I want to share with you a retention strategy I just experienced, and I after I got off the phone I couldn’t help but wonder if we applied said companies retention strategy at Merix, would it help us to retain more customers?

Every company today has a customer retention strategy.  Be it in the communication field, insurance industry, grocery stores, mail order, lending and mortgage brokering, Irrespective of the market sector…there’s a retention strategy in place.  Some companies are good at it, and very aggressive.  Retaining customers is critical to a company’s growth. Our industry is only now talking about this issue but the reality is it’s been a part of our work environment for many years, and the practice will become more prevalent going forward. The purpose of this blog is not to debate the “who owns the customer” question.  I want to share with you a retention strategy that I just experienced, and I after I got off the phone I couldn’t help but wonder if I applied said companies retention strategy at Merix, would it help us to retain more customers?

The story goes like this. I decided to discontinue the services of an alarm company.  If there’s any would-be break and enter specialists reading this blog, I didn’t say I wasn’t changing companies;  I was just discontinuing to do business with a certain company.  When all is said and done, I’ll have security numbers to enter, loud alarms that will go off, and a snipers nest on the second floor.  What, that’s too much?  Before I lose my train of thought, where was I? Oh yeah, saying goodbye to Joel.  I’m not going to name the alarm company but they FORCED me to do it.  The customer service rep said the following to me; “We’re sorry to see you leave Mr. Bozic, but I understand totally.  Cancelling your service will not be a problem.  We’re going to forward to you a list of instructions; we can send that to you by email or mail.  The instructions are easy to follow, and we’ll also include a box with a courier slip from UPS.  You have to send back all hardware by the 15th of the month. The hardware must in good working order, and in the same condition that you received them in.  If we don’t receive hardware by the 15th of the month, you service will continue for another 30 days.   Should you change your mind and wish to continue to use our services, we’ll gladly take care of that. We’ll forward another list of instructions”.  Well, that’s easy, and very clever on their part.  Clearly their strategy is to make it difficult for me to leave.   So I couldn’t help but wonder what if Merix was to apply the same strategy?

“Hello Mr. Borrower.  Yes, we did receive your discharge statement.  May I ask why you have decided to take your mortgage business elsewhere?  I see, the bank offered you 150 bp’s below our rate, a free chequing account, and a weekend at the banks CEO’s cottage in the Muskoka’s.  I totally understand. The discharge process is very easy.  We’re going to send you instructions…we can do that by email or mail.  We will include a box, a plastic cup, as well as a courier slip from UPS.  In the box you will include all the original documentation which was provided to you by your solicitor on closing, including the actual pen that you used to sign all the documents at the solicitor’s office.  You will also include all the original documentation that the mortgage broker provided to Merix.  Furthermore, a urine sample from the broker is required as well.  That’s why we included the plastic cup.   Please note that we have to receive the entire package by the 15th of the month.   Once we’re in receipt of the complete package, your actual discharge date we’ll be set.   To help you with that process, and to schedule accordingly, our discharge dates are set for next solar eclipse.  Should you decide to change your mind, and stay with us, we will gladly forward a new set of instructions”.

In fairness to the alarm company, the customer service rep was very courteous and professional.  He was doing his job, and he did it well.  The reality is, my experience is happening every day in our industry.  Lenders are investing money and resources with respect to their retention departments.  Some lenders today require that they have to speak to the borrower prior to processing the discharge request.  Trust me, it’s not to say “we’ll miss you Mr. Borrower, and we wish you well”.  The lender will do everything possible to retain the borrower, and if reasoning fails…they’ll beg.

Ah, who am I kidding?  I’m not removing the security code pad, filling holes in the wall, and removing all the wires around the windows and doors.   I’m staying with the same alarm company.  Joel, please take me back.

Until next time,

Cheers.

What happens when Brands are Associated with One Individual?

The summer of 2011 will be remembered for the loss, and stepping aside, of two iconic leaders.  One dedicated his life to public service, and the other individual is a cultural icon.  One lived off the public’s dime, while the other individual created massive wealth for himself and shareholders.  Both individuals stepped aside for health reasons.  One individual lost his battle with cancer, while the other individual is stepping aside to fight the horrible disease.  The name Jack Layton and Steve Jobs are synonymous with their respective brands, the NDP and Apple.  Their respective brands today face the difficult task of determining…now what?  Who will fill the shoes of these iconic leaders, and what fate awaits the two brands?

Upon learning that Jack Layton had passed, I was struck by the fact that so many people stated that they were shocked to hear the news.  If you watched his press conference in July, when he announced that he was stepping aside for health reasons, he looked like a man who has been told he should get his personal affairs in order.  Not to sound morbid but I have to wonder if the same doesn’t hold true for Steve Jobs.  It’s been widely reported that Jobs has been fighting cancer for last seven years, and his health today required that he step aside as CEO.  It was announced that Jobs will take on the role as Chairman of Apple, but that role is diametrically opposed to what Jobs role was as CEO.  The Chairman of the board is responsible for corporate governance, and ensuring the company adheres to corporate strategy.  The CEO role is responsible for creating the strategy, and being responsible for the overall business.  When you’re a CEO, you’re in the middle of all the action.  As Chairman your responsibilities are to the board, which customarily meets four times a year.  I suspect that neither Layton or Jobs would be happy unless they were in the trenches, making things happen.

