Monthly Archive: May 2016

Fed Up Customers Can Hurt Profits

thmb_wait_line_restaurant_turn_sign_MBSometimes It Only Takes A Smile and a Friendly Word

Businesses can’t afford to underestimate the influence customer service has on their bottom line. One nearly certain way to lose customers is to make them wait too long.

Breaking Point

One survey by Maritz Research asked how long individuals thought was an acceptable wait time at  specific types of organizations. Respondents gave the following average times:

  • Doctor – 81 minutes;
  • Public transit – 22 minutes;
  • Grocery store – 15 minutes;
  • Department store – 6 minutes;
  • Fast food restaurant – 6 minutes;
  • Convenience store – 3 minutes;
  • Bank – 6 minutes.

The following percentages of customers left specific businesses after what they considered an unacceptably long wait:

  • Department store, 78 per cent;
  • Public transit, 64 per cent;
  • Fast food restaurant, 58 per cent;
  • Convenience store, 54 per cent;
  • Medical facility, 50 per cent, and
  • Grocery store, 40 per cent.

Customers indicated there are some simple ways to keep them relatively happy while waiting, such as:

  • An apology for the delay, 82 per cent;
  • A greeting with a smile, 74 per cent, and
  • Updates on their status, 67 per cent.

Polls have shown that more than 80 per cent of customers have left a business because of long waits. The amount of time a customer has to wait is a primary driver of customer satisfaction and should be at the top of your business’s list when it assesses how it can better serve consumers.

One survey also showed that bad customer experiences tend to have a ripple effect where customers who perceive negative service are not only less likely to spend money at that business again, but they are also more likely to tell others about their experience.

In a time where shopping research takes place online and people are engaged in social networks to share and collect ideas, businesses risk losing potential customers before they ever set foot in a  store or office.

Knowing that customer service is one of the best routes to a healthy bottom line, here is a management checklist that will help improve your enterprise’s customer-satisfaction ratings:

1. Require executives to personally and regularly serve customers.

By dealing with the public, executives cement relationships with customers or clients and let employees know that service is honorable and rewarding as well as the focus of corporate energy.

2. Survey customers and give immediate feedback.

A customer satisfaction survey can establish performance benchmarks, build relationships, identify customers your business risks losing and can be a catalyst for enhancing overall satisfaction. Surveys should be short, taking no longer than 10 minutes to complete. Ask concise rather than open ended questions and mix topics to force continual thinking about different subjects.

When you get enough results and spot trends, let your employees know. Moreover, be sure staff quickly  hear comments about problems or positive results. This lets them make the connection between their behaviour and customer attitudes toward the company. A quick response to customers shows them that your organization cares and rewards them for taking the time to speak up.

3. Hire people who have a service attitude.

Some people simply enjoy serving others and that urge dominates their personalities. These individuals make the best salespeople, present a good image for your business and help your enterprise grow.

4. Cultivate service heroes.

Your company’s staff and management meetings should regularly feature examples of outstanding customer service. Public praise creates heroes and encourages excellence. Give employees the power to do whatever has to be done to make a customer’s experience pleasant. There will be occasional failures but those are opportunities to find new strategies. When employees deliver the goods, reward them. One way is to link compensation to employee contributions. Companies that do not reward innovation are not likely to be encouraging outstanding service.

5. Devote as much time to service training as you do to technical and procedural training.

Getting it right technically doesn’t count if the customers feel they haven’t received a commitment to a continued relationship. If customers feel they received poor service then they did receive poor service. Your employees represent you, your company, and your brand. Working with customers is the most important thing they will do. Give them the tools by giving them sufficient training. Never let an untrained employee have customer contact.

6. Make customers your only concern.

Let them think you have all the time in the world — even when you don’t. A relaxed tone of voice and patience go a long way toward keeping them happy, even when they don’t get what they want. Take their complaints seriously — they don’t care if you’ve heard the problem before, they want your complete attention. Studies have shown that as many as 90 per cent of customers whose complaints are resolved will purchase again.

7. Keep raising the bar.

Successful organizations continually raise the bar. If your entire enterprise isn’t pushing to do better today you risk being left behind. Create an atmosphere of excellence at your enterprise by spreading the word that everything your company and its employees do must be the best and that you won’t accept less.

8. Comparison shop.

Visit the competition, see what they are doing and then do it better or differently. Customers have more than one choice, so stay ahead of the curve by asking how you can add value to their experience. When you are a customer, get involved with clerks and service attendants.

