Take for example the beleaguered airline industry. We have seen service dwindle to non-existent. You check yourself in at a kiosk, and if you want anything more than a lukewarm beverage, you have to pay for it. And pay some more if you want your bags to fly with you. Christopher Elliott, who writes about the travel industry, points out (sarcastically) the  “5 Customer Service Lessons from the Airlines” in Bnet.com. Basically, airlines have felt free to follow each other into treating the customer as an afterthought.

If you want to be leading on customer service, you should not be following poor examples of service. Just because the other guys are doing it, does not make it right. Instead, work on building your customer service.

Carol Tice gives some good tips on “How Your Business Can Build Customer Loyalty–and Profits” on Entrepreneur.com. She recommends the following:

• Answer customers as quickly as possible
• Be human
• Leave a good impression both on entering and exiting

To be a true leader is to cut the path, making tough choices in the interest of a greater good. Customer service deserves leadership.

ARMA, Inc. has made customer service a mandate for our company. It is part of our business philosophy. We don’t have a customer service department, we simply perform the best service for our customers. That is how we look at customer service.

For bigger companies, customer service is a department, with its own staff and budget.  Beyond giving it enough monetary and personnel support, customer service needs to be thought of as IMPORTANT. In many companies,  new business development or sales and marketing are considered of prime importance. What if customer service were linked to these functions? After all, past performance with customers, and future resolution of any customer issues are an integral part of closing the deal, or making the sale.

Customer service is important. Companies and organizations that neglect customer service end up paying the consequences. Think of the last restaurant that closed in your neighborhood. Did it close because the food was bad or the wait staff inept? If so, this was a customer service failure–forgetting to put the customer first and center.  Have you changed service providers recently? Most likely, you did so not because of price, but because of service.

Make customer service a top business priority if you value staying in business!

Often, once a sale has been completed or an issue resolved, customers hear nothing more from the organization. Think of how many times you have stayed at a hotel and not heard a word after you signed the credit card receipt. Or if you do hear something, it is an offer to sell you more service or product.

To retain customers and encourage loyalty, organizations have to figure out ways to reward loyalty and appreciate their customers’ patronage. For small businesses, thank you notes and calls are feasible. For larger businesses, there could be loyalty programs, repeat business discounts and special treatment.

On the Small Business CEO blog, in the post “The 4 Biggest Customer Service Mistakes You Can Easily Avoid,” number three is “being inaccessible.” Many times businesses bend over backwards to seal a deal only to become silent once the sale has been made.  Many businesses spend thousands of dollars to sell a product/service and then, will not spend the cost of a first class stamp to thank a new customer for his/her business.  This does not encourage customer retention.

Basic customer service avoids losing customers, but “advanced” customer service will work to retain customers, increase loyalty and increase sales.

According to an article on Canoe.ca, TD Bank (a Canadian bank that has branches in the Eastern U.S.) credits customer service for its turnaround.

“But Hockey [head of Toronto-Dominion Bank's Canadian branch network] believes the secret to boosting market share is as simple as a slapshot: build more branches and treat customers well.

“Proximity of the branch to home or work is the number one reason why consumers choose to do their banking with any institution,” he said in a interview at the bank’s Toronto headquarters.

This strategy has underpinned TD’s transformation from a struggling bank stung by bad loans during the tech bubble a decade ago to a lender known for stable earnings, with a share price near record highs and a favored spot among analysts.

TD Bank has focused on customer convenience by introducing Sunday and longer daily hours, having a “caring culture,” and opening many branches so that customers can find one close by.  The bank has recognized that its profits are tied up to having customers, and happy customers are likely to stay with a bank. Read more here.

Businesses who recognize the primacy of their customers will do better and stay around longer than businesses who are solely focused on the bottom line costs of providing exceptional customer service.

Imagine that a customer calls and speaks to a clerk who provides the wrong information or is rude. Imagine a customer speaking to a receptionist to find out basic information and the receptionist is unable to help. Imagine any situation where a customer calls and gets rebuffed in one way or another. That customer is not going to be happy. He or she may not remain a customer.

Sandra Sunken wrote “Customer service is party of everyone’s job” in the Ventura County Star, and it should serve as an important reminder that customer service contributes to your bottom line. She recommends the following:

Customer service includes every element of the sales transaction between your business and a customer. Although you may consider customer service just a matter of being polite to customers, it actually involves many areas, including the following:

Being truthful in advertising your product or service.

Providing a product or service that meets or exceeds customer expectations.

Being prompt in delivering your product or service.

Letting customers know you appreciate their business.

Handling customer complaints or other concerns promptly and politely.

Being polite and cheerful in dealing with customers — even when they’re “just looking” instead of buying.

Even if your company is not big enough to end up on a national list, you don’t want to be blacklisted even among one customer (and his/her circle because of the power of word-of-mouth). Make sure you have customer friendly policies on your books, and customer friendly staff. The  Local Plumbers Blog has five great customer service tips (read the whole article), which are:

1. Improve employee relations
2. Make changes
3. Value current customers
4. Keep your promises
5. Answer your phone correctly

It is amazing how many small business (and big ones for that matter) fail on this simple and self-evident tactics.  How many times have you called somewhere and had someone answer hello while obviously eating, so much so that you ask is this Joe’s Pizza?  Or businesses who fail to deliver what and when they promise. Or businesses that go all out looking for new business at the expense of their current customers.

