In the business world, these ‘leaky faucets’ can have a detrimental effect on the success of a business. Given the speed at which word travels thanks in part to sites like Yelp and Facebook, dealing with an unhappy customer should be at the top of every employees to-do list.

Whether you’re at the front of the lines working the registers or in the back office, it’s important to take every unhappy customer seriously. Remember that customer complaints are an excellent way on improving ones business based on their feedback as well as an opportunity to turn an unhappy customer into a life-long one.

A great rule of thumb is that if done right, you should never hear that complaint again.

5 Things to Remember when dealing with an Unhappy Customer

1. Act swiftly: Nothing abates a situation faster than quick, responsive action. Always make sure to respond to complaints and unhappy customers quickly and more importantly keep them updated on where things are in regards to a resolution.

2. Educate your organization: The first step in dealing with an unhappy customer is first educating others how to deal with one. Just because the manager knows how to deal with a potentially volatile situation, doesn’t mean that everyone else does. Educate your organization through seminars and handouts, as well as by adopting great customer service as part of your brand.

3. Listen and Understand: One of the keys to any good negotiation or conflict resolution is to listen and understand what is 1. upsetting the customer and 2. what will resolve it. Don’t make assumptions on what the customer wants done; let them tell you and then respond.

4. Don’t take it personally: Remember, most complaints are not personal. As an employee, it’s important to understand that a customers frustration and anger is not directed at the individual themselves, but at the brand. If you begin to take it personally, you will let your emotions play into it which can lead to negative results.

5. Be Realistic: Telling an angry customer that the CEO of the company will call them personally is probably not gonna happen. Always make sure that when coming to a resolution and making ‘promises’ that they are reachable and will not be met with disappointment later on.

Let me explain. Before Starbucks went McDonald’s on their concept a few years ago, people attributed a lot of their success to the experience of being inside a Starbucks. The stores had a distinct ambiance that made you feel like you were somewhere else for a little while. Even if it was just Yuppieville inside, the smell of coffee, dark color scheme, and smiley ‘bartenders’ wrapped in green aprons made me want to stay there for a while. The coffee usually tasted burnt (Pike’s Place, of course), but being there kind of made you feel as if drinking black caffeine was exactly what you needed. I figured I could have just as easily gotten my afternoon coffee for about $0.34 at home, but going to Starbucks made me feel good for just an additional $1.16! Not surprisingly, I paid that extra $1.16 all through my college years, and still pay it now — just for the ambiance.

But it’s not just green aprons and bartenders that do it, or I’d be at an Irish pub doing my homework. The yogurt place I frequented through my college years had great frozen yogurt, of course, but it was the consistent hustle and bustle that made me want to go there. There was a vibrant energy I took from the fro-yo place that didn’t come from the sugar fix, but from the mix of crowd and comfort. As humans, we inherently want to be where others are; a lively, friendly, and fun restaurant or QSR establishment energizes one nicely.

A final honorable mention goes out to couches. Starbucks had them, the frozen yogurt place had them, and my favorite places now have them. It’s just great to be comfortable, to really carve an experience sitting at a cafe on your laptop or reading the paper over a latte to relax. Not to cafe owners: never underestimate the value of having comfortable couches!

A touchpoint is a point of contact between a customer and your product, service, or brand. Whether before, during, or after an actual sale has taken place, any interaction a customer has with your business is considered a touchpoint and potential for your business to increase their customer’s perception of your brand. Touchpoints span the whole value chain, but dealing specifically with the franchise industry and the major customer touchpoints franchises have to manage in relation to customers, there are five: direct mail marketing, in-store advertising, point-of-sale advertising, social media marketing, and mobile initiatives.

Direct Mail Marketing

Direct mail is one of the most heavily used forms of advertisement with multiple coupons for different brands hitting mail boxes every day. The direct marketing association pegs the response rate at “Letter-sized envelopes, for instance, had a response rate this year of 3.42 percent for a house list and 1.38 percent for a prospect list.” This shotgun approach has been a consistent marketer’s tool , but with the low response rate, and even lower conversion rate, marketer’s are seeking other channels and touchpoints to reach customers.

In-Store Advertising

In-store advertising is a major touchpoint as customers are already in the store, and now in-store advertising hopes to increase sales and promote products customers may not have intended to purchase in the first place. These highly visible displays of advertisement help influence a customer’s purchasing decision and awareness of new product offerings. The future of in-store advertising is making these advertisements uniquely relevant to customers depending on their prior purchasing decisions. This type of tailoring will increase relevance, and thus increase sales conversion.