Apple has already determined who their next CEO will be, Tim Cook.  The NDP will have a leadership convention to determine who will sit on the throne.  Both individuals will have an impressive CV, but I can assure that it will never be the same.  Quickly, name me two individuals that were a part of Layton’s cabinet, not including his wife?  Or who is Tim Cook, and what revolutionary technology was he directly responsible for creating?  You’ll have to google the answers.  Yet when it comes to Jobs and Layton we can rhyme off a number of their accomplishments.  The NDP would never be the official opposition without Layton, and Apple would never have left every other technology company in the rearview mirror without Jobs.  There’s plenty of examples where companies have thrived with the departure of an irreplaceable” leaders, Walt Disney, Southwest Airlines, Wal-Mart, IBM etc.  But all these companies lost some of their mojo when their iconic leaders were no longer at the helm, and they all spent time in the business wilderness before making a comeback.  That’s the problem when brands are associated with one individual.  It’s inevitable that brand will take a step back before it finds its footing again.  I have a certain amount of empathy for the two individuals who will be saddled with the responsibility of making the electorate and markets forget about the past.  Joseph Bower, author of The CEO Within, captured it accurately when he said, “acorns seldom flourish in the shade of a great oak”.

Upon reflection I realized that we have a lot of “great oaks” in our industry.  Could that pose a challenge for these companies in the future? Possibly.  But the reality is these companies would never have reached the levels of success they are enjoying today without their leadership.  The one common trait they have is they are founders of their respective companies.  These individuals cast a very wide shadow.  I’ll prove it to you.  Let’s play name association.  I’ll mention four brands in our industry, and what name immediately comes to mind?  VERICO, DLC, TMG and MCAP.  Without a doubt you said Dreyer, Mauris, Thomas and Swift.  I don’t care what kind of credentials one has, filling their shoes would be a difficult task.  Business acumen alone will never trump business street smarts, and emotional attachment.

Until next time.

Cheers

The family cruise to Alaska is coming to an end. As I write this blog we’re in Canadian territory, off the coast of B.C., on our way to San Fransisco, to head back to Toronto. Now that’s taking the long way home. Spending 12 days on ship is an experience, and it does take some adjusting. The biggest adjustment is being way from work for a prolonged period of time. It’s been close to four years since I’ve been away for more than five working days in a row. I’ve taken plenty of short vacations over the years but they’re usually four or five days in succession. The reason is simple, I can always come up with a reason why “now is not a good time to be away work”. Too busy or it’s too slow. There’s always a justification. If you’re guilty of the same thing here’s what I’ve learned, we’re not that important. I checked emails every morning, responded when I thought it was necessary but I made the decision that my family and this trip came first. MERIX wasn’t neglected in my absence because there’s a great senior leadership team in place, and they’re more than capable of taking care of the day-to-day tasks. If the business  consumes you that you can’t take a couple of weeks off, frankly, that doesn’t bode well for your business or yourself. Coming to this realization is an ongoing process, and I’m still working on it.

It’s interesting as a vacation draws to an end the work switch seems to get turned on. With every passing hour “work” issues enter your thoughts and I suspect it’s the minds way of preparing ourselves for what’s next. What’s next for me professionally? There’s been a number of changes at MERIX recently, and I’m really excited about the direction our company is taking. I’ll elaborate further about some of the changes in future blogs. I’m also looking forward to take on the challenges of being CAAMP Chair, effective this November. The next 16 months are going to be very busy, and I can’t wait to get started.

A a final thought relative to my trip to Alaska? Russia sold Alaska to the US in 1867. The land and all if its natural wonders sold for $7.2 million. That worked out to 19 cents an acre. As some of my Jewish friends want to say…”such a deal”.

Until next time.

Cheers

The excellent adventure continues and I’ve come to learn a lot of things about taking a cruise.  Firstly, don’t ever call it a boat.  The crew doesn’t like it, and given that they would be responsible to haul my sorry ass out of the water if I went overboard, no need to make them upset.  It’s called a ship. So ship it is.  I also learned that all cruise liners are not equal.  This is my first cruise so I’m basing this on what some of my fellow passengers have told to me.  It appears the magic number is around 900 passengers.  I’ve been told the really big cruise liners, the one’s which hold 3,500 people, are nice but given the amount of passengers on board it impacts service levels.  I’m told there are wait lines for everything.  From waiting to eat to going to the bathroom.  No such issues exist on the ship we’re on.  We’re on a Crystal Cruise Liner, and they have a reputation for not overcrowding and superlative service. I’ve come to learn that’s a fact. I’ll get to the service in a moment.

