Archive: Operations

Foil Fraud at Your Enterprise

thmb_hr_practices_hand_cookie_jar_savings_petty_cash_take_amMonitor, Verify and Verify Again

Over the past decade or so, well-publicized scandals involving Enron, Parmalat, Royal Ahold, WorldCom and other companies have prompted corporate officials, lawmakers and regulators to insist on beefing up internal auditing controls and risk-management operations.

Asset Misappropriation in Canada  

Ninety per cent of occupational fraud cases in Canada involve asset misappropriations, according to a study by the Association of Certified Fraud Examiners.
Those misappropriations had a median loss of $200,000; 38.9 per cent had a corruption component with a median loss of $250,000; 11.1 per cent involved fraudulent financial statement schemes with a median loss of $1,075,000.

Cash is by far the most frequently misappropriated asset, accounting for 86.4 per cent with a median loss of $198,500. That loss is nearly double the non-cash losses, which totaled a median $100,000.

This finding is most likely explained by the liquid nature of cash as opposed to inventory, equipment and other non-cash assets, according to the study, entitled Detecting Occupational Fraud in Canada.

And yet, fraud still occurs at companies, despite spending multi-millions of dollars on software and hiring multitudes of risk monitors, auditors and compliance personnel. While you may not want to budget large sums on risk-management, there are some fundamental tools that should never be ignored by any business of any size in any industry. At the top of the list is the most critical canon of forensic accounting:

Every employee must take some annual leave. While employees are on holiday, a co-worker should cover for them. This is a simple step, but it has uncovered many sophisticated frauds and embezzlements.

Employees who process transactions should be taken off their desks at intervals, so that any existing chain of successive falsifications can be discovered and broken. Refusing vacation time is one of a series of behaviours that should be considered suspicious if they arise in conjunction with fiduciary abnormalities. Watch for sudden changes in lifestyle, or buying a larger home, a more expensive car or costly clothing.

Here are five other steps to take to help ensure your business is protected from employee fraud:

1. Update and modify controls: Successful businesses grow and expand, and in the process their internal controls can become outdated or overworked. Be sure to review your company’s controls on a regular basis to help ensure that they are still adequate.

2. Set up checks and balances: Your company doesn’t have to be a world-class financial institution to have complex transactions that can involve several reports rather than a single document accounting for all aspects of the deal. Be certain that your company enforces disciplined reporting of facts and information and reviews them from all angles. Make sure all relevant parties — traders, accountants, risk managers and the people who run the business — regularly and rigorously review everything. And, perhaps most importantly, check reports randomly rather than on a regular schedule.

3. Vigilantly monitor internal controls: Part of monitoring controls should involve periodic testing to see how easily your company’s systems and procedures can be penetrated. And when designing security systems, always assume that every user has the potential to be a criminal. A trusted insider who learns the inner workings of the company network, security specialists warn, can do some of the worst damage.

4. Frequently review passwords:
 Make staff aware of the importance of keeping passwords confidential and secure. Limit employee access to information, and require use of passwords that are not easily guessed. Some forensic specialists recommend changing passwords at least every 30 days. Regularly audit systems that don’t require passwords.

5. Trust no one: While you don’t want to run your business like a prison, never assume that because an employee is performing “junior” work that there is no chance for fraud. When you are confronted with questions about any employee’s suspicious behaviour, take action immediately and double check what you discover. Verify everything. People tend to ignore suspicious activity, rationalize decisions to not take action, or misguidedly think that no single individual is in a position to create any damage.

Inside Job: Countering Cash Skimming

thmb_sales_cash_drawer_register_retail_money_teller_change_amLike Taking Milk from a Baby

Cash skimming is one of the most common and easiest types of occupational fraud, regardless of an organization’s size. Fortunately, there are relatively uncomplicated ways to fight it.

Look for These Red Flags
Regardless who skims money, the effect on your enterprise remains the same: Revenue is lower than it should be while the costs of producing it remain the same.
There are warning signs that indicate the possibility of fraud at your organization. Here is a checklist of tell-tale signs. They don’t necessarily indicate fraud, but the more red flags the greater the likelihood skimming is occurring at your business:
1. Declining or flat revenue.
2. Increasing cost of sales.
3. Increasing or excessive inventory shrinkage.
4. Narrowing ratio of cash sales to credit card sales.
5. Shrinking ratio of cash sales to total sales.
6. Increasing ratio of gross sales to net sales.
7. Discrepancies between customer receipt and company receipt.
8. Customer complaints and inquiries.
9. Forged, missing or altered refund documents.

