Building & Facilities Operations

No one likes delivering bad news.  Especially if that bad news is ambiguous and you know it will lead to several questions that you don’t know the answers to.   When people find themselves in this situation, I think it’s normal to experience stress, and often it causes people to shy away from meeting the problem head on.   “I could make this phone call….or….I could wait until I know more….”

Bad move.  Think about the person on the other end of the phone.  They are also experiencing anxiety and stress waiting to hear from you.  While of course they are hoping for good news, more than anything they just want clarity and visibility into the situation.

Delivering bad news might not be fun, but it’s a weight off both parties’ shoulders.  And while it can be painful, nine times out of ten, the person on the other end will recognize that your intention is to be honest, upfront and informative. It also illustrates that you care about finding a resolution even if you don’t yet have the solution they desire.

When in doubt, grit your teeth, pick up the phone and make the call.  You’ll be happy you did.

I do not mean winning a new customer, which is normally the primary focus of my job.   I’m referring to a recent project where we helped an existing client improve building security and a tenant service related issue, and solidified (secured) our relationship with that client in the process.   This is equally important to the health of any business…keep the clients you have happy.

The brief background on this project involves a client of ours in New York  (a very large, prestigious property) who uses the majority of our operations and maintenance platform, but was not using our visitor manager module.  They weren’t using it because they had previously installed a very expensive custom integration years before we got there that allowed their tenants to pre-authorize a visitor to the building as well as deactivate visitor passes, enroll new employees for access card activation and deactivate terminated employee’s access cards from the building’s security system. While the process worked, it required multiple applications for both tenants and building staff to use.

Additionally, the integrated configuration they had in place required the visitor system provider to make programming adjustments every time their security system provider made a change or upgrade to their system. This proved to be expensive, unmanageable and resulted in multiple system failures. – With a pending new required security system server upgrade coming, building management knew they needed to make a change and asked Building Engines to help.  Thanks to our terrific engineering resources here and a great partnership effort (which I’ll get into) we delivered a solution to the client that eliminated the need for co-managed upgrades and provided their tenants with a single application to use and a far better user experience.

…We also saved the client a significant amount of money over time by eliminating the annual cost associated with the other application.

The security system provider at this property is Lenel, a UTC Company and provider of the technology-leading “OnGuard” system. Pulling it altogether at the property was Henry Brothers, New York’s leading systems integrator.  In addition to being a complex project, what was interesting about this effort is that it required detailed cooperation from these two service providers.   Lenel & Henry Brothers bent over backwards to help us and the client achieve their objective.  The effort went so well that we joined Lenel’s partner program and they recently participated in our Webinar program and delivered an outstanding presentation free of charge to our audience entitled “Integrated Solutions for Enhancing Building Security.”  We find this kind of cooperation to be rare, particularly when the other service providers are larger and the effort doesn’t necessarily represent immediate revenue for them.  We look forward to the opportunity to work with both of them again.

While it’s great to win new business and that emphasis won’t change, helping existing clients and solidifying those relationships with this kind of effort is every bit as important to our long term health.  It’s also rewarding to work with partners who share the same values and commitment to customer care, service and quality work that you do.

In the quest to cut costs and keep overhead to a minimum, it can be easy to lose sight of the areas where a little extra money spent is a very worthwhile investment. It is my wholehearted believe that Customer Service is one of these areas.

We live in a world of technology and globalization, which have brought great advancements for businesses all over the world. Unfortunately, they’ve also brought us such wonders as auto-attendant phone answering systems and Indian-based call centers. It seems the more engrained in technology we become, the farther we get from the personal touches that businesses of the past were built upon. The temptation to buy into these customer service solutions is undeniable. A well trained, educated group of employees is expensive to maintain within the United States, especially when you consider that the same number can be maintained overseas for a fraction of the cost.