I also learned that many passengers are frequent cruisers.  Example, I met a man by the name of Barry last night in the cigar lounge. Yes, the ship has a cigar lounge…high backed leather chairs….mahogany wood…cognac…and a giant flat screen TV with Fox News on all the time. It’s paradise! I digress, Barry and I got to chatting, the usual small talk, what do you do for a livening, first time on a cruise etc?  This is Barry’s 10th cruise, and he’s already booked his cruise for next year, the Atlantic crossing.  Barry has time on his hands, he’s retired, as most of the passengers are.  I think the median age on board is 73.  It’s been a long time since anyone has referred to me as young man.  Barry did, and I like Barry.  He’s a big bear of man, a retired family law lawyer from Virginia.  His specialty was divorce.  He said to me in his Virginia accent, “young man, when I was practicing law my matto was…I’ll guarantee I’ll win your case or you’ll get your spouse back”.  Let me tell you, laughing so hard that you’re coughing up cognac through your nose is damn painful.

As for the service on board, it’s almost over the top.  After a couple of days on board I wanted to yell, “enough already…trust me…if I need something I’ll snap my fingers”.  Just kidding!  I would never snap my fingers…I’d whistle.  Truly the  service is exceptional, and it’s consistent throughout the ship.  I’ve spoken to crew members from Croatia, Poland, Check Republic, Australia, South Korea, US and Canada.  They’re all so happy and willing to please. Being an employer I asked many of them why they excelled at customer service.  Every one of them said the same thing, “the company is good to us, we’re good to the company, and we always put the passengers first”.  Truly inspiring when you consider that crew members are on contract anywhere between 4 to 6 months.  They work each and every day of their contract.  No time off, that comes at the end of the contract, usually two months off.  I can’t imagine working for six months straight, with no days off, away from family.  Many of the crew members indicated that it’s difficult being away from their kids for such a prolonged period of time but they do what’s necessary to provide for their families. 
Damn, if we could convince these people to become brokers and lenders we would all be golden. They’re committed…they have passion…and they’re willing to sacrifice.

The most important thing I learned about being on a cruise is…food.  It’s everywhere and it’s available 24/7.  Something happens to you when you’re on a cruise.  You’re on the ocean…you see an iceberg…and you say to yourself…”wow, that’s a big iceberg…I think I’ll have a hamburger”. 

Unlit next time

Cheers

It’s finally here and there’s no way to avoid it. I’m not referring to recent headlines, the stock market, US debt and downgrading or the economic crisis in Europe. What I am referring to is the funding of our healthcare system, and our aging population. No political party, while governing or in opposition, has had the courage the face these issues. For too long government has put votes in front of fixing the problem. Health care in this country has always been treated like the sacred cow, and because of inaction, the system is broken. To be clear, healthcare in this country is provided by some of the best medical practitioners in the world. But they are expected to perform miracles within a system that’s flawed. The system is going to have to change because the government will no longer be able to throw money at the problem. There just isn’t enough money anymore.

The reason the government is facing this problem is simple, the number of working-age taxpayers will not be able to foot the bill going forward. The Globe and Mail reported last week that the government has held closed-door meetings, at the highest levels, about this issue. According to the Globe and Mail, “Canada, currently the 27th oldest country in the Organization for Economic Co-operation and Development, is on track to become the 11th oldest within 20 years. It’s a challenge that will spark debate over Canada’s retirement age, fertility rates and immigration, while risking generational tension between a growing population of older voters and a shrinking pool of younger taxpayers.“. These figures are staggering.

Healthcare and the aging population will impact us all of us economically. Today we have a tiered healthcare system. Irrespective of what anyone says it’s in place today. Why is that a professional athlete in this country, who requires a medical procedure, be it testing or surgery, can have the procedure done within 24 hours? The reason – someone is paying for it. I recently experienced this first hand. I went to see a specialist a couple of years ago and he said that I required a MRI. He said that he could get me in within 3 months. However, if I wanted to go to a clinic in Buffalo, he could get me in within 24 hours, for a cost of $1,000. I went to Buffalo the next day, and gladly paid the money. I think this is our future, private healthcare. I don’t see what other option we have. A combination of public and private healthcare is the only solution. If this indeed comes to fruition it will have an impact on all employers. If the day comes where employers in this country recruit based on private healthcare insurance, there will be a direct correlation to wages. Private healthcare is costly, and employers will have to balance the capital cost of insurances versus wages. Last time I checked yearly income was an important factor when qualifying for a mortgage. There’s always a domino’s effect.

As for the aging population, I can see the day when reverse mortgages become more common place. The challenge will be to develop products which are more affordable for the elderly, and to create securitization vehicles for reverse mortgages. Nursing homes are costly, and adequate care is always a concern. The elderly may chose to remain in their homes for a longer period of time, and they have every right to live out their lives with dignity, in the comfort of their own homes. Ah, but what’s left for the kids? In this new world, maybe not so much.

Hopefully these issues will be confronted in an honest way. The government has responsibility to lead in these matters, and the partisan rhetoric will have to be put aside for the greater good. The taxpayer, the elderly and the sick deserve better from our government. It’s time to be honest.

Until next time

Cheers