Estimated Reading Time: 4 minutes
By Melanie Lockwood Herman
During a recent trip I experienced an unfortunate series of unsatisfactory “customer service” events. In one instance the staff of a nonprofit told me that I did not need a nametag or other credentials to participate as a speaker at the organization’s conference. As I walked away I noticed a statement indicating that “nametags are required for admission to conference workshops” printed on my copy of the advance program materials. A few hours later I attempted to ask a question at the counter of a name-brand sandwich shop. The clerk interrupted me, waived his arm in the air and instructed me to walk down to the end of the counter in order to be served. He followed me down to the end of the counter. Once in the apparent designated spot for customer questions I indicated my desire to order a turkey sandwich. The clerk then told me to return to the place where I had originally sought his help in order to help myself to a sandwich in the warming oven. In both cases, my teenage daughter, intuitively sensing my frustration, advised me to “chill.”
These experiences contrast dramatically with conversations I’ve had with sales personnel who make cold calls to the Center. During recent months we’ve received a record number of calls from individuals eager to help the Center “save money” or “improve productivity.” None of these complete strangers seem in a rush to end our conversation and the calls always begin with a warm greeting and questions about my health and welfare.
In a recent edition of The New Yorker, writer James Surowieki explores what he terms the “roving eye” of companies that depend on their customers. In his article titled Are You Being Served, Surowieki observes that many companies spend more time and money acquiring new customers than serving the ones they already have. Surowieki, who is also the author of the fascinating book “The Wisdom of Crowds,” refers to the practice of emphasizing customer acquisition (at the expense of existing customers) as the “efficient relationship paradox.” He explains that “It’s only once you’ve actually become a customer that companies put efficiency ahead of attention, with the result that a company’s current customers are often the ones who experience its worst service. Economically, this makes little sense; it’s more expensive to acquire a new customer that to hold on to an old one, and, these days, annoyed customers are quick to take their business elsewhere.”
Our “roving eye” and the efficient relationship paradox also occur in the employment relationship. The cost of recruiting and training a new employee ranges from a few thousand dollars to tens of thousands. And what does it cost to keep a valued employee? Arguably less. Yet many leaders miss the low-cost ways to keep morale high, provide the support employees seek, and reduce turnover and its associated price tag. And sadly, some employers who work hard to persuade prospective employees that the nonprofit is “making a difference” treat long-term staff as indentured servants.
I’ve been working with a new client this week on the design of a series of webinars on human resources risk. As I think about the series and what I view as some of the “absolutes” and “musts” in managing HR risk, I’ve been reflecting on several underlying principles that help an organization live up to the promises made during the hiring process. Consider the following tips.
Every nonprofit leader faces difficult choices when it comes to allocating financial resources. Investments in serving existing clients, consumers, customers, and supporting valued employees and volunteers represent a wise investment in the long-term health and reputation of your organization.
Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your feedback on this article and questions about the NRMC’s resources at Melanie@nonprofitrisk.org or 703.777.3504.
“First let me congratulate you on a conference well done. I had a great time at the Nonprofit Employee Benefits Conference and walked away with some valuable tools and questions that we’ll need to be addressing in both the short and long term. Thanks to you and your staff for all you do to provide us with quality resources in support of our missions.”
“BBYO’s engagement of the Center to conduct a risk assessment was one of the most valuable processes undertaken over the past five years. Numerous programmatic and procedural changes were recommended and have since been implemented. Additionally, dozens (literally) of insurance coverage gaps were identified that would never have been without the work of the Center. This assessment led to a broker bidding process that resulted in BBYO’s selection of a new broker that we have been extremely satisfied with. I unconditionally recommend the Center for their consultative services.
“Melanie Herman has provided expert, insightful, timely and well resourced information to our Executive Team and Board of Directors. Our corporation recently experienced massive growth through merger and the Board has been working to better integrate their expanded set of roles and responsibilities. Melanie presented at our Annual Board of Director’s Retreat and captured the interest of our Board members. As a result of her excellent presentation the Board has engaged in focused review which is having immediate effects on governance.”
“The Nonprofit Risk Management Center has been an outstanding partner for us. They are attentive to our needs, and work hard to successfully meet our requests for information. Being an Affiliate member gave us access to so many time- and money-saving resources that it easily paid for itself! Nonprofit Risk Management Center is truly a valued partner of The Community Foundation of Elkhart County and we are continuously able to optimize staff time with the support given by their team.”
“The board and staff of the Prince George’s Child Resource Center are extremely pleased with the results of the risk assessment conducted by the Nonprofit Risk Management Center. A thorough scan revealed that while we are a well run organization, we had risks that we never imagined. We are grateful to know that we have now minimized our organizational risks and we recommend the Center to other nonprofits.”
Great American Insurance Group’s Specialty Human Services is committed to protecting those who improve your communities. The Center team has committed to delivering dynamic risk management solutions tailored to nonprofit organizations. These organizations have many and varied risk issues, hence the need for specialized coverage and expert knowledge for their protection. We’ve had Melanie speak on several occasions to employees and our agents. She is always on point and delivers such great value. Thank you for the terrific partnership and allowing our nonprofits to focus on their mission!