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Community Involvement: Board Lessons
Are you getting involved in your community? Community involvement is essential for any successful business. Whether you champion a non-profit organization, or a fraternal or civic organization, you realize the value of giving back to your community - and the insurance industry has generally been exceptional in this regard. It would be nice to think that we get involved without any sense of wondering, “What’s in it for me,” but the reality is that we’re human. Most businesspeople hope to see some return in the form of enhanced relationships, branding, marketing, and promotion. Some people get involved due to a personal passion and expect nothing except for the opportunity to be of service. However, these are generally the exception, so let’s take a pragmatic look at volunteer activities. The biblical maxim holds that what you give comes back to you tenfold. Yet, there seems to be a multitude of perceptions when it comes to defining the term “involvement.” The question is whether you’re involved in “name” or in “deed,” and, maintaining a holistic symmetry, are your returns in name or in deed? The 50-40-10 Rule After years of serving on various boards (mostly non-profit) and helping many other boards in their strategic planning, I’ve come to believe in the 50-40-10 rule of community involvement. Fifty percent of board members seem to feel that they’re fulfilling their commitment by simply attending a 90-minute meeting once a month. They offer their opinion when asked, vote on various measures, say their goodbyes, and go on about their lives. In their defense, they feel that they’re making a major contribution to the organization, are quick to cite their board membership, and never fail to attend high-profile fundraising events. However, they’re members in “name” only. Unsurprisingly, these people get their returns in name only. Social and/or business conversations usually end with the comment, “We’ve got to get together to… give me a call and we’ll do lunch.” As we all know, the relationship seldom goes any further than this well-meaning shrug-off. Forty percent of board members split the difference between “name” and “deed” membership. They do everything that the 50% group does, but they move beyond this by joining and participating in various committees and sub-committees. These people receive far more in return than our first group. Although their actions have earned them a higher return on their investment, the relations they develop are somewhat limited in scope and less fulfilling than they could be. Their commitment is half-hearted and so are their relationships. Then we get to the top 10%. These are the people who not only make things happen; they jump into the fray, roll up their sleeves, and git’er done. Their actions make up for all the shortfalls of the other 90%. Granted, they put in more time and effort than anyone else, but their returns are usually well beyond the 10-1 ratio. Due to their actions, people want to become close to them in both business and social circles. After all, winners attract winners, and everyone wants to be associated with a winner. Is it any wonder that this 10% also encompasses some of the most successful business leaders in the community? The traits they developed to build their success are the same ones that serve them well in the volunteer arena. The qualities that enable them to lead their employees help them lead the community as well. You Get in Proportion to What You Give As a case in point, I recently produced a four-hour, live talent competition show here in Branson for a particular charity. I knew that several board members would rally volunteers and get specific jobs done. These same people were also among the busiest of our board members in every facet of their lives. I also knew that I needed assistance in other critical areas and that I couldn’t rely on board members to follow through and complete these assignments. So I looked to the community and found highly successful, non-board members who were fans of this particular charity. They jumped at the opportunity to help in many, many ways, and were directly responsible for much of the event’s success. Is it any wonder that they’re so successful? People want to do business with people like this! I also invited a friend and a relative to the event. One sat in the audience and did a little schmoozing to little avail - a few polite conversations, but that was about it. My son-in-law, on the other hand, asked how he could help. I chuckled and said, “How about being my legs during this 12-hour day?” He replied, “I’d love it, what time do we have to leave in the morning?” During the course of the event, which took place in Branson’s largest venue, he probably ran about 15 miles helping to make things run smoothly. Since he was backstage with me, I had an opportunity to introduce him to some movers and shakers, and explain that he lived in the Nashville area and was a genius at building Web sites—particularly for the entertainment industry. These “action people” were able to see his hustle during the course of the day; and before we left, several of them made a point to give him their business cards and ask him to call about some work they’d like him to do. By becoming involved on an active basis, he positioned himself to receive the rewards. Whether you choose to get involved in the hope of making business connections or for the altruistic purpose of feeling good by helping others, you only get back in proportion to what you give. If you’re involved, how involved are you? If you’re not involved, why not?

