Providing flawless service to customers is the best strategy for keeping them and for distinguishing your company from the competition. This article tells how to introduce quality service at all levels of your organization and lists resources that you can call on for help.
Because it's essential to every company's success, customer service is one of the most critical business areas in the 1990s. Any company that gets customers but can't keep them will go out of business. Any company that keeps customers but doesn't expand those relationships will not be successful.
Statistics show that it costs much more to find a new customer than to maintain a current one. Too many companies, however, spend substantial amounts of time and money on winning new customers and relatively little trying to keep the customers they already have. Just a small investment in making customers feel special is bound to yield a lot of incremental business.
Consumers and business-to-business customers alike have a tremendous amount of choice when buying today. In many cases, customer service is the deciding factor in weighing a purchasing decision. If no one at your company bothers to make customers feel important, they will almost certainly switch to another supplier. Companies that are successful in retaining customers generally are those that make the effort to understand what their customers value and then provide it to them consistently.
DEFINITIONSimply put, customer service is whatever enhances customer satisfaction. Satisfaction, or lack of it, is the difference between how a customer expects to be treated and how he or she perceives being treated. If you give customers even better service than they expect, they are sure to notice it, and they will recommend your company to others. There is no more effective advertising than word-of-mouth.
RESEARCH AND STATISTICSA survey of 181 American companies was conducted to see how well five service-sector industries pleased their customers: retail, hotel and catering, health care, utilities, and professional/financial. The survey, by Aleda Roth of the University of North Carolina, Richard Chase of the University of Southern California, and Chris Voss of the London Business School, found that the hotel industry pays more attention than the others to customer service. Hoteliers spend time on how their properties and people look and on how well their employees manage customer interactions. The survey found that financial-service companies satisfy customers but tend to be complacent about managing interactions.
The International Customer Service Association's (ICSA) 1996 Customer Service Benchmarking Study revealed that the most senior person directly involved with customer service operations on a day-to-day basis was a manager or director. The activities this person performs for the majority of companies include strategic planning, budget/financial planning, reviewing customer feedback, and supervising employees.
The 308 ICSA members who responded to the survey said that telephone skills and product knowledge are two of the most important assets customer service representatives must have.
Seventy-five percent of the responding companies measure customer satisfaction. Most do this using customer-satisfaction surveys or telephone interviews.
Other findings:
The average duration of a customer service phone call was 4.09 minutes.
Customer service representatives typically handle 256 calls per week.
On average, 9.4 percent of all inquiries received were complaints.
THE CRITICAL ROLE OF TRAININGEmployees must be trained in good customer service. It is a learned skill. Slogans, buzz words, and a list of guidelines do not make superior customer service happen. Only training, dedication, and commitment will. Typical training areas include problem solving, listening, communication, and stress management.
Eighty percent of the companies that have training programs of any sort provide customer service training, according to Training magazine's 1997 Industry Report, which surveyed organizations employing 100 or more employees. The report, which found that U.S. organizations budgeted $58.6 billion for training in all disciplines in 1997, revealed that approximately 7.2 million customer service people received training. They received an average of 30 hours of instruction.
Similar trends were reported in the 1996 ICSA Customer Service Benchmarking Study. Eighty-one percent of the companies that responded said customer service representatives received formal training, up ten percent from 1993.
HOW TRAINING HELPSIt's an inevitable problem. An irate customer who is very loud returns with a complaint about your product or service. Should the customer service representative:
*Tell the customer he doesn't have to take his verbal abuse and walk away?
*Tell the customer to wait while he gets a manager?
*Empathize with the customer and tell him that, if he will calmly explain the problem, everything will be done to make sure he's satisfied?
Most people recognize that No. 3 is the correct answer, but that doesn't mean they act accordingly. Unfortunately, if a person doesn't know what action to take, instinct takes over and he or she either fights or runs away. That's why training is important.
That goes double for salespeople who often find themselves in the front lines fielding customer complaints. An inability to satisfy unhappy customers often undermines a salesperson's confidence in the product, making it more difficult to approach prospective customers, face rejection, and be enthusiastic. Salespeople, like customer service personnel, should be taught to view complaints as valuable information that can be used to solve other problems. And, if they are treated fairly, dissatisfied customers will become faithful customers.
HOW TO ACHIEVE EXCEPTIONAL CUSTOMER SERVICEThe basic precepts of customer service are simple. Every customer is an individual entitled to be treated with friendliness, honesty, and respect. Treat customers exactly the way you want to be treated when you are a customer. Customers are entitled to full value for their money, fast delivery, a complete guarantee of satisfaction, and knowledgeable answers on inquiries. Word to the wise: If you don't provide these things, your competitors will.
Following are key strategies that, when combined with a comprehensive training program, will help you achieve a high level of customer service:
Commitment from management to the objectives of a first-rate customer service program is vital. Members of the management team, from the CEO on down, must be role models if changes in employee behavior are expected. Management has to uphold the customer service program with continuous training and reinforcement.
Remember, everyone in your organization is responsible for customer service. Service does not stop with the people who regularly talk to customers. Customers often deal with employees in sales, shipping, or accounting. So all employees should be involved in the service strategy. Ironically, companies that are most effective in customer service often don't have a separate customer service department.
Develop a service strategy. In order to do this, you must describe your customer in great detail. What do your customers want, need, and expect? If you don't know who you're trying to satisfy and what their needs are, it will be difficult to satisfy them. Make a distinction between customer needs, demands, and preferences.