Point-of-Sale Advertising

Point-of-sale advertising refers to any advertisement placed at the actual point of sale, usually at the cash register or around the POS system. This pertains to pop-up display ads, counter-top mats, and more recently promotions on the POS integrated credit card terminal. This POS integrated advertising is just starting to become more noticeable at businesses. It is still very basic and infant in its development with black and white screens and just simple messages trying to up-sell or cross-promote a product. Some of the most apparent uses of this are at gas stations when they ask you if you want a car wash to go with your fill up and at retail stores when they ask you if you would like to sign up for a credit card or donate some money to a particular charity. Point-of-sale advertising can be a very effective tool if presented properly and not just as another display advertisement, but enveloping the customer into the brand and experience of your business.

Social Media Marketing

Social media marketing refers to the new platforms oriented around people sharing with their social networks such as Facebook, Twitter, and Foursquare. These services allow brands to build their online social profile and increase their brand awareness online. If leveraged properly, loyal customers help brands by sharing interesting information and deals with their friends and family. This type of “free” brand awareness is what marketers are looking to tap in to. Currently there is a disconnect with physical businesses and online profiles, as in-store purchases are not as easily translated onto social media networks. Customers, especially the younger demographic are becoming more and more technologically savvy and have the desire to be ‘social’ with their online networks.

Mobile Initiatives

Mobile marketing refers to reaching customers on their cell phones whether through text messaging, a mobile website, or a mobile application on their smartphone. This is a very important medium as the number of smartphones are rapidly increasing and potential customers always carry their phones with them. Targeting customer’s phones have numerous benefits including being able to contact them at a particular time of the day (ie: 10:30am when they are making lunch plan) or when they are in a particular location (ie: within 1 mile from your store). This makes mobile marketing exponentially more relevant and conversions significantly higher than other mediums of contact. Text message marketing (or SMS marketing) has not garnered as much popularity as other forms of marketing, but from case studies of those who have implemented text message marketing, businesses have seen 15-20% redemption rate, leading to significantly higher sales compared to a similar sales period.

Managing Multiple Touchpoints

New mediums for reaching and contacting customers are spawning as technology is becoming more integrated into lives. This offers new opportunities for businesses and brands, but it also presents a challenge to manage all of these new touchpoints. Integrated solutions that offer a comprehensive platform to manage the majority of these initiatives will prove beneficial to brands and their business.

Swipe Cards Don’t Work

Many popular CRM-based loyalty programs use a magnetic stripe-based card that people are supposed to carry around and swipe when they make a purchase. These are really popular at the large grocery chains, so I’ve chosen to use them as an example. I routinely drop $100 on groceries whenever I go, and for years I’ve routinely also saved a significant amount through the ‘club’ prices at, for example, Safeway or Jewel Osco. Despite this, I’ve never actually held a grocery store’s “club” membership — I’ve been using their dummy card or a friend’s phone number for years. Safeway thinks my roommate, whose number I use, loves avocados (even though he hates them) and buys both fat-free and 2% milk. Ever since I’ve known this “loophole”, I’ve used it for two reasons: I don’t want to fill out a 2-page form for a swipe card I’ll forget every other week, and I already know I don’t need to. In the meantime, Safeway’s collecting the wrong info, giving me discounts as a free rider, and fails to engage anyone in the brand. This type of loyalty program makes customers loyal to the program itself, but not loyal to the brand.

Punch Cards Don’t Work

In creating a recent loyalty industry white paper, I remember reading a quote that struck me as both incredibly useful and obvious:

“Customers who like a product enough to buy it 10 times would probably pay for the 11th purchase, too.”

So why the popularity of a punch card? Plain and simple: it’s easy to do. The key failure in a punch card is not just that it’s easily forgotten or ineffective, it’s that it does not expand a customer’s product understanding. Instead of introducing your loyal and valuable customer to something new and exciting you offer, she is going to receive something she would usually pay for in exchange for carrying an embarrassing and dog-eared punch card. This type of program gives the illusion of loyalty, but fails to create any more value for the customer or the merchant.

