In 1911, Leon Leonwood Bean (better known to his friends by his initials “L.L.”) stomped in from the chilly Maine weather with cold, aching feet after a long hunting trip. He had a fierce, personal obsession to design and manufacture a more comfortable boot for hunters and outdoorsmen. He dreamed of marketing it across the United States through a mail-order catalog. Not only would he offer better footwear than any other available at the time, he would stand behind the quality with a 100 percent money-back guarantee.
A 100 percent money-back guarantee was a standard feature in mail-order catalogs of the day. It was an easy offer to make because its predicted redemption rates were extremely low. That is, until Bean’s first hundred pairs of boots went out and 90 of them came back from customers who all wanted a full refund.
Close to going out of business from the cash drain that ensued, Bean repaid every one of those 90 customers. He then went a step further. After reworking the design, he shipped replacements to those customers, even though they had already received cash refunds. That was the early beginning of a legendary policy on returns, replacements and refunds.
Today at L.L. Bean Co., the company sees this policy as a major reason why it is celebrating more than a century of success with an ever-growing global base of loyal customers that account for annual sales topping $1 billion.
Even more interesting from a marketing intelligence perspective, L.L. Bean often receives—and accepts—returns that look like its products but are actually those of a competitor. In the process of refunding the price of the returned products, including those with a competitor’s label, L.L. Bean is in a highly enviable position to learn about its customers and its competitors.
To be clear, we are not advocating that electrical contractors offer 100 percent money-back guarantees. We are proposing that service-minded contractors mimic the kind of customer-centric mentality that has made L.L. Bean and many others so successful.
Leading marketing gurus agree with this notion. Amy Buckner Chowdry, whose firm, AnswerLab, advises how to create a “user experience,” wrote “Five Habits of Customer-Obsessed Companies,” for Inc. magazine. She advocates for businesses to do the following
- Constantly learn about your customers and innovate.
- Eliminate risk.
- Spend a lot of time with your top customers, in particular.
- Doggedly study the competition.
- Validate a concept before you build it.
There isn’t much of a difference from the basics of service in our industry and what leading firms are doing elsewhere.
Constantly learn about your customers and innovate
We previously wrote about the idea that electrical contractors, who are dedicated to developing and growing service work activity, building a customer base, and enjoying steadily increasing and recurring revenues, must recognize dual perspectives for consideration: their employees’ needs (internally) and their customer’s needs (externally).
Put into the terms of Chowdry and others, electrical contractor service leaders must think of themselves as the “deliverers of great service experience.” As employers to their own people and contractors to their customers, service-oriented contractors must dispatch fully prepared electricians who learn about customers. Electrical contractor organizations, in turn, need to foster an environment that promotes education, technical proficiency and innovation and supports employee feedback toward providing a great service experience. The effect will be repeat business.
Customer-obsessed companies first understand customer needs, understand how to design their product to fit these needs, and validate that their products and services meet expectations. By learning about their customers at every stage of the process, they eliminate risk and improve customer perception. As service-based electrical contractors, our sector of the industry has a unique opportunity to put customers at the center of the design of our product, yet we do not. In a recent poll that we conducted, almost 70 percent of the respondents place high importance on customer needs, yet less than 40 percent actually ask about them.
Spend a lot of time with your top customers, in particular
It is one thing to talk with your customers and ask about their needs; it is another to observe them. Previously, we suggested that service-based managers should get out into the field more often and observe how their employees work, as a way of innovating and improving core efficiencies. This massage could also apply to your customers. Begin with top customers, the ones with whom you are trying to establish long-term relationships. Visit them more often, and try to observe how their employees use your installed product while you are not there. It could significally improve how you work with them to provide a great service experience.
Doggedly study the competition
Would you volunteer to repair the defective work of a competitor for free? Maybe not, but the point is that opportunity exists in every situation. When called to a service location for the first time, who out there takes the time to observe and understand what the competition did and catalog it before attempting to fix it? Not many of us, and it is an opportunity in the waiting. This practice also can be implemented for executives and managers when dealing with new customers who have left another contractor. Learning from others, in the field and as an organization, can be as good or more effective than studying ourselves.
Validate your concept before you build it
We have innovated within our organization, provided our workers the tools needed, and learned from our customers. We have a good idea of how to provide customer-based services now. We should be ready to go. Right? Consider integrating the customer into one last process: that of validation. Validating your plans with the customer can help ensure all stakeholders have similar expectations, understand the problem and buy into the solution. Some service calls do not allow for the time to validate the solution (they might need their electricity immediately). Still, when possible, bringing the customer back into the discussion one more time reinforces trust and helps create customers for life, the goal of leading electrical contractor service providers.
L.L. Bean understood these concepts and more and used a simple guarantee. Purchasing his product required trust in its quality and dedication to the customer. More importantly, the guarantee implied his trust, making consumers the focus of the product and, therefore, customers for life. Today, this innovative relationship with customers has fostered international recognition in the world of business and made L.L. Bean a global apparel competitor. It proves that a century of a customer-based strategies and leadership can pay off.
MCCOY is assistant professor in the College of Architecture and Urban Studies at Virginia Tech. Contact him at firstname.lastname@example.org. SARGENT, a 40-year veteran of the electrical contracting business based in Pittsburgh, is the author of “Reinvent Your Contracting Business with Sustainable Service.” He can be reached at email@example.com.