Customer Service: How To Do It Right! - A do it yourself strategy to keep your customers loyal, attract new ones and increase your profits

CHAPTER ONE

 

Customer Service—The Key to Your Competitive Edge

 

Few small or medium size business owners today are unaware of the importance of good customer service. Given the financial leverage of the larger businesses, will customer service be enough to keep your business flourishing, or even growing, in these exceptionally competitive times?

 

This book asserts that it can be. Customer Service: How to Do It Right! shows you exactly how to integrate the right customer service program into your business with an easy step-by-step approach. When your company makes exceptional service happen for every customer, every time, you will become the company of choice for both your employees and your customers.

 

Here’s an example:

 

Shortly after Bob and Glenda Johnson celebrated their 30th wedding anniversary, they took stock of their lives. Their house would be paid off in one year, their kids were long gone and had their own lives. Plus, they could actually see a time, not too far in the future, when they could take time for themselves. Glenda, having taught for 27 years could retire anytime, and since Bob was a consultant he made his own schedule.

 

As they reviewed their finances, they realized that all their insurance (homeowners, car and life) was all with one company. Each night Bob watched the financial news become more complicated—actually downright depressing—and he wondered if it was time to get a financial planner so that their security would not be compromised.

 

Bob called his insurance broker plus several others. Bob and Glenda met with different people and were offered different plans that everyone said would make money. Their own agent also had a plan—but it wasn’t significantly different from other firms’ offerings.

 

The truth was that Bob and Glenda weren’t sure what to do. So they made the decision based on one factor. Their agent had served them well for 30 years. He had always returned their phone calls promptly and any claims they submitted were paid promptly. He now had a financial planner in his office, so they decided to use those services and stay with the agent’s firm because he could guarantee one thing: value through good service.

 

I hear this story far more today than “I’m just looking for the best price” when I interview customers about their experiences. In this case, service was the differentiating factor. Not that price is not still an issue; but more and more customers are looking for low prices plus the value that service brings to the transaction. You must have both today if you want to succeed.

 

But delivering outstanding customer service doesn’t have to be expensive. Most changes you will make to improve service require little or no cost.

 

As you will learn from this book, if you are going to succeed as a small or medium size business today, and possibly expand, you must make the delivery of exceptional customer service a very large part of the equation. It must become part of the way you do things. Delivering outstanding customer service is essential when competing with the “big boys.” Gone are the days when you could compete on price or unique product alone. Even if you have a unique product or idea, other businesses—especially the superstores—quickly follow your lead on price and will rapidly copy your innovations.

 

Just look at some of these findings across numerous industries from various sources, including TARP (Technical Assistance Research Programs), the Canadian Marketing Association and the National Federation of Independent Business:

 

Ninety-one percent of unhappy customers will never buy again from a company that displeased them.

Twelve good service experiences are required to overcome a single bad one.

Ninety-five percent of your customers will stay if their problems are fixed correctly.

Excellent service leads to increased sales. One study showed that people are willing to spend up to 10% more for excellent service.

One dollar spent on advertising yields less than $5 in incremental revenue, but that same dollar spent on improving customer service can yield more than $60 in incremental revenue.

Seventy-five percent of all e-shopping carts are abandoned before the purchase is actually completed. Nine out of ten shoppers who abandoned their carts did so because of a lack of customer service.

Over 25% of your customers will stop doing business with you this year and

68% of departing customers cite poor service (not price or quality) as the reason.

Increasing customer retention by 5% boosted profits for an insurance brokerage organization by 50%.

 

Other studies report that good service contributes to a company being chosen as a preferred vendor, and as companies get to know their customers better, cross sales of new products also increase.

 

One vital result of a customer service focus is that referral customers, who cost nothing to acquire and usually arrive firmly decided to buy, often come as the result of good service.

 

One hardware store estimated as much as 50% of its sales are from referrals and this enables them to generate enough business to go up against the “big box” hardware stores. They stock hard-to-find items and are known for their friendly, knowledgeable sales staff.

 

Differentiation Through Service

 

The quality of service you offer is one of the few ways you can market your product or service as being significantly different from the competition. Few companies can offer something truly unique. Face it, most competitors are selling the same things with very little to tell their products or services apart. If price and product quality are about equal, the only real difference is how customers’ needs are met through the quality of service you offer.

 

Sam Greengard, writing in Chief Executive Magazine, tells how Christopher Milliken, CEO of OfficeMax, a Boise Company, recognized the only way to escape the bruising price competition and razor-thin margins of office supply superstores was to provide greater value and superior customer service. Milliken invested a serious amount of money into a revolutionary customer relationship management program that enables his business to stand out from the others in the area of customer service. This helps Boise/OfficeMax cross-market, cross-sell and service accounts more effectively.

 

 

Here are ways that small and medium size businesses are differentiating their organizations through exceptional service.

 

 

An office supply company visits their customers monthly and checks on levels of service satisfaction. They also inform the customers of new products and services as well as changes to the company Web site. One customer relates, “This has probably been the biggest factor in my choosing them as our primary source. I feel they care about our business.”

 

A small grocery store caters to its elderly customers by boxing purchases and loading them in their cars and by carrying personal charge accounts for their customers. They also send their customers holiday greeting cards.

 

A party rental store allows the customers to move around the decorative items they are considering renting until they get a good feel for the final look of the rented items.

 

A safety alarm company answers its phone the old fashioned way—with a real person. They don’t force their customers to use an automated system and they always return calls within 24 hours.

 

A successful nail salon that recently expanded to two locations is open seven days a week so they can be easily accessible to their customers. They also deliver something extra—an exceptionally long massage when doing a customer’s nails.

 

Here’s another success story of a company that has built a successful business based on excellence in customer service.

 

Space Center Tire and Auto, a full-service auto repair and tire facility, put the focus on its customer and has built its business from zero to $3.5 million in three years. The count of cars serviced has increased 20 percent a year, now averaging 60-80 cars per day.

 

 After starting and managing several similar businesses for others, owner Todd McIntosh felt that everyone should be able to get good service for their vehicle. “Not everyone can afford a Cadillac, Lexus or BMW and the exceptional service that it brings,” he emphasizes. “I wanted to make affordable service available to everyone.”

 

And he has done just that. His customer service rating, as tracked on a weekly basis, is consistently 97 percent and higher. He believes this measurement is one of the keys to his exceptional success in a business with a traditionally poor reputation for service.

 

He measures the level of his service in many ways.

 

When customers’ cars are delivered after the service is performed, they will find an evaluation hangtag asking, “Tell us how we are...