Poor service is the number one reason American companies lose business. Research conducted by the American Management Association (AMA) has shown that 68% of clients stop doing business with a company because of poor service. Another AMA study revealed that 90% of clients who ceased doing business with a company made no attempt to tell the firm why. What is even worse is that the average dissatisfied customer tells up to 10 others of his or her dissatisfaction, yet the average satisfied client tells only five people. Tom Peters says that it takes $10 of new business to replace $1 of lost business.
To avoid the pitfalls of customer service, a company can follow a five-step process:
- Help staff clearly understand that little mistakes can lead to major negative consequences.
- Teach employees to be sensitive to the customer's timeframe.
- Show how complacency and assumptions about customers are detrimental.
- Improve the protocol of business relationships.
- Use personal notes to enhance customer relationships.
Our staffs may think that poor customer service, now and then, will not negatively impact business. The following illustration shows that for some customers, one mistake with a client could be too many.
A woman was once mistreated by a salesperson in a grocery store. Since she had been a customer for three years, it would appear that this incident should not have affected her loyalty to the store. However, this one act of poor customer service caused her to switch stores.
Twelve years later, she returned to the original store and decided to tell the owner what happened. He listened intently, apologized, and thanked her for coming back, then went right over to his calculator. He estimated that if she had spent only $25 a week for twelve years, he could have possibly lost about $15,600. If she had been happy, she probably would have referred others. The owner also estimated that if this woman referred five other people to his store at the same buying level, they could have spent as much as $75,000.
The above illustration spells out that one seemingly minor mistake can have negative consequences. The reality is that customers only see the attitude that is being presented, and whether a salesperson rushes a customer, is not respectful, or simply allows "having a bad day" to impact how they relate to a customer, it means bad service to customers.
One way to prevent mistakes, like the one above, is by making great customer service a priority at all levels. Unfortunately, for many companies this is not the case. Information gathered by the Service Management Research Group shows that 92% of CEOs say that the quality of customer service is the number one reason businesses succeed. However, when branch managers were given the same survey, they placed customer service below such priorities as short-term financial results.
Leading by example is one of the best ways to help your staff get their priorities in line with the company's. According to research conducted by The Nierenberg Group, 95% of sales employees said that better interpersonal communications would help motivate them to do a better job. Here are some tactics that you can use with your staff that will encourage better communications with customers:
- Openness and friendliness—management can show staff members how to be professional and personable at the same time.
- Offer assistance—managers should work towards being more proactive with their staff. When employees seem to be unhappy, it is important for managers to recognize that early, before that unhappiness is shared with customers.
- Give 110% automatically—while employees should expect that their requests to management will be addressed in a timely and proper fashion, managers can go the extra mile by giving a fast response to employee concerns and offer additional help.
You can further inspire your people when you acknowledge them for following your leadership. This can be done by saying "thank you" in the following ways:
- Give them a personalized handwritten note on company stationary.
- Send a personalized e-mail or fax; you can also send a copy of it to someone else in management.
- Give them a small gift like cookies or candy.
Setting Your People to Customers' Clocks
Whose clock really counts? Most companies have had customers who do not respond in a timely fashion. A corporation's attitude might be, "We have sales goals to achieve," or, "We must get all the customer complaint letters off our desks right away." So how can we move the customer service process forward without "pushing" the customer too hard?
When a customer does not call back after we have given him or her a great offer, it is critical that we do not badger the customer with demanding follow-up calls. These are the types of calls that try to disguise the real question, "I think it's time we close the deal or resolve this issue," or, "What's taking you so long?" Calls should never be harsh or impersonal because they can do more harm than good.
These types of calls can be avoided when earlier conversations include a couple of questions such as, "When do you need the product delivered by?" or, "When will you get back to me with the details of your complaint?" While attempting to move things forward, a company can become trapped by an internal deadline that will offend customers.
Another stumbling block for customers can be when we rush communications. This can occur when we hurry off the phone or send correspondence that is not carefully written. It tells the customer that you are trying to get through the process in a cold and mechanical way. Even when we have long lists of customers to handle, it can take very little effort to develop a personalized approach. Here are three ways to do it:
- Ask the customer how he or she wants the issue to be handled. Some people prefer that everything be done in writing, while others would rather receive a quick phone call letting them know that everything has been done. While your company might have good policies and procedures that must be followed, never lose sight of unique customer requests.
- Check on customers long after the problem. Many companies quickly process customer concerns. However, long-term follow-up is just as important. Encourage your people to mark their calendars for a month after the problem was resolved. Then have them call customers and do three things: 1.Thank them for their business. 2. Ask them if everything is still going as they want it to. 3. Let them know that no issue is too small to be addressed.
