Cause and effect

Tuesday, September 29th, 2009

It seems obvious, given what we’ve discussed on this blog before, but customer service really does impact customer retention. A new study from the United Kingdom shows that telecom companies there have lost customers as result of poor customer service.

The article in TMC.net says that the study, entitled The Cost of Poor Customer Service: The Economic Impact of the Customer Experience (conducted by Genesys Telecommunication Laboratory)  found that ” roughly 73 percent of customers ended a relationship in the United Kingdom due to a poor customer service experience.” Additionally:

The study reported that the average value of each lost relationship is £248, or about $394, per year, for a total of £15.3 billion, or $24.3 billion, a major figure in today’s unstable economic times.

Clearly, there is a bottom line component to good customer service: it helps to stave loss. It also is good to keep in mind that each customer that is lost due to bad customer service carries an impact beyond his/her business: the business of people he/she knows and advices.  Bad word of mouth can also damage a business.

Thoughts?

Tags: bad customer service, economic consequences of bad customer service
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Employees are key in customer service

Thursday, September 24th, 2009

Quality customer service has been shown time and again to help businesses obtain and retain customers.  The key in providing customer service is with front line employees, that is, anyone charged with dealing with the public.

Airlines have many front-line employees: gate agents, flight attendants, reservations personnel and so forth. It stands to reason that these employees make a huge difference in how passengers perceive their flying experience.

Kevin Gray writes for BNet about how American Airlines dealt with incentivizing employees to provide better customer service. American Airlines had tried a bonus program for employees that helped make flights leave on time, but they failed to factor in weather. The program backfired as employees were frustrated. In 2007, American formed a Customer Experience Team .  Gray writes:

On the customer-service front, adding clear-cut metrics helped make the monthly bonuses less subjective. The staff was given certain requirements: greeting first-class passengers by name, for example. Bonuses varied depending on the marks the team received in customer-satisfaction surveys.

He adds:

In the compensation world, American’s pay-for-performance method is known as line-of-sight incentive; it gives workers concrete goals they can see and achieve. A big benefit of line-of-sight, argues Jim Kochanski, a national compensation expert with Sibson Consulting, is that it fosters positive peer pressure.

The take-away is that it is imperative to realize that employees are key in providing customer service. To incentivize them to do so makes good sense, but watch how you do it. Bonuses are one way. What are other ways companies can help improve employees’ stake in customer service? Please share in the comments.

Tags: airlines customer service, American Airlines customer experience team, Kevin Gray, role of employees in customer service
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Empathy or calmness?

Monday, September 21st, 2009

What type of customer service do you prefer? Calm or empathetic? Efficient or caring? The answer may depend on the situation and perhaps it is not an either or question.  Perhaps the best customer service is empathetic, yet efficient in taking care of our concern. After all, if all we get is empathy but not follow through then we are where we started. However, if customer service is calm, and efficient, but not understanding or caring of our situation, we feel misunderstood.

Anthony Tjan, blogger at the Harvard Business Publishing blogs has a fantastic post about what we can learn about customer service from smaller companies. He boils it down to empathy. Smaller companies care more about their customers, and can act in ways that are sensible to the situation rather than scripts and pre-ordained outcomes.  Larger companies teach their customer service representatives to be calm rather than empathetic. Repeat the same comments even if they don’t make sense to the situation at hand. Many of us get more flustered with this bland, uncaring response.

Again, perhaps companies that get the right measure of empathy and calmness, efficiency and understanding are the ones doing the best job. We often need a sympathetic ear, but we also need action.  What do you think?

Tags: calmness in customer service, efficiency in customer service, empathy in customer service, small company customer service
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Extreme customer service?

Thursday, September 17th, 2009

As we have discussed before, customer service has increasingly become a differentiator in business today. Some businesses are using better customer service to set them apart, to drive traffic and to increase sales. Today we came across a press release about a new online businesses that sells designer women’s shoes.  To se the business apart, the owner has decided to use “extreme” customer service, including staff availability on telephone, Twitter and others; hand written thank-you notes; and the ability to try the shoes for free.

We think this is a good tactic.  Extreme customer service may turn a one-time shopper into a loyal customer. It has been said before that you get 80% of your business from 20% of your customer base.  So it makes sense to build customer loyalty.

Do you have any examples of extreme customer service? Please share them in the comments. We are interested in knowing what companies are doing to attract and retain new customers.

Tags: customer loyalty, extreme customer service
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Some companies are getting it

Tuesday, September 15th, 2009

You may have heard this week that General Motors (GM) is offering a customer satisfaction guarantee to people who buy its cars. Basically, a GM customer has up to 60 days to return a car is he/she is not satisfied, and get a full refund.  GM is trying to improve its customer satisfaction by giving customers peace of mind about a large purchase. It is also getting some great publicity mileage out of it. You can read more about GM’s program here.

