For small business success, listening to your critics is just as important as listening to your fans

michael back - For small business success, listening to your critics is just as important as listening to your fans

Six years ago, Michael Back parked his car before attending a meeting, just like he’d done many times before. Although he paid for parking, his time expired before he was able to slip out and top up the meter, and so he returned to find a ticket on the windshield of his car.

Parking tickets are a fact of life in most cities. “We’ve all had our $60 Starbucks,” Back said.

More than two million parking tickets were issued in Toronto in 2018, with fines topping $100 million, according to the city’s data, while 456,287 tickets were issued in 2019 and 398,095 in Calgary in 2018.

But after this particular ticket, Back — whose background was in the electronic payments industry — got to thinking there should be a better way.

“The business of parking has not always been customer-friendly,” he said. “Everyone has a story of feeding coins into a machine and no one cares, you don’t even know who to call.”

In 2013, Back enlisted a team of software engineers to develop a mobile app and e-commerce website for parking. The resulting company, Toronto-based Honk Mobile Inc., uses a cloud-based technology that allows drivers to search out, reserve, pay for and top up parking fees from a smartphone, tablet or internet-connected device.

Since Honk’s launch in 2014, Back said it has become one of North America’s largest companies for on-demand mobile payments and advance reservations for parking based on parking locations listed, users and transaction volume. It makes its money on the free consumer app by charging parking lot owners and operators a fee for each transaction that it delivers.

There are, of course, many competing apps, but Back said they are often designed for specific parking lots so consumers have to download several apps to cover all their needs, while Honk is interoperable.

He said another advantage Honk has is its habit of analyzing customer behaviour and paying careful attention to feedback for keeping it a car’s length ahead of the competition.

It can be tempting for a small or mid-sized business to get caught up in the race to acquire new customers rather than listening to the ones it already has, but “it is vitally important to keep your ear to the ground, because if you’re not customer-focused, you’ll be out of business,” Back said. “We’re in this kind of immediate feedback loop where you’re only as good as your last review.”

Since customers don’t always know what they want, Honk’s team tries to assess customer behaviour with an eye to making possible improvements.

“We noticed many of our customers parked in the same place time after time,” Back said. “So now we allow them to ‘favourite’ a location so they don’t have to look for a number or geolocate themselves.”

The company also carefully monitors comments on social media and reviews in the Google Play store and the Apple App Store, as well as using a customer relationship management system to track call-ins.

Back and the senior team meet weekly to analyze the results, which he said is crucial because apart from helping to gauge customer satisfaction, it provides a rich vein of insights into both pain points and improvements that keep customers happy.

For example, “around tax time, we had a lot of people tell us it would be great if they could download their parking receipts for income tax purposes,” he said. Manually compiling a list of receipts to send to each customer would have required too much time and energy for Honk’s team, so they created a feature that aggregates monthly receipts.

“You can download your parking payments to a spreadsheet and upload it into whatever expense software you’re using,” Back said. “And soon customers will be able to segment those purchases between ‘business’ and ‘personal.’” Since the receipt feature is self-serve, “we have less pressure on our Help Desk.”

Another issue that showed up regularly in the feedback was the tendency for customers to call after inputting incorrect licence plate numbers.

“Sometimes they weren’t driving their usual car or it was just a case of fat finger syndrome,” Back said.

Honk’s developers responded by allowing customers to change an incorrect plate number on their own.

Aside from keeping an eye on customer behaviour and feedback, Honk relies on online surveys, an inexpensive and effective tool for determining how well a product is working for clients. Back said offering a small incentive to a subset of users for taking the time to share their insights is a nice touch.

“In our case, that’s usually a coupon for the next time the customer parks,” he said.

Back favours open-ended questions that garner more useful information, such as: Are there any features you would like to see in our product that it doesn’t currently have?

He also advises keeping surveys short and avoiding questions that ask for a rating between one and five.

“It’s amazing to get five-star reviews,” he said. “But it’s constructive criticism that makes you better.”

Financial Post

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