9. Keep employees up to date.

Let staff know what new products have been ordered, when they will arrive, what kind of advertising promotions you plan and what business changes you may be planning. The more your employees know, the better then can serve the customers or clients.

10. Stay positive.

When a problem or question arises with a customer, say you will try to resolve it rather than that you can’t do anything about it. If a customer demands something that is against company policy, explain the situation but then offer to help come up with an alternative solution.

Final Thought: Always say thank you. A good rule of thumb is to end every interaction with a word or two showing appreciation. Even when customers complain, you can thank them for bringing the problem to your attention.

Improve the Chances of a Successful Merger

thmb_gears_cogs_fit_engage_interlock_mesh_MBCultural Differences Can Make or Break a Combination

If your company is searching for a merger candidate, focus on a company that will support your business’s core direction and produce measurable returns and outcomes.

Taking a strategic focus means emphasizing risk management and ensuring that your due diligence is well directed.

 Categorizing the Risks
After brainstorming possible negative events that could crop up before, during and after a merger or acquisition, it can help to arrange them according to the damage they could cause:

  1. Catastrophic: Scenarios or potential demands from sellers that could kill the transaction before or after the deal is signed.
  2. Booby traps: Unexpected events that could kill the deal if they happen.
  3. Run of the mill: Scenarios that are likely to happen but you probably have the resources to deal with them.
  4. Irritants: These events aren’t likely to occur but if they do, your company will have no problem responding.

Otherwise your business combination could fail to add value, provide insufficient return on the money spent on the deal or suffer a drop in productivity, at least in the first four to eight months after the transaction.

In many cases, failures occur in transactions that make perfect business sense. The difficulty is that due diligence often concentrates only on the financial and legal implications of a proposed transaction. Less time and effort goes toward such critical people issues as corporate cultures, values, work habits and attitudes.

Cultural Due Diligence

These issues are important to the employees of companies on both sides of a combination. Failing to deal with them effectively and early on can result in crucial employees leaving and productivity slowing. In extreme cases the corporation may wind up unable to function effectively.

Cultural evaluation has become a high priority when a merger or acquisition is on the agenda. Among other qualitative factors, having a professional conduct one of these evaluations will reveal each company’s:

  • Values, management style, work environment and founding philosophies;
  • Strategic visions to determine areas of compatibility and synergy; and
  • Assessments of employees, customers and other stakeholders, and evaluation of areas of common ground and avenues of potential conflict.

While no integration between two organizations is ever seamless, significant obstacles can be identified early, making it easier to determine if potential culture clashes might outweigh the benefits.

Cross Border M&A: Bridging the International Divide

Complex, cross-cultural factors need to be carefully examined. Cultural differences and the potential benefits of cultural diversity need to be evaluated for each organization.

Specialized knowledge is often needed to deal with sensitive areas, as the companies need to forge understanding across cultural divides. CEOs who have completed cross-border mergers consistently note that the effort for cultural integration was much greater and considerably longer than they had anticipated. This stems from several issues:

Political sensitivity, which discourages overt references to national differences to avoid causing offense. This can be carried to such a degree that people become even more uncomfortable with their new colleagues than if they felt free to express their feelings and what they expect after the merger is completed.

Lack of understanding of the rules of business behaviour in different cultures. It is important to understand the behaviours they will encounter in a newly purchased business. For example, and very broadly speaking, Americans are not as formal as Europeans, the Japanese find form and ceremony to be important, Germans tend to admire certainty, and Swedes prefer consensus rather than executive decisions.

Strong reactions to the potential loss of a national icon. When U.S. conglomerate PepsiCo was rumoured to be planning a takeover of French food giant Danone, the government stepped in to draft a law to protect companies in “strategic sectors.” This type of reaction strongly supports researching potential local responses and coming up with plans to ensure they won’t hurt the new corporation’s ability to operate.

Difficulties caused by language barriers. Communication can be significantly hindered when companies from different countries meld. But trying to enforce the acquiring company’s native tongue can spark resentment and bring cooperation to a snail’s pace. Some multicultural companies have resorted to adopting a neutral third language as the official corporate language.

It used to be that the financial issues of a merger were thought to far outweigh the value of the qualitative issues. But companies have learned the importance of focusing on becoming an integrated entity where all the divergent pieces eventually fit together.

