COLORADO SPRINGS, COLO. — People are irrational. That’s a fact, not just a snarky comment. Contractors attending the Mechanical Service Contractors of America 26th Annual Educational Conference here found out how emotional people are and how that affects both hiring and sales.
Tim Sanders, former chief solutions officer for Yahoo!, talked to the contractors about their employership brand. Yes, contractors, in fact, every employer, has a “brand” as a place to work. Some brands are better than others, which is why people want to work for Southwest Airlines even though they pay less than their competitors.
What is branding?
“It’s the promise of an experience installed in the mind of your target,” Sanders said.
Contractors have brands as places to work that prospective employees hear from their friends or from social media. They hear about the quality of the gear they get to work with, the work environment and the quality of the supervisors. Those impressions can turn sour with one bad story.
Sanders turned to a business school rule of thumb, the 25/200 rule of sales. Any time prospective employees or customers take longer to make a decision, it will hurt sales. The 25/200 rules states that anything that reduces the amount of time that a customer takes to make a decision by 25% will result in a 200% increase in sales. Branding is a big way to cut down decision time.
Sanders referred to a book published 12 years ago, “The Experience Economy,” that bears the telling subtitle, “Work is Theater and Every Business a Stage.” Here’s where things get really irrational. The authors, B. Joseph Pine and James H. Gilmore, noted that in 1980 the emotional brain, the amygdala, was five times more powerful than the logical portion of the brain. Thanks to our non-stop consumption of every form of media, the emotional portion of our brains are now 35 times more powerful than our logical brains.
Everything has to be an experience. If people were logical, they’d get married in front of a judge and save their money for a house or something else practical. Instead, wedding costs between 1975 and 2005 rose 350%, Sanders said. The emotional experience is why a bad server can negate a chef’s great food.
In a separate session, consultant Peter Sheahan, CEO of ChangeLabs, told the contractors that assumptions that test poorly include notions that we control our own decisions, that we even make decisions, that the decisions we make are rational or that we know why we make the decisions we do. Rationality is the most over-stated reason for making a decision, Sheahan said.
People have 65,000 thoughts a day, he said, and most of them are the same day after day. Buying decisions and the choice of a contractor have to fit in with buyers’ concerns and their view of themselves. A contractor’s brand has to align with how buyers aspire to be perceived.
People make decisions in a way that fits in with their view of themselves, which is why branding is important. It’s why people look cooler with an iPad or why LEED certification means something to building owners and prospective tenants.
For employees, contractors can design a compensation plan to be competitive, Sanders noted, but they have to attract employees on a subconscious, emotional level. When employees get up in the morning, do they want to come to work? That’s why getting into energy conservation or water conservation work is a great tactic in a field that’s not real sexy to begin with. Employees want to feel that their work makes a difference, and saving energy makes a difference.
It’s possible the make boring work fun. Sanders told the story about a humdrum Minnesota-based home computer service that made itself fun by rebranding itself as the Geek Squad. Revenue for the Geek Squad has risen 1,800% since the rebranding and the switch from vans to Volkswagen Beetles. Moreover, Best Buy bought the Geek Squad for $400 million.
Happy employees work harder to make customers happy. Reciprocity is a powerful part of the human social contract. If you let somebody cut in front of you in traffic, you expect to get The Wave. That’s why happy employees treat customers better and are more open to change. Sanders says he knows a person who claims he can predict whether cash flow in a service business will increase or decrease in the future just by watching how the employees act.
Once those employees are working for you, they will build your brand online — good or bad — through social media such as jobvent.com. Sanders showed a couple examples. One was about a major bank where employees said the bank itself wasn’t bad but it seemed like they deliberately recruited jerks for middle management. Another review of a cable contractor by two employees mentioned how hard the work was, but they both mentioned the company owner by name and said what a great guy he was to work for.
Your “experiential reputation” will win the war for talent, Sanders said, especially for service technicians and for managers with 10 years of P&L experience.
Sanders noted that you will get what you ask for in the ad. If you advertise for people with a passion for service, those types will apply. Managers should always hire people smarter than they are and give them leeway to make customers happy.