The term comes from the fact that money is taken off the top, the way cream is skimmed from milk. The reasons cash skimming can be so easy — and tempting — is that the money is often stolen before it’s ever recorded. That means there’s no need to alter accounting records or convert stolen goods into cash. There are many variations on the skimming theme, and two of the most common are:

1. Unrecorded sales: A salesperson sells goods or services to a customer and collects the payment, but doesn’t ring up the transaction. This is sometimes accomplished by opening the business on weekends or after hours and pocketing all or most of the cash receipts.

Here’s another example that doesn’t involves sales: An apartment house manager collects rents in cash for an apartment that is shown as being vacant.

2. Understated sales: An employee records a sale for less than the actual price and pockets the difference. In another version, the employee records a discount that the customer never receives and pockets the amount of the discount.

But skimming can also target refunds and accounts receivable. Those variations, however, require some alterations to books and records to avoid detection. For example, in receivables skimming, the thefts are often those that are simply unrecorded on the books. When funds are diverted from accounts receivable, the amount owed can be reduced on the books by write-off schemes.

Since any employee who comes in contact with cash can skim money, the usual suspects are salespeople, cashiers, mail clerks, and bookkeepers. But keep in mind that senior executives can easily override controls and skim cash. When senior management is involved the losses are usually much larger.

The key to preventing this type of fraud is to set up controls. How you go about doing that depends on the number of employees and the complexity of your enterprise’s accounting system.

Even a very small business can have effective internal controls that may consist simply of the owner carefully paying attention to a few cheques and keeping tight controls over employee access to cash and other assets. In any case, employees who handle cash should be bonded.

At the top of the list of effective ways to battle skimming is to segregate employees’ responsibilities. This means being sure that:

  • The person receiving payments and opening mail doesn’t also record incoming payments. Cheques that are received should be stamped “for deposit only”.
  • Cash receipts should be sequentially numbered, and all receipts should be accounted for.
  • A list of money, cheques and other receipts received in the mail should be prepared by someone other than the bookkeeper or individuals who record payments.
  • Bank deposits should be made by someone who does not receive cash and cheques. The same applies to custody of deposits.
  • Individuals with signing authority on bank accounts should not be responsible for bookkeeping or reconciling the bank accounts.
  • Cash refunds and discounts should require approval.
  • Cashiers should not have access to bookkeeping records, bank statements, incoming mail, or customer statements.

These controls can be put into effect with as few as three people. If you are the owner and the bookkeeper, only two people are needed to put these controls into effect.

Talk to a professional about other types of fraud and how to protect your company’s bottom line from less-than-honest employees.

Like Taking Milk from a Baby

Outsourcing: Eight Steps to Help Mitigate Risks

thmb_operations_travel_destination_international_business_amAnticipate Problems With Careful Planning

The outsourcing of business processes has helped numerous companies improve their financial performance, as well as increase customer satisfaction. In extreme circumstances, outsourcing can literally ensure a company’s survival.

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However, it can involve a number of risks. In order to determine if outsourcing makes sense for your organization, consider taking the following steps:

1. Identify and document your expectations regarding an outsourcing relationship. For example, by what amount would you like to reduce operating costs? Do outside providers have the expertise or skills that your company does not possess in-house? Is outsourcing consistent with your company’s business model and overall strategy?

2. Prepare a detailed inventory of the processes and procedures that you plan to outsource. While gathering the information, you may identify inefficiencies that need to be addressed before the processes can be outsourced. Alternatively, you may decide that inefficient or ineffective processes would be better outsourced, knowing that they will need to be refined by the provider. In any event, being aware of what you plan to outsource, as well as the state of those processes, is key to a successful outsourcing.

3. Prepare a detailed request for proposal (RFP) that identifies all requirements that need to be met by the provider. This can also serve as the reporting framework once a provider is engaged. In addition to preparing an RFP to be circulated to potential providers, consider documenting the attributes that a “perfect” provider would possess. The profile should include the location, industry experience, type of customers served, level of employee skills and the technology employed.

4. Once a short list of providers has been identified, request references from customers that have worked with the providers for one, three, five and if possible, 10 years. Immediate cost savings from an outsourcing relationship can be straightforward to capture. However, maintaining and improving on those savings over time is considerably harder. Talking with companies that have experience working with the providers can help your company gauge an outsourcing company’s ability to deliver sustained improvements

5. Ensure that the contract with the provider contains sufficient flexibility to respond to changes in the economic environment. Also, incorporate incentives for the provider to improve performance over time. By offering incentives in the contract, you can dramatically increase the chances the provider will meet the expectations. Just as importantly, incentives should reward a balanced approach. For example, invoice processing time should not be rewarded at the expense of accuracy.