Consult with your advisers to discuss this type of planning. It can help your business be more confident that the transition will be a relatively smooth one.

Get These Financial Decisions Right

Decisions, decisions and more decisions. Will you ever get our finances right?

Of course, you need to constantly deal with the details: paying bills on time, reconciling bank accounts or getting a late charge waived.

While those things need to be done, you also need to pay attention to your overall financial picture to ensure you are travelling a sound course. There are five basic decisions that determine the course of your financial life. In addition, you must take steps to prepare for a financial emergency (see right-hand box).

Prepare for EmergenciesMaking arrangements to handle financial emergencies will prevent them from adversely affecting your financial goals.

Make sure to have:

  1. An emergency fund covering several months of living expenses. Besides cash, that fund can include readily accessible investments or a line of credit.
  2. Insurance to cover catastrophes.
  3. Someone who can step in and take over your finances if you become incapacitated.

1. How you earn a living

We all want to enjoy our work, but within those parameters you can also choose jobs that pay more than others. Your income drives all your other financial decisions, so investigate your options.

  • Are you being paid a competitive wage with competitive benefits? Even if you aren’t interested in changing jobs now, pay attention to what is going on in your field.
  • Do you have an outside interest or hobby that can be turned into a paying job? This could be a good way to supplement your current salary. It may also turn into a part-time job or business after retirement.
  • Can you get some additional training to help secure a promotion or qualify for another job? Read up on what jobs are expected to have the highest job growth rates and/or highest salaries over the next few years.

If you don’t enjoy your current job, you have even more incentive to implement these suggestions.

2. How you spend

The amount of money left over for saving is a direct result of your lifestyle choices, so learn to live within your means. To get a grip on your spending, analyze your expenditures and set a budget:

  • Prepare a budget to guide your spending. Few people enjoy setting or sticking to a budget, but inefficient or wasted expenditures can be major impediments to accomplishing your financial goals. A budget gives you a road map for spending your income. Start by setting a budget for a couple of months, tracking your expenses closely over that time. You can then fine tune your budget for an annual period.
  • Look for ways to reduce your spending. Take a hard look at all your spending and cut out items that aren’t really necessary.

3. How you save

You should be saving a minimum of 10 per cent of your gross income. But don’t just rely on that rule of thumb. Calculate how much you need to meet your financial goals and then determine how much you should be saving on an annual basis. If you can’t seem to save that much, go back to your spending analysis and cut your spending.

4. How you invest

The ultimate size of your investment portfolio is basically a function of two factors – how much you save and how much you earn on those savings.

Even small differences in return can significantly impact your investment portfolio. Typically, investments with potentially higher rates of return have more volatility than investments with lower rates of return.

While you don’t want to take on excessive risk, you also don’t want to leave all your savings in investments with little growth potential. Your portfolio should contain a diversified balance of investment categories, based on your return expectations, risk tolerance, and time horizon for investing.

5. How you manage debt

Before you take on debt, think about what affect it will have on your long-term goals. If you are already having trouble finding money to save, how will it get any easier with more debt and interest to pay? To keep your debt in check, make some strict rules:

  • Mortgage debt is fine as long as you can easily afford that home.
  • Be careful about taking equity out of your home in the form of a loan. You might want to set up a home-equity line of credit for emergency use, but then make sure it is only used for emergencies.
  • Never purchase items with debt that decrease in value, such as clothing, vacations, food, and entertainment. If you can’t pay cash, don’t buy them.
  • If you must incur debt, borrow wisely. Make as large a down payment as you can. Consider a shorter term for loans. Since interest rates can vary widely, compare loan terms with several lenders. Review all your debt periodically, to see if less expensive options are available.

Making the right choices for these basic financial decisions can help put you and keep you on the right financial course.

Tax Clutter: What Can You Toss?

What a coincidence! Once the general tax-filing deadline passes and you file your return, spring cleaning begins.

Man Shredding

As you wash winter off your windows and start planting your garden, you’ll likely want to clear out some of the clutter of your tax paperwork. Before you head to the paper shredder, though, make sure you’ve saved the essential documents that can not only protect you during an audit, but also help you collect a future refund.

The last thing you want is to be caught empty-handed if Canada Revenue Agency (CRA) contacts you or your business about an audit or a clarification of items on your recent or previous tax returns.