Verizon has been plagued by a bad customer service reputation. Verizon Southeast (not country wide) is trying to remedy the situation by introducing the “Verizon Service Commitment,”  as reported here by the St. Petersburg Times. The company is publicizing the new policy in a a series of advertisements running in Florida.

The bottom line is that these large companies are coming to realize that customer satisfaction is an important business goal. They both are pledging/guaranteeing that customers will be satisfied with the product/service. An added bonus, which we are sure is intended, is the positive publicity this type of program elicits.

Your thoughts?

Tags: Customer Satisfaction Programs, GM guarantee, Verizon Service Committment
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Customer service is a business strategy

Friday, September 11th, 2009

Many think of customer service as a tactic–something to be deployed to quell customer unhappiness. In fact, customer service, as we have discussed before, works best when it is proactive, when it attempts to stave off customer unhappiness instead of dealing with complaints only.

Nissan South Korea agrees. It’s CEO, Greg Phillips, was interviewed by the Korean daily, JoongAng Daily. Here is an excerpt from his response to a question regarding marketing:

“What works the best, however, is word-of-mouth, and this is only achieved through first-class service.

Sales sell the first car, but service sells the second, third and fourth cars. Our focus on service can help us build trust with our customers as we gain their confidence. We are aiming to make long-term commitments rather than a short-term sales increase.”

Read the entire interview here.

Phillips is deeply aware that service is important in ensuring a happy customer experience. Happy customers are return customers, or customers that help in word-of-mouth (WOM) marketing. Making service front and center becomes a strategy to ensure positive WOM marketing.

Tags: ensuring customer satisfaction, WOM marketing, word-of-mouth marketing
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Evaluating your efforts

Tuesday, September 8th, 2009

How can you know if your customer service is up to par? You may hear negative feedback if something goes wrong and a disgruntled customer writes a letter to management. However, you want to know how you are doing before things get out of hand.  You need to conduct an evaluation.

There are several assessments that are important:

• Staff performance
• Customer satisfaction
• Identify customer requirements

Periodic evaluations and audits of your customer service efforts will ensure that you are meeting your customer service targets.

You can conduct these assessments in many ways. One way is to hire an outside firm that specializes in customer experience assessments (mystery shoppers). Another is to have outside companies administer specialized questionnaires to your customer service staff.  Yet another way is to have customer panels to evaluate the customer experience and to identify what is most important to your customer base.

Whatever method you choose, evaluating your customer service performance is one of the best ways to ensure that you are meeting your customer expectations.

Tags: customer service evaluation
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Mom and Pop were right

Thursday, September 3rd, 2009

This is a post about retailers.  Perhaps more that in other industries, customer service makes or breaks a retail experience. As the insightful article in The Gourmet Retailer, “Commit to Superior Customer Service” by Rick Miller,  points out: “By and large, the overall quality of customer service is declining, but individuals and companies that deliver exceptional service will stand out and be rewarded at the expense of those that don’t.”

It turns out that Mom-and-Pop stores were doing it right. That is, they were working hard to ensure their customers were satisfied. Why? Because they understood that customer satisfaction could make or break their business. In many retail stores today, clerks are bored and uninterested, and uncaring. There is no personal stake in keeping customers happy, or even in helping people out.

How many times have you walked into a store just to be dismissed by a surly employee? It happened to me just yesterday. I entered a store and said a cheery good morning. The employee was on the phone and grunted at me, yes, he grunted at me. Needless to say, I am not encouraged to ever go back to that store again.

There are solutions to this. First of all,  retailers need to understand the importance of customer service. Second, retailer need to relay this importance to their employees. And third, and perhaps most important, retailers need to provide adequate training to their employees about customer service skills.

Tags: mom-and-pop customer service, retail customer service
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Anticipate

Tuesday, September 1st, 2009

Most of us only think of customer service as dealing with problems after the fact. Something is broken or needs to be changed so we contact the company or organization to help resolve the problem. True customer service, that is, customer service that is focused on the customer, anticipates problems. If there is going to be a foreseeable problem (production delays, personnel problems, etc), proactive customer service notifies affected parties before the fact. By anticipating a problem and informing customers, companies can stem the tide of discontent that will inevitably arise from the problem. Plus, it allows the customer to make decisions prior to the event, giving them a sense of control.

Southwest Airlines understands the importance of anticipating problems. The airline has implemented an automated system to inform customers in the event their flights may be cancelled or delayed due to bad weather or other causes, as reported in CIO.  As the article points, Southwest has a manager whose title is “senior manager of proactive customer communications.”

It seems obvious that being proactive and anticipating problems can really help a company to remain in good standing with its customers. Yet, many companies are slow to respond even after problems arise.  Proactive, anticipatory customer service needs to be part of the company culture if it is to succeed.

Have you had an experience with a company contacting you to resolve a problem?

Tags: anticipate problems, proactive customer service, Southwest Airlines proactive customer service
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