That said, I think there is something important to remember that can’t be represented by a spreadsheet or bar graph. As far as your customers are concerned, your service personnel are the face of your company. Their only contact with your business will be through these individuals, and impressions will inevitably be formed from these experiences. By deciding how you will handle inbound customer requests, you are not just making a practical decision; you are also selecting how you will be represented to the public. That said my challenge for you would be rather than focusing on the bottom line, step back and ask yourself – Is my company putting its best face forward?

Earlier this month, Building Engines sponsored a breakfast in Chicago featuring Michael Nenner, Director of Rooms at the Four Season’s Ritz Carlton Hotel as our guest presenter.  This event was part of our Executive Briefing Series which we hold at various cities around the country every quarter.  – Mr. Nenner’s presentation was titled “Be My Guest: Why Hospitality Matters in Commercial Real Estate.”

This was truly one of our better presenters and topics as Mr. Nenner provided a condensed version of the famed “Four Season’s University” course that companies send their executives to from around the world to learn about the customer service program and techniques that have made Four Season’s the brand it is and the Ritz Carlton a winner of the Best Hotel in America award 7 out of the last 15 years.

He provided many entertaining stories of “over the top” customer service as well as detailed examples of how Four Season’s set’s detailed standards for service and measures them at many levels and in great detail.  For instance, one of their most important set of standards relates to cleaning a room.  The Four Season’s room cleaning standard has 247 items!  These include the position of the note paper and pencil on your desk.  – Go to any Four Seasons hotel in the world and you will find the paper and pencil positioned exactly the same way. In addition to the training of their staff to know and perform these standards, Four Seasons has inspectors and inspectors for the inspectors. – It all represents a truly impressive commitment to quality.

The point that Mr. Nenner stressed the most and that ties everything all together is that everything begins with their people. – The Four Seasons hiring and training process is as detailed and well thought out as anything else they do. Sure , the physical property and amenities are important and they have leading systems and technology in place to support their efforts. But, they fully understand that if so much of the value of their brand is dependent on the interaction between staff and guests, then they absolutely have to hire the right people for the job. – People who are positive, upbeat, have high energy, take pleasure in service.

They evaluate people in interesting ways, beginning with the interview when the applicant is filling out paperwork; they’ll send someone into the room and observe the applicant…did they say “hello” and introduce themselves without prompting, interact with the person, or offer them assistance if the person pretended to look “lost?”   As important, if not more so, than the information that they put down in their application, it is this ability to connect with people on a personal level and the desire that makes someone qualified to work at Four Seasons.

At a time in the commercial real estate industry where so much is out of your control, and tenant retention is absolutely critical to survival; Michael delivered a powerful message that customer service is entirely within your control and can make all the difference in the near and long terms.  It takes a commitment to the creation, maintenance and measurement of standards and an understanding of the type of people you need to deliver on those and create your brand of service excellence.

The fact that our country is in the midst of a recession is old news. Since the housing bubble burst – effectively slamming the brakes on the consumption-driven frenzy we had worked ourselves into — you can hardly go anywhere without hearing more about how we, the consumers, are being adversely affected by Wall Street’s mistakes. Fair or not, we’ve learned to cope the best we can. Purse strings have been tightened, and budgets trimmed bare as we, perhaps not so patiently, weather the storm. There are a million reasons to be upset about our current economic situation. I, however, will choose to focus on one of the happier side effects: the rebirth of customer service.

A few years ago, when consumer spending was at its peak, many businesses were experiencing so much success that the focus shifted from “The customer is always right” to something more like “There must be some way to squeeze another buck out of this guy.” Obviously profit has always been the bottom line in business, but it’s safe to say that the emphasis during that period was not to win over customer loyalty with quality products and outstanding service, but rather to get ‘em in the door and get the money in the register. It’s hard to blame business owners for this — when people are lining up on their own, ready to buy, why would you waste any time trying to impress them? Equal blame can be placed on consumers who readily spent beyond their means, accepted lower quality products, and paid fees and surcharges without batting an eyelash. When money is flowing, it flows all too easily.