The CRA states: “As a general rule, [taxpayers] must keep all of the records and supporting documents that are required to determine your tax obligations and entitlements for a period of six years from the end of the last tax year to which they relate. The six-year retention period under the Income Tax Act begins at the end of the tax year to which the records relate.”

Statutory Lengths of Retention

Five pieces of legislation affect tax records and how long they must be retained:

  1. The Income Tax Act,
  2. The Excise Tax Act,
  3. The Canada Pension Plan Act,
  4. The Employment Insurance Act, and
  5. The Air Travellers Security Charge Act.

These laws govern the retention, storage and disposal of all tax-related documents. The records must be supported by source documents. Moreover, the laws put the burden of proof on you in a tax audit, even if you hired a bookkeeper to do your accounts and a tax professional to prepare your return.

The Income Tax Act requires you to keep books, records, accounts and vouchers for at least six years from the end of the last taxation year to which they apply. So it isn’t the year of the transaction that’s important, but rather, the year the transaction is claimed on a tax return. For corporations, the fiscal period is the financial year-end. For individuals, it is the calendar year. So, after January 1, 2016, the CRA doesn’t require you to keep income tax records for your 2009 tax year or earlier years. You must keep 2010 records until the beginning of 2017.

The Excise Tax Act requires GST/HST registrants to maintain “adequate records” for six years from the end of the related tax year. Under the Employment Insurance Act and Canada Pension Plan Act, the retention period begins at the end of the calendar year. The Air Travelers Security Charge Act generally requires records to be kept for six years after the end of the related tax year.

Special circumstances require these retention periods:

Notices of objection or appeal. Generally, you must retain records until the situation is resolved or the time for any further appeal has elapsed, whichever is later.Corporate mergers or amalgamations. Retain business records as if the new corporation were a continuation of each of the original corporations.

Corporate dissolution. Keep for two years following the dissolution records and supporting documents that verify tax obligations and entitlements.

Unincorporated wind-down. Keep for six years from the end of the taxation year in which the business ceased to exist.

Death. Trusts or legal representatives of deceased taxpayers can destroy records after receiving government clearance certificates to distribute any property under their control.

Some records and supporting documents that must be kept indefinitely are:

  • Acquisitions and disposals of property,
  • Share registry, and
  • Historical information that would have an impact on the sale, liquidation or wind-up of the business.

Records must be kept in Canada unless you receive government permission to store them elsewhere. Documents kept outside the country and accessed electronically aren’t considered valid records and books of account. (Quebec has specific rules about where records can be stored and transferred if the files contain personal data about a resident of the province.)

Types of Records

In general, the CRA doesn’t specify the records and books a business must keep, but what you do retain must clearly allow for the determination of taxes payable and of taxes or other amounts to be collected, withheld or deducted. Supporting documents must be available to verify the information.

According to the CRA, supporting records may encompass:

  • Sales invoices, purchase receipts, contracts, guarantees, bank deposit slips, cancelled cheques, credit card receipts, purchase orders, work orders, delivery slips, emails and general correspondence related to transactions.
  • Minutes of director and shareholder meetings, as well as share ownership and transfer records, special contracts, agreements, share registers, general ledgers, special contracts and agreements, investment records, and fixed asset and depreciation records used to set the capital cost of assets.
  • Personal bank statements and cancelled cheques, personal savings account passbooks and detailed identification of deposits into personal accounts.
  • Accountant working papers used to determine obligations and entitlements.
  • “Any other thing containing information, whether written or in any other form.”

Access to Documents

The records and source documents must be in a readily accessible format, whether paper or electronic.

Access to electronic records means direct, physical contact to the medium on which the record is stored. Computerized records must be easily converted into an electronically readable format and must be kept even when your company has a hard-copy version.

Remember, electronic records are particularly vulnerable to damage or accidental destruction, so it’s essential to back them up regularly and to keep them safely stored.


In some instances, the CRA may allow you to dispose of records early, but you must obtain permission. This can be accomplished by submitting a Request for Destruction of Books and Records, or by submitting a written request to the director of the local tax service office. The letter should include:

  • A list of the documents to be destroyed,
  • The tax years involved, and
  • The circumstances that justify early destruction.

For example, a taxpayer serving as an estate executor may want to dispose of records because the distribution of assets has been completed and a tax clearance certificate has been issued.

Be Cautious

When your company does toss documents, federal law and some provincial statutes require that records containing personal data be destroyed. If the records contain only business data, there’s usually no legal requirement for destruction, but it’s a prudent move. Careless disposal of confidential documents could lead to problems.