The bottom line here is that if you’re using a regular loyalty “program” and not seeing any results, it’s because:

• You’re making people loyal to your program instead of your brand
• You’re collecting weak customer data, or not collecting any
• You’re rewarding the wrong things, and failing to expand a customer’s product line

Today’s business world means you need to be more involved and participate in a more complex method of building loyalty. You need:

• To engage us: show us that we visit your business because it resonates with us, even if it means making your own version of Apple’s ‘Mac Guy’ for us to connect with.
• To collect information quickly and easily: large forms create leakage; a unique key such as e-mail or phone number can be more valuable and easier to collect.
• Reward well: understand your customers and their behavior, promote their interaction with your products and brand. It starts with being more creative with your business and how it’s portrayed.

But an inherent problem arises from this: they become lazy

• They become too lazy to try the new items on the menu
• They become too lazy to post positive feedback on Yelp
• They become too lazy to tell their friends about their favorite place to eat

The opportunity is there.  The customers that love your food and service are ready to go above and beyond to make sure your business is successful – you just need to make the ask.

Inform them of the new

Though your best customers have their favorite meals, incentivize them to try new things on the menu to change up their routine.  Posters and signs are standard at the location, but the real value comes with the ability to communicate with your best customers through their preferred medium.

Customers may choose to subscribe to your business through any of the following mediums:

1. Text message
2. Email
3. Facebook
4. Twitter

Because they have joined your communication methods, it provides a great platform to tell customers about new menu items, promotions, deals, and upcoming events.  New menu items or events provides the perfect excuse to send a message to your customers and get them back into your location.

Post positive feedback on Yelp and other networks

If the customer has had an exceptional experience at your location, then it’s acceptable to politely ask for a review on Yelp and other social networks (such as Facebook places).

How to make the ask:

1. Cashiers: A fun, up-beat, welcoming cashier can politely ask the customer to write a review on Yelp and Facebook

2. Through RewardMe: After the purchase, the customer may choose to share her location through a check-in on Facebook, Twitter, or Foursquare

3. Signage through the location: Make sure to post your Facebook and Twitter links in print material at the location so that customers with smart phone can check-in and write comments on your social profile wall

What to ask for:

1. Yelp: Ask customers to post an honest review on Yelp (don’t ask them for a positive review – if you’ve given them a positive experience, then they’ll post a positive review)

2. Facebook: Ask customers to check-in to Facebook and post a comment or photo on the wall (ask them to post a photo of the food on the wall)

3. Twitter: Ask customer to post a picture or comment about your location and to include your handle: @businessname

Invite their friends

Customer want to invite their friends to your location – they just need a reason why.

Friendly rewards: the following type of rewards inherently drive the customer to bring a friend:

• Buy 1 burger and get another burger of equal or lesser value for free

Gift rewards: some customers may not want to redeem rewards for themselves; instead, they’re motivated by giving rather then receiving.  Give these types of customers a rewards that is meant to be “gifted” to a friend.

How it would work:

1. Customer receives a Gift Reward: Gift your friend a slice of pizza
2. Customer chooses friend through phone book
3. Friend receives a text message: “David just gifted you a slice of Pizza at Tony’s Pizza”
4. Friend walks into Tony’s Pizza, signs into RewardMe at the POS, and receives a free slice of pizza

Simple, easy, and fast

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Your customers want to communicate with you – but you’re going to have to initiate the conversation.

What does this mean for the marketing department? This means that as smartphone penetration in the US increases and as location-based services grow, it is becoming more and more imperative to take notice and take action. Whether you have a Director of Social Media, hire a consulting firm or agency, or start by giving the job to an intern, it’s time to start somewhere.

Good vs. Great Social Media Strategies

Engaging in social based services starts with creating a Facebook page, claiming your business on Foursquare, and checking out Google Places, but really goes so much further. A solid social media strategy can drum up new business, but a great one differentiates your business from the rest. A great social media strategy engages your customers through news, promotions, interaction, and fun, ultimately translating into the message that YOU CARE about them. When you start interacting with your customers through these channels, it makes your business more “human” and creates a deeper relationship with your customer. As a great example of engaging customers and really showing that they care as a business, check out Mechie’s Frozen Yogurt Facebook page with 78,000 likes and a vibrant community.

Using Twitter as the Communication Backbone

Toppers Pizza’s food truck, Spank Tank, along with a multitude of other modern food trucks, rely on Twitter to spread the word and update their customers and “followers” on their location, menu, and news. These new modern forms of media and communication allow businesses to stay connected with their customers on their customer’s terms. Giving customers this flexibility and autonomy respects their privacy, but also communicates the message when appropriate.