As we all know, this phase was not destined to last. When the economy faltered and the shockwave hit homes across America, suddenly it didn’t seem so very necessary to have all the newest toys. People realized that maybe those unused gym memberships weren’t worth the $75 a month being pulled from their bank accounts, and that maybe credit card balances racking up 20% interest should be paid down.  Bottom line, we all got a little more aware of where exactly our money was going, and started making smarter decisions about it.

Luckily for us all, knowledge and awareness are the best tools consumers have for insuring that we get what we deserve. Without the cushion of guaranteed customers and steadily climbing returns, businesses have been forced to get back to their roots and woo their clientele the old fashioned way, with high quality products and services. Once the pains of your wallet pinching begin to fade a bit, take a moment to look around and appreciate just how many businesses are competing to win you over. How many deals that were previously unheard of are now at your fingertips. People with money to spend are the new prettiest girl in school, and you should take your time and investigate all the options before choosing a prom date. Sick of waiting on hold to get customer service? Take your business elsewhere and the message will be delivered loud and clear. Any business, especially in the service industry, that hopes to remain viable should be devoting its attention to finding out what their customers want and how they can better deliver. The power, at least for now, is in our hands. Let’s just hope that we can use it wisely.

In the arcane world of tax law, there is an ogre of a rule that has choked a few deals to death.  The American Institute of Certified Public Accountants Statement of Position 97-2 (“SOP 97-2”) provides that a company cannot report revenue as realized (earned) until it delivers the product or service.  In the SaaS world this rule requires that vendors, when charging a blended fee for access to a software systems, show vendor-specific objective evidence (“VSOE”) of value.  VSOE is a method for determining the individual value of each invoiced item within a contract to accurately recognize partial revenue before the entire contract is fulfilled.  Ugh!

So, when a SaaS company sells licensed software on an annual contract, the fee must be separated into its various parts (license, set-up, service, hosting, etc.) and recognized ratably over the entire year.  The revenue collected must match the timing of the service provided for the vendor to accurately recognize the revenue according to GAAP and SOP 97-2.   Hence, the first month’s revenue for the license fee can be recorded as current revenue, but the later month’s revenue must be reported at deferred revenue.

So why does that matter?

Take the case of an unnamed publicly traded SaaS company seeking to sell licensed access to its enterprise-level product at hefty price point.  The sale to a very interested and willing prospect was likely to occur near the end of the sales quarter.  Hobbled by the laws of revenue recognition, the SaaS vendor could not “recognize” the fat tranche of newly booked revenue in the near term without providing VSOE.   Assuming the SaaS product was well designed and easy to set up and use, VSOE for revenue occurred as the new customer accessed the system over time – consequently delaying revenue recognition until later quarters.  Not good news if you are publically traded company when end-of-quarter sales numbers directly affect your market value.

Seeking to front load that revenue and, thereby, make itself look more profitable, the SaaS vendor chose to “locate” more of the overall revenue in the near-term by front-loading the professional services fee and discounting the ongoing license fee under the argument that the services required were very important to a successful launch.  To warrant a high fee, the vendor jacked up its per hour pricing.  The prospect balked.  It’s understanding of the product, realized through many demonstrations, was that easy to deploy and easy to use.   The salesman had used that premise all during the sales cycle.  When queried by the prospect about the large professional services fee, the vendor contradicted the core value upon which it had originally interested the prospect – ease of deployment and use – explaining that the start-up might be more complicated than first realized.   No matter how hard the prospect pushed for a clear explanation or a reduced professional services fee, the vendor could not explain their reasoning and would not reduce the professional services fee to a palatable number.

Why?

The vendor would not reduce the fee because management was more interested in pumping up the recognized revenue number within the quarter than in delivering a valuable product. The result was a lost deal; an unhappy willing-and-ready prospect; a ticked off salesman; a lower overall sales number for the SaaS vendor, a lower quarterly earnings report; a lower stock price, and all the attendant bad news and sorry consequences that go along with a sale lost for all the wrong reasons.   Bad tax rules spawn bad business practices.  Who can blame management for wanting to report a full sales number?  Who can blame the customer for wanting a reasonable explanation, even if the overall cost would be identical?