6. Establish a cross-divisional team to consider the risks that can result from engaging an outsourcing firm. Your company’s team could include representatives from operations, legal, accounting, finance, human resources, security, fraud and corporate communications etc. The type of risks that can result from an outsourcing relationship include fraud by the provider’s staff members, interruption in service due to terrorist activity, political instability and corruption in the location, and backlash if jobs are transferred overseas. Depending on the size of the proposed outsourcing relationship, sub-teams may need to be created to address specific issues, for example, the impact of outsourcing on employee morale.

7. Find out what tax implications are involved in the relationship. This could involve the rules for independent contractors, if outsourcing locally, or the tax laws of another country, if you are shipping work overseas. Your tax adviser can help ensure your company is in compliance with applicable laws.

8. Determine the infrastructure needed to support the provider once the outsourcing relationship commences. For example, do you need to assign company personnel to work on-site at the provider’s offices? If not, how often do company personnel need to visit the provider’s operations? How much will it cost to send staff to the provider’s location?

Outsourcing can provide considerable savings. But as you can see, it is not without risk. The steps noted above can help your company navigate the process and deliver sustainable long term savings that directly improve the bottom line.

The U.S. Patriot Act and Canadian Data Security

Mention hosting data remotely to most people, and you will hear expressions of various concerns, such as:

  • Data might be inaccessible at times due to Internet failure;
  • Unauthorized people might see the information; orGovernment agencies could gain access to your personal or business data.

lores_DOJ_US_Department_Justice_Seal_Logo_goldAdd the U.S. Patriot Act to the mix and the reactions and anxiety are likely to become even stronger. Many companies and individuals fear that the American law gives the U.S. federal government sweeping powers to look at any data at any time for any reason. Before making a decision to embrace a cloud computing solution that involves hosting data in the U.S., you should separate myth from reality.

First, it is critical to be aware that today’s information technologies make it easy for organizations and individuals to exchange information quickly around the globe. This transborder data flow is becoming increasingly popular as both companies and governments take advantage of outsourcing.

In today’s global economy, suppliers can be located anywhere. Even if a domestic supplier is chosen, it may have offices located in other countries. When a supplier is hired to administer personal information and any parts of its operations, including subcontractors, are outside of Australia, the laws of the other countries may be applicable to information stored or electronically accessible in the foreign country. If a company located in the United States or with U.S. connections is hired, then the U.S. Patriot Act may be applicable.

That legislation primarily extended to anti-terrorism the provisions that originally were used simply to deal with typical criminal investigations. The law permits U.S. law enforcement officials to seek a court order giving them access to the records of a company or individual, sometimes without the suspect’s knowledge. Any organization with a presence in the U.S. or controlled by a U.S. business may be subject to these court orders and compelled to comply with the warrant.

In some circumstances, the law may have made it easier for the U.S. government to gain access to personal data. It did not, however, “fundamentally alter the right of the government to that data in those circumstances,” according to an article written by Jeff Bullwinkel, Associate General Counsel and Director of Legal & Corporate Affairs, Microsoft Australia. In other words, the U.S. government has long had the ability to seek access to personal information in pursuit of legal investigations.

How does the U.S. Patriot Act affect American government access to information that is stored outside of the U.S.? If the data is under the control of a U.S.-headquartered company, the government can use the law just as if the information were stored inside the U.S. If the company is not an American company the U.S. Patriot Act does not apply, although there still are ways the U.S. can gain access to the information it is seeking.

The U.S. has long had many cross-jurisdictional agreements that allow law-enforcement agencies in one country to gain access to data stored in another country. Government agencies in every country at some time have legitimate needs to access information to enforce their nation’s laws. Increasingly, that information is stored in foreign jurisdictions. While different laws and international agreements help facilitate access to this data, both domestic and some foreign laws maintain strong protections.

Deciding where to store your data has become increasingly complex as the options have expanded from storing data on a computer you or your business directly controls to sending the information into the cloud and storing it on some server remotely located anywhere on the globe. Wherever you decide to store information, be certain that appropriate measures are in place to protect that data from unauthorised access.

Take the time to become informed about the pros and cons of the many places and methods available for storing data. Consult with your advisers to learn how various laws may or may not protect your information and then make an informed decision that is within your comfort zone.