Study can be found here: http://pewinternet.org/~/media//Files/Reports/2011/PIP_Location-based-services.pdf

Key questions that you much ask yourself:

1. Can this 3rd party company flexibly grow along with my franchise?
2. Can this 3rd party offer me an all-in-one solution (so that you don’t have to work with multiple vendors)?
3. Will this 3rd party be around for the long-term

Flexibility and growth with the franchise

The franchise model is to grow to increase profits.  Because growth is of primary concern, the 3rd party company you work with must be able to accommodate rapid growth.

Think of it this way, it’s easy to implement in 1-5 locations in a given city; it’s a whole different ball park to implement in 50+ locations in multiple cities.

• How does implementation of the product work?
• Who does the training?
• What kind of maintenance is involved with the product?

These are all questions that need to be answered up front before you commit to a 3rd party vendor.  A franchise will live and die by how well structured its operation and growth model is; the 3rd party vendor must be able to fit in the operation and growth model in order to ensure long term success.

All-in-one solution

It’s tough enough working with one service/product provider; imagine working with 3 or even 5 service providers, each offering a different product for your franchise – it’s just not feasible.

The following are key new technology features that every QSR must provide:

• Loyalty program
• Text message marketing
• Online ordering
• Mobile ordering
• Email marketing

If you work with a different provider for each service, you’re going to have to work with 5 different companies, which will ultimately lead to headaches.

Choose a 3rd party provider that encompasses all of these features into one product, OR, choose a 3rd party provider that has a platform that manages all of these features.

For example, the RewardMe platform is open, allowing vendors to integrate their product into RewardMe.  This allows RewardMe to have the power of online ordering, text messaging, email, and mobile ordering.  Using the RewardMe admin panel, the client can handle all services through one main dashboard - simplifying the entire process.

Longevity

There are startups a plenty in the new technology field; each one is offering a new type of solution for loyalty, mobile marketing, and new customer acquisition.  You do not want to get into a situation where you commit to a startup, only to see them die a year later – this leaves you and your customers with a huge void to fill.

Before choosing a 3rd party vendor, ask the following questions to screen your prospects:

• Who do you currently work with?
• How long have you been around?
• How much funding do you have?
• Where do you see your company in 3-5 years?

Understand the company’s long-term goals and make sure they are aligned with the goals of your franchise.

Traditional Loyalty Program Benefits

For years, loyalty programs have been a proven way to increase repeat customers, increase customer spend, and ultimately increase sales. Businesses have seen consistent returns and continue to pursue some form of customer retention or loyalty initiative. Customers enrolled in loyalty programs become more engaged and build a stronger relationship with businesses that reward them for their loyalty, as they feel the business is giving back to them resulting in an increased perceived value from the customer. Traditional examples of loyalty program setups include “Buy 10, Get 1 FREE” and “Spend $50 and get $5 back.” These linear, standard, and non-dynamic rewards are a very simplistic and basic program. With today’s technology, businesses should look at rewards programs differently, and be more proactive vs. passive to leverage the power of their programs.

Modern Loyalty Programs

Modern loyalty programs include mobile and completely digital versions of the ‘traditional’ punch card and magnetic stripe card. Some are built into mobile smart phones and others are built into kiosk-type tablet technologies placed at the Point of Sale. These types of programs help you customize your rewards, make them more enticing to customers, adds a layer of gaming mechanics, and gives you a new platform to market, cross-promote, and up-sell to you r customers. Leave the generic, bland, one-flavored loyalty program behind. Customers are becoming desensitized to programs where businesses offer a generic Buy 10 and Get 1 FREE offer, they no longer feel special, as if they were a VIP members. New digital loyalty programs are the future where customers no longer have to carry dozens of physical rewards cards in their pocket and businesses can leverage the new suite of services to better engage with their customer, promote products, cross-sell, and up-sell.

Supercharging Your Loyalty Program

Supercharging your loyalty program means leveraging it beyond repeat customers. Experiment and try some of these following techniques and strategies to realize a higher return on loyalty program. Every month change your rewards offering to keep things interesting and fresh. Promote a new product in the form of a low point value reward to promote it to customers and offer them something they would never have tried otherwise. Use these new technologies as an added marketing channel to connect with your customer whether it be through advertising or key updates. Up-sell products right at the point of purchase through these new mediums. Cross promote a specific product that may not be your best seller, but you know people would love if they just tried it. There are a variety of ways to once again engage your customer and strategically utilize your loyalty programs with these new technologies. Understanding how your loyalty program can be so much more than a frequency card is the first step to leveraging repeat customers and increasing your bottom line.