If you have questions, consult with your accountant to be sure you keep what is legally required.

Alberta Wildfires: Tax Relief and Enhanced Donations

As drones flew over Alberta searching for clues about what caused the devastating wildfires in the Fort McMurray area, Canada Revenue Agency (CRA) announced it would offer tax relief to those affected.


The move is part of CRA’s standard policy of immediately evaluating measures that can be taken to help taxpayers when disasters occur. It’s been reported that around 90,000 people were forced from their homes and more than 2,400 structures were burned by the fires, at least 10% of Fort McMurray’s buildings.

The steps the government is taking to ease the tax burden of those affected by the fires are:

  • Immediately suspending all collections, audit-related activities and administrative correspondence,
  • Cancelling all penalties and interest for those who can’t file their tax returns or pay amounts they owe,
  • Setting up telephone agents who can request relief for taxpayers and provide advice relating to lost, destroyed or damaged records (individuals can call 1-800-959-8281; businesses can call 1-800-959-5525), and
  • Working with Canada Post to ensure that taxpayers expecting a tax refund or benefit payment have secure access to their mail following the suspension of delivery to Fort McMurray (visit Canada Post service alert webpage for more information).

Your Donations Are Now Worth More

In addition, Prime Minister Justin Trudeau announced the federal government will match individual charitable contributions made from May 2 to May 31 to the Canadian Red Cross in support of the Fort McMurray disaster relief efforts. The province of Alberta is also matching Red Cross donations. “As a result, for every dollar donated by Canadians, the Red Cross will receive a total of $3,” noted Prime Minister Trudeau.

“The outpouring of goodwill and compassion we have already seen from Canadians across the country has not only been inspirational, but stands as a testament to who we are as a nation,” he added.

Canadians wishing to assist those affected by the disaster can also donate to registered charities other than the Red Cross. Consult the CRA Charities Listings to find eligible organizations. Your donations, of course, come with tax credits.

Insurance Claims

In addition to tax relief and donations, individuals and businesses in the devastated area are filing claims with their insurance companies. Many insurers have sent mobile emergency centres to the area to take claims and hand out cheques for emergency living expenses.

The damages policies cover can range from the total loss of a residence to the costs of cleaning smoky carpets and replacing food in a refrigerator. The amounts paid for fire damage generally will be calculated based on such factors as the type of damage, value of goods in the house and the type of policy.

If you, or someone you know, are preparing to claim losses from this disaster, here are some tips from the Insurance Bureau of Canada:

  1. You don’t have to file a claim immediately.

    A myth circulating is that if you don’t file immediately, you won’t get anything. The claims process begins when the amount of damage is known. For many, the extent of the damage they’ve suffered from the wildfires won’t be known for some time. Nevertheless, they can still file their claims in the coming weeks.

  2. If you have insurance, you’re probably covered.

    Most home and business insurance policies cover fire damage.

  3. Check in with your insurer on a regular basis.

    Many insurance policies provide coverage for reasonable additional living expenses, which people are entitled to as soon as they’re evacuated. Getting in touch with your insurance rep as soon as possible will help you get the process started quickly.

  4. Know what’s in your policy.

    You need to understand what you’re entitled to. Typical home insurance policies are comprehensive, basic/named perils, broad and no frills. Wording and what’s covered in individual policies vary from one insurer to another. Home insurance policies include personal liability coverage and some comprehensive policies even cover damages to vehicles.

  5. Keep detailed records.

    Keeping receipts and other records might be the last thing on your mind, but save you a lot of headaches down the road when you’re dealing with your insurer. Buy a small notebook and jot down everything, from meals and cleanup costs to travel and gasoline.

    You’ll need to provide a reasonable list of the contents of your home. Write down items as soon as they occur to you. Consider walking through stores looking for items that match your own and taking pictures. If possible, collect receipts, photos and other proofs of purchase.

  6. Plan to prove damage if you need to rent a car.

    According to the Insurance Bureau of Canada, if there’s no proof a vehicle is damaged, you can’t claim a loss. One suggestion is to use some of the living expenses your insurer pays to rent a car until you can prove damage. Save the receipts and talk with the insurance company claims adjuster when things are settled.

And of course, consult with your financial advisers. They can help you file forms with the CRA and insurance companies and offer advice for getting through this terrible time.