Here are six important words to remember in your need-development process: who, what, where, why, when, how? Ask them and you'll get a lot of information to help you understand people's needs.
Treat your employees well. An organization will not have employees who treat customers right if the company does not treat its employees right.
Motivate your employees. Build your employees' self-esteem. The better employees feel about themselves, the more effective they are in providing quality service. An enthusiastic employee will want to learn about your company and its products or services. The more an employee knows, the better, because customers like dealing with people who know what they are doing.
To keep your people at the top of their form, you may want to introduce an incentive program or some other type of recognition. That can be done with a monetary award, a gift, or even a trip. It can be an opportunity to attend a seminar or have lunch with the CEO. Employee-of-the-month awards are good recognition programs, because they create competition and acknowledge individual achievements publicly. And don't discount the simple pat on the back.
Home Depot is one company that rewards employees for outstanding customer service. Customers are encouraged to fill out a questionnaire when they receive good service, and the employee mentioned gets a merit badge. After five merit badges, employees receive $100. Home Depot salespeople agree that this program inspires them to do their best.
Let employees make
on-the-spot service decisions. Front-line employees must be given authority to respond to the needs and problems of individual customers with speed and courtesy. There should be no need for them to go "higher up" when dealing with a customer's problem. This philosophy also makes employees feel important, which, in turn, makes them more enthusiastic. Fair warning: If an employee puts a caller on hold to get someone else's help, the customer's aggravation level increases.
Listen and empathize. It's imperative that employees listen to a customer's complaints and be empathetic. Customers will tolerate mistakes as long as they believe that the company really cares about their feelings. Representatives must be trained to listen to customers and find out what they want and when. Obviously, courtesy must be shown in every contact with customers, whether it's in person, on the phone, or by mail. Remember to view complaints as an opportunity for valuable market research. They're an opportunity to discover problems and remedy them before they become damaging.
Reinforce the service commitment. Customer service training should be an ongoing commitment. Continue your training program on a regular basis. Don't look at it as a one-shot deal.
Follow up, follow up, follow up. After the transaction, make follow-up contacts to insure that your customers are satisfied. Follow-up may be done by phone or mail, but remember, any time you can talk to a customer one-on-one, you're way ahead of the game.
MAKING YOUR COMPANY CUSTOMER-DRIVENCompanies that are customer-driven recognize that, if they don't run their businesses to suit their customers, their customers will suit themselves-somewhere else. "It used to be that if you built a good product you would survive," says James Feldman, president of Shift Happens! Seminars, Inc., "but today, customer service has become the distinguishing characteristic among products."
Feldman is one of several customer service experts who contributed to the book Thriving on Change, by Rick Crandall (see Books). Here are some tips on becoming customer-driven that are excerpted from the book:
· Be your own customer on a regular basis.
· Ask your customers what they want.
· Listen to those on the front lines.
· Experience your company from the customer's perspective.
· See your customers as individual people with needs, wants, and feelings.
· Experience the marketplace firsthand.
HOW TO SELL MORE TO CURRENT CUSTOMERSHere are three tips for retaining customers and encouraging them to increase their business with your company:
Interact with customers frequently. By keeping in touch, you'll get a feel for customer needs and what additional products they're likely to buy.
Restructure your sales force. Some companies have had success dividing the sales force into two groups: account managers who hunt for new business and client salespeople who regularly visit and survey current accounts.
Conduct seminars. Invite your customers to training seminars.
AN ELECTRONIC DATABASE IS VITALA customized database is critical to keep abreast of customer purchasing behavior. Initially, customers may have to be persuaded to reveal their preferences so the information can be used to build a database, but it's worth the effort.
Names and addresses of customers and prospects, coupled with information about their purchasing habits and preferences, should be stored electronically. You can then search for items corresponding to certain criteria. For example, a computer can identify within minutes those clients who have not placed an order in the last six months. Letters, offers, inquiries, or phone calls, can then be made with pinpoint accuracy.
One company that employs excellent customer service techniques is the Nordstrom retail chain. Every sales clerk keeps a computerized "personal book," a profile of his or her repeat customers that includes everything from names and addresses to clothing sizes and style and color preferences. Armed with this information, the clerks call customers to announce the arrival of items that might please them.
THE INTERNET AND CUSTOMER SERVICEToday, the Internet is one of the most popular ways to communicate a message. Researchers estimate that between 40 million and 50 million people are online around the world.
The Internet provides a new way to develop rapport with customers, so companies are building Web sites to communicate with them. Answering questions, solving problems, and selling additional products are just a few ways the Internet can play a role in customer service.
Forty percent of the companies who responded to the 1996 ICSA Customer Service Benchmarking Study said they make general company information available through the Internet. Surprisingly, only eight percent of companies offer online ordering, a number that is sure to increase over time.
HOW TO WIN BACK CUSTOMERS WHO HAVE STRAYEDIt's going to happen. Even with the best customer service strategies in place, you're bound to lose a customer here or there. A personal visit from someone in your company is the best way to find out why this customer left. If the customer says your product or service wasn't what was expected, ask how the product fell short. If the customer says he or she found another company he likes better, ask why they chose another company.
Apologize for any inconvenience or misunderstanding and, quite simply, ask for another chance. When trying to win back an account, offer to provide something extra for the client, such as free delivery, or a discount on their first order.
Winning back an account is only half the battle. You have to service the client on a continuing basis. Contact the company on a regular basis to touch base. Note: There are some customers worth giving up. That is purely a business decision.
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