Make it a point to be listed as having good or excellent customer service. That is the only list to be on.

• Good customer service creates customers who promote your business. “Promoters” help a business grow.
• Associates have one task: focus on the customer.
• Survey your customers to know where you stand.
• Train your associates (Home Depot has a curriculum called Customer FIRST).
• Conduct performance reviews of your associates against the priorities you have defined.
• Reward associates who provide exceptional customer service.

The upside of the focus on customers and customer service can be seen in sales. Ellison says the following:

We are looking at ways to measure the exact impact our efforts have had on sales. The first and second quarters of this year were our first positive comp quarters in the U.S. since 2005. The economy has been a little better, but our associates’ efforts have played a role, too. We have a very simple belief: If you combine a compelling merchandising offer with outstanding customer service, you will get improved transactions. And in our business, improved transactions lead to positive sales growth.

Home Depot has made a commitment to its customers, and may be reaping the rewards.

CBS Sunday Morning had a segment on the show this past Sunday about customer service.  They recounted the story of the Virginia woman who was so angry at Comcast and its lack of customer service, that she took a hammer to the Comcast office and starting banging on the counter to get somebody’s attention. The segment discussed how much it costs to provide live customer service–it is much cheaper to use phone trees. It talked about people having to hold for hours to get service.

Sadly, many companies provide bad service, causing increasing customer rage. Customers will remember the company—in a very negative way. And they will bad mouth the company.  A company’s reputation can be severely damaged by bad customer interactions.  The impact to reputation SHOULD be a part of the decision to fund customer service. In monetary cost, as the CBS piece indicated, a live call in the United States costs about $7 or $ 8.  However, the damage to credibility amount consumers also has a cost, but one that is not easily measured in monetary terms.

Reputation may be the most important thing a company needs to protect.  Companies should think twice about becoming known as purveyors of bad customer service.

In fact, 85% of those polled would be willing to pay more than the standard price in order to ensure a superior customer service. Of those, 76% would pay 5% or more; 55% would ante up 10% or more; 27% would pay a 15% or greater premium; 18% would add 20% or more; and 10% would pay 25% or more, according to a Harris Interactive poll conducted for RightNow Technologies.

The article also found that consumers who are dissatisfied with service warn others not to do business with the company in question.  The study by RightNow Technologies  found that 82% of consumers will leave a brand if it has bad customer service (this is the focus of a  blog post from Techcrunch).  Techcrunch reports this:

The Customer Experience Impact 2010 report reveals that 82% of consumers in the U.S. said they’ve stopped doing business with a company due to a poor customer service experience. Of these, 73% cited rude staff as the primary pain point, and 55% said a company’s failure to resolve their problems in a timely manner drove them away.

Almost everybody surveyed, a full 95%, said after a bad customer experience they would “take action.”

Clearly, customer service, both positive and negative, affects the bottom line. If people are willing to pay more to ensure a better experience, is it a good idea to raise prices in order to provide the ultimate customer service? The answer is not clear cut–how do you prove the higher prices are providing better service? What does better service mean for your customers? Is there premium fee that should be associated with customer service (like paying for the first class cabin aboard an airplane)?

In the end, each organization will have to evaluate its customer service, keeping in mind that potential customers may or may not be buying depending on the quality of service they are receiving. Ignoring it has consequences.

Customer service shouldn’t be about a department. It should be the entire company.

-Tony Hsieh, CEO of Zappos, speaking at the Inc 500 Conference, October 2010

Tony Hsieh, who wrote the bestselling book Delivering Happiness, is on to something. Customer service has to be an organizational ethos. By making it part of the company DNA, customer service will be reflected in everything the company does. If the company thinks and breathes customer service, it will have first-class customer service, it will be acknowledging that customers make the company.

It seems that American Express agrees with Hsieh. AMEX offers ten tips to improve customer service in this blog post by Brendan B. Read on TMCnet.com.  The first tip is:

1.         Make service your business by putting the customer experience at the heart of everything you do

The rest of the tips are equally good. We’ve discussed some of these before here, but it is worthwhile to read each of them, so we post them here:

2.         Great service starts with the people who deliver it – motivate and enable your employees to go above and beyond for your customers

3.         Let your customers measure your performance. Let them tell you what a great experience is. Their feedback is the most important measure for an organization

4.         Look at service from the customers’ perspective and ensure they have the best service experience possible. Recognize that great service doesn’t come down to what a company thinks about its performance internally, but instead is all about what the customer thinks after every interaction

5.         Do not think about service as an expense, but as a business driver.

6.         Look at customer service as an opportunity to deepen your relationship with your customers, not as a transaction

7.         Reward customer service employees based directly on customer feedback and behavior. For example: is that customer ready to recommend your business to a friend or colleague?

8.         Hire the will and teach the skill – recruit employees who are passionate about great service and fundamentally understand the service mindset – then you can teach the skills

9.         Get feedback from your customer service employees – they are closest to your customers and understand the most about what customers want and need. Don’t miss out on this incredibly valuable insight

10.       Learn from the best. Don’t just look within your industry – look at direct competitors and across different industries for examples of best-in-class service delivery and innovation

Make customer service an organizational priority or better yet make your organization be entirely about customer service.