Even with ogres like SOP 97-2 lurking in the shadows, the moral of this story is simple:   Provide value to your client by producing the best product at the best price. Worry about your revenue later.

When dealing with client relations, it’s important to keep an eye on the big picture. It isn’t too big of a leap to assume that the general goal of a customer service department is to keep your clients happy — all of your clients. Unfortunately, developing a plan for successfully achieving and maintaining this goal might be easier said than done.

The reality of the situation is,  it’s too easy to fall back on the old adage “the squeaky wheel gets the grease.” When you spend your days (as most CSR’s do) in the trenches assisting your more vocal clients, it’s easy to begin to think of silence as a form of positive feedback. It is sad but true that people rarely pick up the phone just to tell their service vendors that they’re doing a great job. It is understood that if a client is making the effort to call, they’re either unhappy, or otherwise in need of assistance. This, however, does not mean that you should fall into the trap of assuming that a quiet client is a happy client.

I’m not trying to negate the importance of being accessible to clients. It’s rule number one in customer service that a client should be able to reach you whenever they pick up the phone. What I am saying, is that perhaps this is an incomplete approach. When was the last time YOU picked up the phone to see how things are going? Best case scenario, things are great, and you just went the extra mile to show your client how much you care. Worst case, maybe you’ll have a chance to turn around an account that would have otherwise been lost.

I’ll be the first to admit that it can be challenging to pull yourself away from clients who naturally consume most of your time and attention. However, when you do take that moment to glimpse the bigger picture, I think you’ll find it’s very much worth the effort.

The Squeaky wheel does tend to get the grease…but does the squeaky wheel get the type of grease it really needs or does it get the first thing you can find on the shelf to make it stop squeaking?  In the arena of client services and support it is difficult to ignore the squeaky wheel – they are your most outspoken customer, they have definitive thoughts about what they what and need and they are not afraid to tell you!

While it is important to make sure to pay close attention to all of your customers, it is difficult to avoid priority being given to your squeaky wheels.  While this may be unavoidable I urge you NOT to give the squeaky wheel that first can off the shelf or exactly what they ask for without question.  Doing so might solve the problem in the short term, but it will likely come back to bite you in the “you know what” in the long term.

The squeaky wheel might not like taking the time to wade through the problem with you and answer questions, but it is imperative to make this a priority.  Squeaky wheels have a tendency to describe the solution they want…not the problem they suffer from.    It might not be pleasant, but I can assure you that if you do the hard work up front and force the client to think through the problem more critically, you end up delivering a far better result and they will be much happier in the long term.  If you force yourself to do it right the first time, those lingering, periodic “squeaks” will be drastically minimized and both parties will be happier  in the end.

I recently traveled to California to visit a friend who helps run an outdoor/environmental education camp in Julian, CA. While she could host her own comedy show about life at the camp and some of the “camper situations” she faces on a daily basis, she does take the learning part of the experience very seriously. And trust me when I say, she faces a lot of impediments to that goal ( read: cranky urbanite pre-teens who are missing Gossip Girl to learn about the importance of composting).

At Camp Stevens, when a camper conflict occurs, they use H.A.L.T. – a method for finding what’s really wrong when your “having a moment.” Believers of the H.A.L.T system claim it helps you discover the root of your mood by exploring your most basic needs: are you Hungry, Angry, Lonely or Tired?

I have to admit, at first I laughed this off as “lets-talk-about-our-emotions-psycho-babble.” But when you really think about it, is there anything else that truly causes us to lash out or get stressed out?

Maybe there is some food for thought as this applies to the workplace.

Suddenly jumping between projects and can’t focus? Hungry.

Being nonobligatory to client’s request because your stressed out from picking up your co-worker’s slack? Angry

You get the picture. Maybe, just maybe, if we take a moment to think about what’s causing us to react negatively in a situation, we might just be able to alter our behavior and ultimately be a more positive and productive employee. Go figure.