Turning Complaints Into Gold Mines
Only one client is more detrimental to your organization’s well-being than the dissatisfied one who complains – and that’s the one who is dissatisfied and does not complain. The client who complains is giving your organization a chance to make amends, to make good on perceived promises, and to create a raving fan. However, the client who does not complain and simply leaves and never comes back will leave a mark. That mark is on your wallet. Can you afford to lose that client? Consider the following: He/she will tell an average of 11 people about the negative experience. This will make it more difficult for your agency to sell to the client’s friends. It will cost your agency seven to nine times more to replace a client than it would to retain one. A new client, on average in the first year, will generate only 33% of the profit that you earned from the former client. A former client has only a 9% chance of returning to your agency. You will lose that client’s lifetime revenue if he/she moves to a competitor. The insurance industry spends a king’s ransom every year in sales and marketing to attract new clients – an important and crucial activity to produce future growth and profitability. On the other hand, what do you spend to solve clients’ complaints in a manner that “Wows” them and causes them to become raving fans? If your agency is like most businesses, probably not much. To understand the impact of handling clients’ complaints to “Wow!” them, let’s look at word-of-mouth advertising. As the original advertising medium, it’s free and comes in two forms, positive and negative. The “up side” to word-of-mouth advertising is that in addition to being free, it’s credible and usually carries no hidden agendas. The “down side” is that if a client is unhappy with your agency, you can be sure he/she will do everything possible to prevent friends and relatives from doing business with your organization. The “deep down side” is that often you don’t even know a problem exists. Perception is the key to understanding the damage word-of-mouth advertising creates. Consider this scenario: Joe Average stopped at Happy Fast Food to purchase a hamburger. He ate it, watched some TV, and went to bed. He got up, ate some eggs and toast and went to work. Do you think he spent a lot of time talking about the good hamburger he ate last night? Now, consider the same story, except that when Joe went to take his first bite, a worm oozed out onto his hand. What was the subject of conversation the next day? For the next few days, Joe told everyone he met about the worm-infested hamburger at Happy Fast Food. He had to. It’s human nature. There was no way to stop him. The only solid defense would have been to head off the problem before it became unmanageable. So what do you do? Even the best-run companies will occasionally create an unhappy client. When you and your employees face an angry and complaining client who threatens to take his/her business elsewhere, you can’t afford to view the situation as bothersome or only as a headache. Dealing with an upset client offers you two opportunities: (1) To learn what your agency needs to improve; and (2) to make this client a raving fan. Saving clients, then, represents a real gold mine. WHAT YOU CAN DO Proactive Client Contact Studies show that a majority of clients do not complain. Consider this example from the airline industry. An airline lost all the luggage on one of its flights. Twenty-four of the passengers complained. The rest of the passengers didn’t even let the airline know that they didn’t receive their luggage. A startling 96% of all clients will not complain, and if they have four or five negative experiences with your organization, they’ll simply walk away and you’ll never know why. Regardless of whether they’re trying to avoid conflict or they believe complaining will do no good, these departed clients will engage in the negative word-of-mouth advertising mentioned earlier. This means that your goal must be to increase the percentage of clients who are comfortable complaining to you when necessary. Transform unhappy clients who are non-complainers, and the least loyal clients, into complainers, who can become the most loyal. Your agency should proactively contact A and B clients on a regular basis. (For a complete discussion of these client segments, refer to my article, “Customer Loyalty and Retention Primer.” The A and B clients make up the 50% of your client base that produces 95% of your revenue.) Create a comfortable and inviting atmosphere so that complaining clients are warmly welcomed. For the A’s, I strongly recommend a phone call two or three times a year; and for the B’s, two letters a year is a good start. The letters should invite clients to express their concerns, complaints and compliments. Error Recovery Anticipate client complaints. The key to success in working with complaining clients is to train employees to communicate effectively with them; which means that your agency needs to initiate an outstanding complaint recovery strategy. Without adequate training and opportunities to practice, employees tend to get upset when clients complain or are angry; they don’t know how to handle these situations. General Philosophy Don’t take clients’ upset personally. Don’t get emotionally hooked; they’re upset because of a situation, not because of you. When you let a client “push your buttons,” you lose. Make it a game or challenge to see how many complaining clients you can turn around. See if you can have the conversation end with their being happy. Offering on-the-spot solutions from the first person they contact will ensure that 95% of your clients will stay with your agency. If a second person needs to speak with them or if they wait up to 24 hours for a response, only 84% will stay. Specific Steps Train your employees to: Be empathetic, validate the client’s feelings and offer an apology. Use a soft and soothing voice. Most people are happy with a simple apology presented in an understanding voice. It’s amazing what an “I’m sorry” will do because it doesn’t happen very often. Aim to open communication by using probing questions. If the person seems reluctant to discuss the problem, rephrase the question. Listen fully. Don’t interrupt or become defensive or argumentative. If you do, it likely will escalate the situation. Take notes, and if “in person,” look up often to maintain eye contact. Show you’re interested and concerned. Thank and apologize. When the client has finished speaking, thank him or her for sharing the information. Then apologize again. Most employees don’t know how to say they’re sorry. They aren’t trained to put themselves in the client’s shoes, and they’re not willing to admit mistakes. Offer solutions and an extra. Talk about what you can do, not what you can’t do. Put it positively. You probably will need to repeat what you can do a few times in a firm, polite tone of voice. Be generous. Give these complaining clients something extra and “Wow!” them! An important concept to remember is that you won’t please all people. Do the best you can. With the right attitude, tools and techniques, you can turn these clients into satisfied, loyal “raving fans.” It’s not always easy, but it’s always worth it. To learn how to be extraordinary, read this brilliant example of complaint recovery from a nightmarish situation. Club-Med-Cancun’s vacationers were heading from New York to their Mexican destination. The flight took off six hours late, made two unexpected stops, and circled for 30 minutes before it could land. Because of the unexpected delays and mishaps, the plane was en route for 10 hours more than planned and ran out of food and drinks. The plane finally landed at 2:00 a.m., with a landing so rough that the oxygen masks dropped from their compartments and luggage fell from the overhead bins. A lawyer on board had already started to collect names for a class-action suit. Silvo de Bortoli, general manager of the Cancun Resort and a legend throughout the organization for his ability to delight clients, got word of the horrendous flight and immediately created an antidote. He took half the staff to the airport, where they laid out a table of snacks and drinks and set up a stereo system to play lively music. As the guests filed through the gate, they received a personal greeting, help with their bags, a sympathetic ear and a chauffeured ride to the resort. Waiting for them was a lavish banquet, complete with mariachi band and champagne. The staff had also rallied other guests to wait up and greet the newcomers, and the partying continued until dawn. Many guests said it was the most fun they had had since college. Now that’s a recovery which, by the way, resulted in no lawsuits and clients who became raving fans! Now go and “Wow!” those clients again and again and create raving fans who will be your unpaid sales force!