Prevent Data Leaks at Your Organization

Staunch Electronic Leaks

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Just as soldiers and government employees can electronically download and distribute secret and confidential information, so can employees who have access to electronic data, in any workplace.

Today’s digital storage of information and electronic communication simply makes it easier and faster to disclose substantially more. Some individuals who transfer confidential, private and secret information for worldwide dissemination may be motivated by noble intentions. They believe in the best interest of everyone by blowing the whistle on a company. But the greater risk for private companies comes from disgruntled employees and those about to be fired.

Many of these employees are disengaged from their jobs. Think of them as the employees who are present in the workplace, but absent from their work. Employee disengagement is a major risk for theft and distribution of unauthorized data — especially among IT employees. The more access an employee has to information at your company, the greater the risk.

Warding off Data Theft

There is no absolute 100% secure way to prevent all possible breaches of, theft of, and accidentally unauthorized distribution of private, secret, personal, and confidential information. However, there are many steps that businesses and organizations can take to defend against leaking and other types of data theft and unauthorized information distribution.

Here are ten steps to secure private, personal, confidential and valuable data:

1. Establish and nurture a culture of trust and fairness among employees.

2. Develop hiring procedures that:

  • Attract the kinds of people who want to work for you and who want to perform well in their jobs.
  • Place the people in the jobs they are most qualified to do. By matching the right applicants (those with values and expectations that fit your culture) to the right jobs (that make use of their talents), you increase the chances employees are engaged in their work and loyal to your organization.

3. Tighten internal electronic data access control. Information should be provided to employees only on the basis of need.

4. Destroy, on a regular maintenance schedule, older stored data that is no longer deemed necessary. Consult with your attorney and your accountant to develop guidelines and a schedule so that deletions conform to legal and accounting requirements.

5. Monitor employees’ electronic activity and investigate abnormal behavior. Look for access during non-work hours, large downloads and employees who obtain information that may not be required.

6. Proactively track who is accessing what information on the network. Compare the activity to what individuals should be accessing. Many organizations also scan outgoing and incoming e-mail. Audit the information employees are accessing remotely and the data being turned over to outsiders, third-party individuals, companies and contractors.

7. Overlap the responsibilities of multiple employees, who work with (or have access to) sensitive data, so they can observe each others activities. This would be similar to having two or more employees overlapping in dealing with financial recordkeeping to decrease the opportunities for embezzlement.

Having multiple employees overlapping duties is a must for any organization committed to data security. No one person in the IT team should have sole responsibility for a given system, platform or application. This requires cross-training of individuals and ensuring that the individuals regularly rotate responsibilities.

8. Adopt written policies and procedures about use of, and access to, your electronic and digital equipment and systems. The policies and procedures need to deal with what is allowed, what is prohibited, and the consequences if an employee misuses or wrongfully distributes information, records, and documents. Distribute the policies and procedures to all employees and obtain their signatures verifying they received, read, and understand the policies.

9. State clearly in the policies that former employees will no longer have access to private, sensitive, and confidential information. This especially means that former employees are not given access to employer-issued or employer-owned computers, laptops, other data-bearing devices, or paper documents.

10. Communicate regularly, at least once a year, these policies and procedures to all employees.

Boost Company Success with Performance Measures

lores_project_plan_chart_progress_milestone_strategy_amIf you own a small business, you might consider incorporating performance measures to help it grow and become more successful.

Performance measures comprise aspects of your business that answer a basic question: “What key procedures or operations need to change to ensure our company’s continued success?”

Walmart is a good example of effectively using performance measurements. The company determined that to be competitive it had to streamline purchasing, lower costs and maintain top notch customer service.

The company started using satellite transmission technology to purchase directly from suppliers. That reduced purchasing costs and allowed Walmart to hold just enough inventory to serve its customers’ needs regularly without the cost of maintaining excess stock.

The company also created and hired the famous “people greeters” who welcomed customers as they walked into the stores. The tactics worked — the company successfully trimmed costs and improved customer satisfaction.

Take some time to review the processes that are critical to the success and continued operation of your business. Assess where your business operations can be improved. Most performance measures fall into one or more of the following categories:

Effectiveness: How well does the product conform to company and customer requirements?

Efficiency: How well does a process produce the required output at a minimal resource cost?

Quality: How well does a product or service meet customer needs and expectations?

Timeliness: Are units of work done properly and on time? You will need to define timeliness for discrete units of work, typically based on customer needs.

Safety: How do you rank the overall health of the organization and the working environment of its employees?

