there because they know exactly what to expect every time, whether they’re traveling or not.
Jackie: Right, and that consistent experience is key.
Mike: That’s right. And so, if you think about whatever business you’re in, the objective of the onboarding process for a customer is to make it as consistent as possible across the board, even if there’s variability. For example, if your onboarding process involves giving a customized gift to everyone, one person might get a baseball bat, another a bowling ball, and another a dozen golf balls. The consistency is that everyone receives a gift; the inconsistency is that the gifts are different. That’s a version of customization, right? But if someone says, “I signed up for coaching with Jackie, and she took me out to dinner and spent eight hours with me—it was the greatest experience ever,” and the next person signs up but you follow the standard onboarding process without having dinner, that’s unintentional inconsistency.
Jackie: Right, exactly.
Mike: If you’re adding a little bit of magic for every client, that’s fine. But if you believe you’re customizing for everyone while treating clients wildly different—some taking six weeks and others just a week—that’s not fine. Someone considering referring you might think, “What will happen to Joe Smith if I tell him to talk to Jackie?” They might fear Joe will have a completely different experience, especially if, for example, Jackie is on vacation and doesn’t respond promptly. These uncertainties can significantly reduce or even eliminate the likelihood of referrals.
Jackie: Exactly. Inconsistent service can halt the flow of referrals and may lead clients to question other aspects of your business.
Mike: It really depends on your business. For example, if you’re a home remodeler, your onboarding process should be consistent. However, people will judge you based on the outcome of their individual projects. Another aspect of consistency is the 80/20 rule. This rule states that 80% of your profit comes from 20% of your customers. These customers might be high-value or low-effort, but they’re crucial to your success.
In the past, my company supplied Walmart. Walmart’s pricing was straightforward: if we sold something for a dollar, we got a dollar. In contrast, OfficeMax and Staples had rebate programs where we sold items for a dollar but had to give back 32 cents as a rebate. Walmart’s no-nonsense approach worked better, while OfficeMax and Staples eventually disappeared.
Consistency in your onboarding process helps target the right market. If you attract low-value (D) customers, they’ll likely refer others like themselves, which can be costly and problematic. I once taught a class about the 80/20 rule, and some participants were skeptical. I showed them that, for our business, exactly 80% of revenue came from 20% of our customers. I asked them to check their own data to see if the Pareto Principle applied to them.
You want to be cautious about accepting referrals from customers who are in the bottom 80% of revenue because they often bring more of the same type of customers. Consistency should be focused on your top 20% of customers, who spend the most or make the most transactions. For instance, if you run a high-end restaurant, you want regular patrons to have a consistent experience, as they are likely to bring more regulars.
In contrast, a one-time visitor who orders just a glass of wine won’t significantly impact your business. They’re less likely to return or refer others, compared to regular customers who have a greater influence on your success.
Jackie: Right. And another important point we discussed previously is asking for the sale. If you deliver consistent experiences, make sure to ask for referrals. Don’t forget to follow up and request them!
Mike: Exactly. Ask your satisfied customers, “Who else do you know in your target market who might enjoy this experience or benefit from working with me?”
Jackie: Right. So, today, take a moment to review your customer experience, especially for your top clients. Ensure they’re receiving a consistent experience and that you’re asking for referrals.
Thanks for joining us, and be sure to listen next time for another insightful topic. Have a great day!