- Put a preventative plan in place. Customers often take their business elsewhere because mistakes are repeated. While we might do our best to fix the problem each time, the customer may lose patience. If your shipment to the customer is going to be delayed again, call the customer in advance, let him or her know, and offer to use a faster service at your expense.
One way to address this issue is by building relationships with support staff or departments you come in contact with. These are the people who are familiar with your relationship to your client. Here are some examples of people to consider:
- The assistant. If your main contact has an assistant, get to know that person very well. A good assistant often has as much, or even more, information than the person with whom you work with. Call him or her up, have a casual conversation, and ask upfront if he or she has any advice on the best way to interact with others in the office.
- The main receptionist. This person is usually seated at "information central." He or she can help you solve problems when your client is away. This person might also provide you with an insight into the company. You can learn when is the best time to make calls or who else at the company can be potential customers. The way to finish this process is to send the receptionist a thank you note or a small gift that shows appreciation for his or her help.
- Accounts payable department. When possible, we need to separate our direct contact from his or her accounts payable department. Our direct contact is usually more interested in the details of what they are buying from us. Therefore, when we get to know accounts payable person, he or she can help us with the details related to purchase orders and payments schedules. This gives us more time to focus on selling and customers service with our direct contact.
Even customers we know "like the backs of our hands" will change over time. Too often, assumptions are made about how long-time customers will respond to us. Realize that anything that is living needs constant nourishment, regardless of how old it is. Many times companies stop nurturing customer relationships after they have matured.
As time goes by, the same level of service becomes less effective. The lure of competitors will encourage customers to reevaluate their loyalty to existing vendors or service providers. A question that needs to be asked is, "What is the incentive for customers to stay for five or 10 years?"
National studies and data can tell us about customer attitudes, wants, and needs. However, these can never replace a personalized approach to keeping customers for the long run. Here are three things that can be done to personalize customer communications:
- Survey your customers when you do business in person or on the phone. Ask them if they would mind answering a few questions to help you better understand their needs. This provides a personal approach to surveying rather than that simply mailing out the forms and waiting for them to be returned.
- A personalized newsletter can also make long-time customers feel special. One way to do this is by taking a company newsletter or brochure and adding a personal note to it.
- When a customer makes a complaint, you usually do everything possible to fix the problem. To make your response have an even more favorable impression on the customer, bring the complaint to someone at a higher level at your company. Then ask that person to contact the customer and offer his or her apology as well. It will tell your long-term customer that his or her business is appreciated.
- Ask "dream" questions. After a period of time, you probably know what your customer needs. However, what is it that the customer dreams and hopes for? Inquire what it is that can be done for him or her that would exceed their expectations.
- Increase contact frequency. Sometimes our staff assumes that long-time customers will always be there, even if we let an extensive period of time go by without calling. That is a bad assumption because that is just when a competitor will be knocking on our customer's door. This means we need to find ways to stay in touch more frequently. The challenge is to do it in such a way as not to become annoying. This might include: mailing a newspaper clipping of an article of interest, writing an email that includes an inspiring quote, or remembering an anniversary or birthday with a card.
- Ask customers for advice. If our staff has done their homework, they should be experts in their fields. However, sometimes experts like to lecture instead of listen. Seeking a customer's advice and carefully listening to it can improve relations because it is one way to elevate your customer's ego. Encourage your people to do formal or informal surveys with clients. They can survey customers about trends they predict in the industry, or they can ask for advice about which trade or civic organizations are the best to be involved with.
Above all else, people want to be respected. They want respect for their position; they want respect for their thoughts and ideas; and they want respect from business contacts. There is a fine line between becoming "buddies" with a client and keeping a distance that appears cold and uncaring.
The first challenge is how our staff addresses customers, particularly new customers. The rule of thumb is to always address someone formally with a "Mr." or "Ms." until they give you permission to call them by their first names. It doesn't matter whether it is the receptionist or CEO of a company. The impression your people make at any level can echo throughout the company.
Finding a decision maker often requires talking to several people. All along the way, we leave messages and trails of conversations which lead to the right people. Some of those conversations may involve a "gatekeeper" who has tried to keep us out.
In addition, we often have to "step around" or "go over" people in order to get to the right person. However, when that happens, there could be a consequence because the people we go around may hold it against us. It is important that we and our staff remember to cover our tracks. Therefore, instruct your staff to quickly mend fences by apologizing to the people that they had to go around. It may be difficult, but in the long run, it will lead to better customer relations.
