Take Care of Your Customers or Somebody Else Will

Keeping customers happy is something that most businesses obviously strive for. In today’s world economy and in the age of information, accomplishing that is more difficult that it has ever been.

The Internet and other resources have allowed all of us to become better-educated consumers, changing the definition of customer service. In addition, companies like Amazon, Apple, and Nordstrom, have essentially reset the customer service bar for all businesses.

When a customer interacts with a business today, that business is no longer being compared to its direct competitors or peers. Rather, today more and more consumers are judging your business against their most favorable customer service experience. If your customer purchases a book from Amazon and the process goes seamlessly, as it most often does, they tend not to be very charitable or understanding if they experience less than that with your business.

Exceeding customer expectations through quality customer care, proven communication techniques, fairness, and mutual respect is key to ensuring your customers come back in the future.

Supporting that statement, the following are the most common reasons companies lose customers:

  • Customer dies, moves away, or closes: 4 percent
  • Customer is influenced by friends or business associates to consider another product: 5 percent
  • Customer is lured by a competitor: 9 percent
  • Customer is dissatisfied with a company’s product: 14 percent
  • Customer is turned away by an attitude of indifference by a company: 68 percent

(Source: Lisa Ford, David McNair, and Bill Perry. Exceptional Customer Service. Adams Media Corporation, Avon, MA)

When you realize that studies support that even a customer’s dissatisfaction with your product will not drive them away as quickly as poor customer service, you quickly appreciate that it is an area of your business you cannot afford to ignore.

Five recommendations:

1. Develop and maintain a customer-driven vision.
2. Identify your target customer.
3. Develop a plan to fulfill the customer service vision.
4. Hire, develop, empower, and reward associates to carry out the plan.
5. Repeat all of the above.

Step 1: Develop a Customer Service Vision

Organizations that enjoy a reputation for providing great customer service have one thing in common; they have everyone in the company committed to meeting the needs of the company’s customers. Creating a vision and developing a statement helps establish the working framework necessary to achieve your goals.

Developing a customer service vision statement, similar to a mission or purpose statement, is a powerful step in beginning the process. Like a lighthouse beacon, it serves to provide guidance, direction, and inspiration throughout the organization.

Step 2: Identify Your Customers

It may sound rather simplistic, but it is important to define who your customer is. As an example, Nordstrom Department Stores understands that their clientele isn’t the same that purchases clothes from K-Mart. They know who their customer is; and they seek to appeal to that customer in everything that they do, from store appearance, to product selection, to customer service.

Step 3: Develop a Plan to Fulfill the Customer Service Vision

When developing a customer service plan, a company must identify customer’s needs. Knowing your customers’ needs is crucial to your survival. And, to do this, you must ask, listen, and respond.

Step 4: Hire, Develop, Empower, and Reward People to Carry Out the Plan

Hiring is all too often a paper drill revolving around a candidate’s resume. Unfortunately, it’s not always the ideal hiring procedure for companies focused on distinguishing themselves through customer service. Companies like Amazon and Southwest Airlines are famous for looking beyond an applicant’s prior experience or education, instead focusing as much or more attention on how they feel an applicant will fit into their culture. Another Customer Service Champion, Zappos, defines it as:“Ensuring you have the right people on the bus, and in the right seat.”

Developing successful customer service reps includes: using training materials that produce measurable results; providing the necessary tools and product knowledge for the employee to do his or her job; and investing sufficient time and resources during their development.

Empowering employees is critical to ensuring outstanding customer service is delivered. Beyond putting a heavy emphasis on training, it is important to make sure associates know that the company has great confidence in them. Nordstrom as an example reminds their associates to always set personal and professional goals high and to remember rule number one: “Use good judgment in all situations, especially when dealing with customers. There are no other rules.”

Finally, rewarding employees is important. Favorable employee reviews, raises, and bonuses—when tied to good customer service—almost always pay dividends. Rochester based grocery chain, Wegman’s which is consistently rated high in customer service, has said: “No matter how much we invest in our employees, we get much more in return, as they take care of our customers.” The privately held chain has 84-stores, generating over $7 billion in annual sales and is widely recognized as an industry leader. If you believe you have a difficult time distinguishing yourself from your competitors, think about the challenge a grocer faces in convincing a customer to buy the same box of cereal from them that they can buy from every competitor in town. If you have ever had the pleasure of shopping at Wegman’s, however, you’ll quickly appreciate the power of outstanding customer service and the role that happy employees play in ensuring that experience.

Step 5: Repeat the First Four Steps

The final step in building successful customer relationships is repeating all of the aforementioned points—over and over again. Building good relationships with customers is an ongoing, evolving process. It is not something that is taught or reviewed once and then shelved; instead, it must become a part of a company and “employee-owned.”

The vision statement and the company’s customer service goals must be constantly reviewed and not etched in stone. Companies should be prepared to revise their service goals if necessary to meet their customer’s changing needs.

Customer expectations change, needs change, and the industry you are in can change. Companies must be willing to again ask, listen, and then respond to the customers’ changing needs. These changes may result in revisions to the company’s customer service plan. That plan must be reviewed on a regular basis and the results measured against established benchmarks, accordingly adjusted. The only absolute thing about a plan is that you need one.

It is also important to recognize that within your own organization, you may find competing needs and interests that conflict with the cost of providing or funding high levels of customer service. I assure you, however, a lot more firms go out of business because they didn’t have enough satisfied customers than go out business because they didn’t have the latest copy machine.

The great retailer, Stanley Markus, once said: “The objective of any business must be providing service and products that are good enough for people to pay you a profit for it. That sounds like semantics until you start applying it. I found that when I took care of customers extremely well, and made them the focal point of my business, everything else, including profits, inevitably flowed.” If you examine Fortune Magazine’s list of the Most Admired Companies in America, you’ll find most share that same sentiment.

And finally, it is good practice to constantly challenge the status quo, particularly when it comes to customer service. Forget the old adage, “If it isn’t broke, don’t fix it”, which probably was passed on to you by a competitor. Winners are always seeking ways to improve, especially in their relations with customers.

Michael Schaffer is president of Tornado Industries, Chicago, a manufacturer of commercial cleaning equipment, and a senior executive with Tacony Corporation’s Commercial Floor Care (CFC) Division.