The hard part is getting customers to tell their friends, family, and co-workers about your location.  Even harder is tracking referrals so that you effectively reward only successful referrals.

This post highlights two easy methods that increase the possibility of referrals, and one proven, advanced method that has shown to not only incentivize referrals, but also provide you with the ability to track and reward successful referrals (this method utilizes the RewardMe product).

1. Shares through social media

The common course of action is to place a Facebook or Twitter icon on the home page of the company website in hopes that a customer will become a fan on Facebook or follow on Twitter.  Surveys have shown that less than 8% of customers that eat at a location have actually been to the company’s website; furthermore, 40% of customers actively follow a brand on Facebook or Twitter, showing that brands are missing out on potential social media awareness.

Take a look at the images below – this is just not enough to get people to share your brand through social sites.

How to drive more Facebook Likes and Twitter Follows

Franchises must actively promote Facebook and Twitter at the location.  The easy, simple way to do this is to display print materials that promote Facebook and Twitter through posters and other table signage.  Make sure to include the Facebook and Twitter url on the signage so that the customer can quickly explore it through his or her mobile device.

A proactive location will showcase a laptop or tablet where customers can sign up to Facebook or Twitter and follow the company.  How to do this effectively:

1. Set a laptop or tablet with a lock at the counter of the restaurant
2. Allow your customers to sign in and follow, fan, and post items to your pages
3. Open a browser and have two tabs open: One to your Facebook URL and the other to your Twitter URL

2. Referrals through events and holidays

It’s very important to capture the following customer information:

1. 1. Name
   2. Phone number
   3. Email
   4. Birthday

These 4 pieces of information provide the cornerstone to a referral management process.  For example, you can run a promotion for a customer’s birthday that drives 5 of his or her friends to your location:

“Happy Birthday Sam! We’d like to invite you and 5 of your friends to eat at our location and each get a complimentary dessert! Just present the following coupon code to the cashier: ######”

Not only do you get your customer back to your store to spend money, but you also drive your customer to tell 5 of his friends to eat at your location.

Another example is to send the following message to your customers during Super Bowl Weekend:

“Having a party for the Super Bowl? Order a party platter for the big game and get $5 off your order. Use the code: ######”

Super Bowl parties are usually huge and if your meal impresses, then your customer’s friends will surely order your food for the next game or party.

3. Advanced referral through RewardMe

RewardMe offers a robust friend-referral system that takes advantage of mobile numbers and game-mechanic incentives.

The following is a common referral incentive that customers set up: Refer 5 friends to our location and receive a free smoothie.

Process and how it works:

1. 1. Customer uses his phone or client website to send a custom invitation to his friends via their mobile number
   2. The message can read, “Hey, it’s Jun! I highly recommend the burger at Mooyah Burgers! Lets go eat there next week.”
   3. When the friend enters his number on the RewardMe tablet at the location, we register that the referral was successful
   4. Once the customer has successfully referred 5 friends, he earns a free smoothie

The process is easy, fast, and convenient for customers.  Give customers an incentive to do something and they’ll do it just to get the reward.

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Make it easy for your customers to share their experience, the food, and their love of your business with their network.  The easier you make the share, the more shares you’re going to get.

Customers’ happiness should stem from employees’ happiness, and not just because of the “happiness is contagious” adage — ever notice how much more generous you are when you’re happy? Everyone’s had a bubbly waitress once in their life it seems. I remember the few truly bubbly waitresses I had; her bubbliness made us ask her for desert recommendations just for fun (after which we joked that she was most likely just upselling us, “but that’s okay because she’s nice”). I imagine (hope, really) that her manager treated the employees of that business well, and it shows in her happiness. As a result, we left a large tip and ordered loads of food in exchange for good times and the extra dollars. The days when businesses paid their employees minimum wage should really be over — because it simply isn’t economically or socially sustainable.

At the same time, keeping employees happy isn’t just about a high wage or lots of flair on your suspenders, it’s about having a culture of respect from both sides and about pursuing a mission your employees care about. There’s a lot being done these days to source food locally, to be green, and to use technology to make things better in industry. These are fantastic in and of themselves, but we shouldn’t forget that it’s the employees we interact with that make a business successful just as much as their product. Treat your employees well, they’ll treat your customers well, and in return your customers will treat your business well.