Improved protocol can also result from us reinforcing some basic customer service skills that can be easily forgotten. While many recent advances in customer service are technology-based, such as better data management, computer programs that remind us to call people, and sophisticated direct mail, these can never replace interpersonal interactions with customers. Here are some of the basic skills that require constant reinforcement:
- Have telephone sales and service people put a small mirror on their desk with the word "smile" above it as a way to remind them to have a cheerful attitude and to smile, even on the phone.
- Encourage people to use plain English when dealing with new customers. Often people try to impress others with industry jargon, and the customers feel alienated.
- Ask people to write outlines of sales pitches and responses to customer service issues. This is not a telemarketing script, but a guideline to help people remember all the key points that must be addressed for each customer contact.
- Find non-threatening ways to quiz your staff on product or service knowledge. Sometimes our people remember only a limited number of the benefits we offer clients. A pop quiz now and then will encourage them to better know what they sell.
If there's one theme in the customer-relationship management business, it is to find ways to personally connect with each and every customer. One powerful way to do that is to use "the power of three."
"The power of three" requires your staff to follow-up with three customers a day by writing a brief "thank you" note. The goal is to plant seeds to show customers how much you personally appreciate their business. Here are some good examples where personal notes work particularly well:
- "The big problem." This type of follow-up note requires a big "I'm sorry." This would be the customer that ranted and raved even though your company made everything right.
- "The win/win resolution." If a customer has been very cooperative in solving a problem, a note of appreciation can be sent. It really expresses, "Thanks, you made my day by being patient."
- "Gone but not forgotten." If we lose a customer, a follow-up note can be the best seed planted for a future reconciliation. It's a sign of true strength when we can admit that the customer was right, that we were wrong, and that we will truly miss his or her business. However, this note should also express the hope that you might be able to do business in the future.
Almost every customer service pitfall can be avoided by remembering four words:
- Dependability
- Efficiency
- Understanding
- Reassurance
About the Author
The Wall Street Journal called Andrea Nierenberg a "networking success story." She is a master at helping companies build their businesses by improving employee and client relationships. Andrea's training methods all focus on one principle: take care of your business relationships, and your company will prosper.
Works With Top Companies
With a 25-year sales and marketing background, Andrea heads The Nierenberg Group, a business consulting firm based in New York. Her company works with the world's leading businesses such as Citigroup, Time Inc., TIAA-CREF, Food Network, Lehman Brothers, Omnicom, Coach, Tiffany, and Douglas Elliman Real Estate.
Brings Global Experience to the Table
Andrea speaks in cross-cultural settings around the globe at internationally-known companies and conferences. Her travels have taken her to 25 countries in Asia, Europe, Africa, India, and the Middle East, and to such business hubs as Hong Kong, Tokyo, Paris, London, Stockholm, Frankfort, and Tel Aviv.
Business Expert in National Media
As a respected author and quoted expert, she has been featured in The New York Times, USA Today, The Wall Street Journal, Selling Power, Sales & Marketing Management, Inc. Magazine, The Associated Press, Chicago Tribune, Entrepreneur, and Training & Development. Andrea's wealth of corporate experience makes her a popular expert for television interviews. People recognize her from Bloomberg Business Television, Time-Warner's Fortune Business Report, Fox News Chicago, Wall Street Journal Weekend, and PBS/The Business Channel.
Top-selling Author
Andrea's book, Nonstop Networking: How To Improve Your Life, Luck and Career, is used by companies as a business development "textbook" and is a top seller at Amazon.com. Her second book, Million Dollar Networking: The Sure Way to Find, Grow and Keep Your Business, has become a "textbook" for her corporate training clients. It has received media coverage across the country and around the world, including Smart Money Magazine, The Toronto Sun, and BBC Radio (London). Her third book, Savvy Networking: 118 Fast and Effective Tips for Business Success, will be released in the fall of 2007.
Award-winning Experience
Andrea was honored by Office Depot and the National Association for Female Executives as Business Woman of the Year. She also received a Silver Apple Award from the Direct Marketing Association of New York for her long-time service.
Prior to establishing The Nierenberg Group, Andrea was publisher and sales director of Target Marketing Magazine and was a Dale Carnegie instructor for 14 years. She has taught her business-development courses to undergraduate and MBA students at the nation's top educational institutions, including the University of Chicago, Washington University, and New York University. She is also active in numerous professional associations, including the Executive Association of New York, Financial Women's Association, Advertising Women of New York, and the Rotary Club.
A native of Illinois and a long-time resident of New York City, Andrea graduated from Washington University in St. Louis with a degree in Business and Psychology.
More information about Andrea Nierenberg can be found at The Nierenberg Group Web site: www.mybusinessrelationships.com. She can be reached at (212) 980-0930 or at andrean@selfmarketing.com