You may need to develop additional or different categories depending on the industry your business operates in and its mission.

While this may sound complicated, the process starts out quite simply with these two steps:

  • Review and evaluate how your business is functioning. As the owner you may be too close to the company to be objective about its strengths and weaknesses, so consider consulting with employees and customers for a more objective and accurate assessment.
  • Develop a clear vision of where you want the company to go. Part of this is determining whether you want a company that can simply provide you with a good standard of living in retirement or one you can pass on to your heirs who can expand the business and help it keep up with changing customer needs.

Write down your observations. Many managers understand the direction the company should take but never take the time to record it. Documenting the vision clarifies what the business is for both the employees and the customers. A good company vision can be explained in one sentence. Beauty products company Avon, for example, states it this way: “To be the company that best understands and satisfies the product, service and self-fulfillment needs of women – globally.”

Being aware of the gaps between what the company is now and what you want it to be in the future is critical to determine what actions you need to take. The processes you need to focus on could range from sales through production, but you must know what they are before you can work on closing the gaps between current operations and the future you hope for.

Most successful companies use performance measurements to stay on track and meet their visions and goals. Consult with your managers and advisers to help you measure and monitor key processes and areas at your company.

Restrict Cell Phone Use and Texting While Driving

lores_cell_phone_car_drive_talk_mbIn this wireless age, some people tend to consider driving time as a business opportunity. So using cell phones to call or send text messages is just another way to help boost productivity and swell the bottom line.

And even more ways of being mobile and productive are on the way. Automakers are planning to include more in-dash computers and communications technology that can be accessed with drivers’ fingertips.

But beneath the convenience is an expensive potential liability. Some companies have inserted clauses in their employee handbooks stating that staff members are only allowed to conduct business while using a hands-free cell phone. But that may not be enough.

The Insurance Bureau of Canada has noted that studies show drivers are four times more likely to be involved in a collision while talking on a cell phone. The bureau also noted that in addition to talking on the phone, too many drivers are distracted as they multitask while commuting. The distractions include eating, playing with the CD changer or MP3 player and even reading the newspaper.

Studies have found that hands-free phones are not safer than hand-held devices. Some researchers have found that all types of phone conversations are so distracting that the driver’s mind just isn’t on the road. Other studies have shown that 73 per cent of all cell phone users sometimes talk on their phones while driving, and 19 per cent send text messages.

A Transport Canada study found that drivers performing certain tasks spend more time looking centrally and less time looking to the right. They spend less time checking instruments, and as driving tasks demand more concentration, drivers change inspection patterns and do more hard brake work. The drivers studied were equally distracted whether they used a hand-held phone or a hands-free headset.

Simply put: Phone conversations — particularly about business — can be demanding and stressful enough to keep drivers’ minds off the road.

All of this has led some Canadian companies, including Imperial Oil Ltd. and ExxonMobil Canada, to adopt policies banning employees from making cell phone calls while driving on company business.

Other companies have put restrictions on cell phones, limiting them to hands-free only phones while driving. But that may not be enough.

That’s a start, but there are other steps your company can take to encourage safety and limit liability. Consider adding these factors to a written policy on cell phone use:

  • Issue regular bulletins to your entire staff telling them to use common sense when calling someone on a cell phone.
  • Place a sticker on company-owned cell phones warning that using the phone while driving is dangerous and should only be done in an emergency.
  • Notify all employees that any violation of the company’s cell-phone policy will bring disciplinary action — including termination of employment.
  • Be sure all employees sign your policies to indicate they have read and understand them. Let your staff know the safety issues and laws involving cell phone use.

The provinces have started to tackle the issue. So far, Ontario, Quebec, Newfoundland and Labrador have laws  banning the use of hand-held cell phones while driving. Those laws do not, however, affect the use of hands-free devices. Cell-phone laws also tend to ban texting while driving as well as using hand-held entertainment devices, although it is generally legal to use an MP3 player plugged into a vehicle’s sound system.

But even where there is no specific provincial legislation, a driver who causes a collision by using a cellular phone or who is observed driving unsafely while using the device could be charged under a number of other provincial, territorial or federal laws including, those related to dangerous driving, careless driving and criminal negligence causing death or injury.

Moreover, it might be possible for your company to be sued for vicarious liability associated with accidents involving cell phone use by employees while performing their job duties

Your company may benefit when employees conduct business while they’re in traffic, but you must balance the extra productivity against potential liability and safety.

Fed Up Customers Can Hurt Profits

Sometimes It Only Takes A Smile and a Friendly Word

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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.