Guest Blog: Lead with Communication to Reduce these 5 Revenue Leaks
This week we feature an article by Denise Graziano who explains how essential clear, consistent, authentic communication is for companies to use when dealing with difficult news. – Shep Hyken
What professional skill is highly overlooked, underrated, often treated as an afterthought, yet is as vital as fuel for any vehicle on a company’s road to success? Clear, consistent, authentic communication.
As CEOs and companies prepare to tackle some of the top concerns for this year, only the most successful will prioritize communication as part of their plans.
These five common revenue leaks, many of which are related to those top concerns, are directly impacted by enterprise-wide communication practices. Better practices that emanate from leadership can prevent or correct such leaks and perhaps turn them into growth opportunities.
Employee – mission disconnect
Situation:
Your mission statement has become, or always has been, merely words on a wall and not a philosophy embraced by employees. In other words, it is simply a statement with no mission, vision, or purpose.
Cause:
If your employees do not understand their role in the company mission or feel valued in the company’s success, it is not their fault. It is likely that company communication, from leadership and throughout the organization, does not adequately connect with employees and bring them into the company narrative.
Impact:
Employees with an emotional connection to their work are more productive. Recent findings in the Global Leadership Forecast 2018 found that companies that connected purpose to their mission statement outperformed other companies in their market by 42%. They had greater employee engagement and more loyal customers.
How to prevent and correct:
Companies that differentiate and dominate in their markets have a passion for the products or services they provide and the people for whom they provide them. The key: That passion and purpose must be communicated and conveyed effectively from senior leadership throughout management and all employees, so that they are more compelled to consistently deliver a superior product, service, and customer experience. Stating your mission once is not enough. Vitalize the mission by actions and words.
Losing top talent (current employees or prospects)
Situation:
A top goal for 2018 is hiring key talent. 63% of US CEOs are hiring, but they say it is more difficult to find the qualified workers they need (PwC 21st Annual Global CEO Survey). Talented employees are a company’s most precious asset and should be treated as such. Engaged employees look beyond the paycheck; they want to know the role they play in a company’s success. According to Mercer’s Global Talent Trends Study, 97% of employees value being recognized and rewarded for a wider range of contributions.
Cause:
32% of CEOs are concerned about the availability of key skills (PwC), yet not enough companies market to prospects as they would to customers. Retaining valued employees requires attention and effort far beyond benefits, pay, and bonuses.
Impact:
Fortune 500 companies that excel at recruitment marketing strategies have 62% higher average revenue per year than those with average scores, and 152% higher average revenue per year than those with failing recruitment scores (SmashFly’s Fortune 500 Report: 2018 Recruitment Marketing Benchmarks).
How to prevent and correct:
Attracting today’s top talent requires being visible to your prospects, not simply waiting for them to discover your job posts. It means being transparent, telling stories verbally and visually that convey the internal brand experience. It means being responsive to reviews on Glassdoor or Indeed.
Retaining valued people requires ongoing engagement, which is a multifaceted approach, dictated by the culture of an organization. What remains constant is the need for companies to articulate the path of their organizations and their employees’ roles in them. Leaders cannot “set it and forget it” and pass this off to Communications or HR departments; leaders must set the example.
Distrust of leadership
Situation:
Your latest employee survey reveals a decline of trust in leadership.
Cause:
Any size company, from small to global, can make false assumptions when they fail to monitor and nurture the relationship with employees.
Impact:
When employees become disengaged from leadership, it leads to fear and distrust, which negatively impacts productivity, customer experience, and morale. Disengaged employees cost organizations an estimated $450–550 billion each year (Gallup). Conversely, engaged employees are five times more likely to recommend their companies to others, four times more likely to do something good beyond that which is expected, three times more likely to work late, and five times more likely to suggest improvements at work (Temkin).
How to prevent and correct:
Companies should not treat employees with a need-to-know-basis approach, otherwise the staff is likely to fill in the blanks with their own details. Leadership must ensure that all levels of management provide a consistent message, so that information is not received differently across departments, locations, or shifts. Especially when difficult news must be shared, leaders must demonstrate trust in their employees and in their relationships by communicating a unifying message.
Negative customer reviews or feedback
Situation:
A pattern of negative customer reviews emerges from direct customer contact, or worse, publicly via social media channels.
Cause:
Customers are not adequately notified about upcoming changes that will affect them, or a company response to customer feedback about product quality, service, or experience is not swift enough to retain customers.
Impact:
Snapchat made sweeping changes to their platform via an automatic update, which outraged users, including celebrity-user Kylie Jenner, whose negative tweet caused Snap shares to lose over $1 billion in one day. However, even when companies do prepare customers for change, as did L.L.Bean with their recent change to a longstanding return policy, they must expect outrage and have a plan to address concerns.
How to prevent and correct:
Companies should seek input and insights from client-facing employees about the state of customer relationships. Having this insight before a situation can erupt publicly is invaluable. Empowering customer service employees to resolve problems in real time can help contain potential problems. Training employees to listen to customers, acknowledge a problem, and take corrective steps can de-escalate a volatile situation. Certainly, prior to any significant product or service changes, consider the impact before taking action. When announcing any news, be authentic, provide details, and prepare for potential backlash.
Loss of customers after difficult news or a crisis
Situation:
Changes in customer policies, unethical developments, customer breaches, et al, have caused clients to exit, or threaten to do so, en masse, which can potentially have a devastating financial impact.
Cause:
Long-standing customer policy changes should be announced well in advance of the changes, so customers do not suspect or imply a cover-up or poor business practices. Unexpected negative developments or crises that are not swiftly addressed by leadership can quickly escalate into viral social media issues.
Impact:
Stock losses, negative press, fines, lawsuits, and severely damaged customer relationships are possible. For example, United Airlines suffered a 4% decrease in market share after the airline’s overbooking practices precipitated a passenger being dragged off a flight. The 2016 Wells Fargo scandal for opening unauthorized client accounts resulted not only in penalties but in stock declines and lawsuits.
How to prevent and correct:
Difficult news is just that. However, in order to retain valued customers, a proactive, honest explanation will often stem the tide of a mass exodus for matters to do with price increases, product changes, layoffs, closures, et al. In a crisis situation, however, swift, honest acknowledgement of the problem and a plan for corrective measures is essential to salvaging reputation and customer relationships. Delayed responses escalate, infuriate, and drive customers away.
Companies must remember that communication is a dialogue, not a monologue. Technology gives employees’ and customers’ voices unprecedented power to impact revenue, retention, and loyalty.
Ongoing communication is the key to any healthy, successful personal relationship. Employee and customer relationships also need communication to thrive, perhaps more than ever in our hyper-connected environment. For any plan, convey your intentions succinctly and deliberately, to avoid potential missteps along the way. Lead with communication.
A trusted advisor to the C-suite for decades, Denise Graziano truly cares about helping companies differentiate and gain a competitive advantage in their market, by leveraging the power of positive employee and customer experiences.
For more articles from Shep Hyken and his guest contributors go to customerserviceblog.com.
Read Shep’s latest Forbes Article: How Southwest Airlines Keeps The Romance Alive With Its Customer
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