Insight Community



Filed Under:
customer service

Companies:
american express


Closed: 24 Mar 2009, 11:59PM PT

Earn up to $200 for Insights on this case.



packaged

Improving Customer Service For Better Sales

Continuing from our earlier cases, American Express is sponsoring more conversations here in the Insight Community concerning how small businesses can handle the current economic environment. Contributions to our past discussions have made their way to American Express' OPEN Forum blog, and we're looking for further insights that will complement the topics on the economy section of the OPEN Forum blog.

Given the economic slowdown, many small businesses are putting in some extra effort to retain and gain customers. How can small business owners effectively execute improvements in customer service for this? How should any changes be measured to determine if they work? When does a small business owner know when customer service is good enough? What can managers do to encourage and inspire great customer service from employees? These are just a few topic suggestions, feel free to contribute your own recommendations.

Ideally, submissions will contain specific examples and personal experience. Any insight that is selected to be published on the American Express OpenForum blog will be awarded a payment. You may submit multiple insights, but make each submission a post that can stand alone.

20 Insights

 


Customer service is simpy the process of acknowledging customer concerns.  We put fancy processes in place to measure and gauge the results for big companies, but small ones usually just practice listening to the people paying the bills because we need them more than big companies.

In a tight economy word of mouth and retention are two of our most potent revenue generators. There are three areas of Customer Service every business can measure and improve.  Here are my suggestions and experiences.

Listening: 

Listening has never been more important or easier.  The easy case is simply making sure that employees know the importance of listening to a customer's concerns. Most complaints can be addressed with acknowledging customer concerns.  People like to be heard.  Taking the time to listen, whether on the phone or in person, yields a lot of benefit.  To improve, make sure you're asking customers if they are satisfied.  It seems simple, but fast food companies and call centers are learning to ask that question, "did I fully satisfy your needs today."  It works even when you know what they are doing.  Don't you find yourself answering, "I was fully satisfied today," and feeling good when you call your credit card?  

I'm an online guy, so I set up monitoring for all of my clients.  This includes Google Alerts, RSS feeds of local news stories, and increasing, RSS of Twitter search strings to make sure that problems, and new business oppportunities are fully met. Listening is important for personal contact, but using free automated tools, we can now expand our reach to 24/7 monitoring of our brand, company, and even individual employee names.  The process is easy and pretty painless, and online listening has to be integrated into your customer service, as many of your best customers won't take the time to address someone personally, and prefer to do so in the relative anonymity of an online site like Twitter or Facebook.

Responding: 

Listening matters because it tells the customer we value them.  Listening is powerful on its own, but responding is the second piece of validating customer complaints.  An employee who listens and doesn't respond can be a bigger liability than one who ignores the customer.  Are your employees empowered to make decisions?  Do they know which decisions they can make and which ones need approval?  And are you dumping the hard work of confronting company weaknesses on employees with no power? 

Clear instructions on how to handle adverse complaints (and compliments) should be a part of all employee training.  Recognize that employees have different backgrounds, and you don't want someone utilizing training from another company that doesn't fit your process.  This actually happened to me years ago.   I worked for a Mexican restaurant as a waiter that empowered employees to comp meals that had mistakes. I held a second job at a national eatery, and when a series of mistakes involving a basket of chicken wings couldn't be solved, I comped the chicken wings without approval.

This actually led to disciplinary measures (just verbal), but I quit shortly after.  I was on the front lines, and my incentive was maximizing tips.  When a customer was angry at me for something that wasn't my fault, I sought to correct it. When that didn't work, I acted outside of my authority, based on the training I received from another company.

You may think I'm talking about waiting tables, but even people who deal with prices in the hundreds of thousands have this problem.  Mortgage dealers, auto dealers, and equipment salespeople find themselves in positions without the ability to respond.  Why do we hate buying a car?  It's because car salespeople don't have any authority, and we spend a lot of time talking to the wrong person.  Are your employees capable of responding, and are they trained to do so according to your company?

Informing:

A client of mine was shocked to find their email address - the one on their main website, hadn't been answered in over a year.  As typically happens, a mailbox was set up for an employee to monitor, but when that employee left, no one knew to forward the contact@company.com address elsewhere.  This was no microbusiness.  This was a major brand, and it happens a lot.

Information is about directing customers with new business proposals, complaints, compliments, and suggestions to the appropriate people.  We set up sections of the website for customers to use, but customers don't want to use our website.  We've been trained for over 15 years to be dissatisfied with what companies offer online.  Why do you think blogs are top search results?  People click on blogs because they know a person is behind it.  We're so frustrated with automated processes and processes in general, that we want a live person to be looking at our problems.

Information isn't just shuttling people to the appropriate departments.  It's about explaining to customers why they're being shuttled there, and assuring them they will be taken care of if they just follow the rules.  Informing can include adding an email address or Click-to-Call or an instant chat to the website, but text around those contact points should explain what to expect.  FAQ sections are there for users, but what if you pulled out the FAQ and used it as prime real estate?  Starbucks has a big sign at the cash register to explain returns now - not because they are required to, but they want to let people know upfront that purchases need receipts.  Make sure your POS materials and your website actually solve a problem, and don't be afraid to ask, did we answer your question fully, when you're done (also fix that email address problem). 

Conclusion:

Here's something to take with you.  We look at our own company to determine where we need changes, but we'd be well suited to go out to the marketplace and look at the best examples of customer service.  Retail store locations, restaurants, and even government offices provide a wealth of information on good and bad customer service options.  To improve your customer service, analyze "why" these companies implement their policies, and see if you can apply them to your company, both in person and on your website.

icon
Joseph Hunkins
Tue Mar 24 10:21pm
the process of acknowledging customer concerns

An excellent, key point. In fact simply being attentive in some cases can be as important as resolving disputes in favor of the customer. Customers expect and deserve respect, so even if a demand can't be met one should explain the company position thoughtfully or face the frustration we have all experienced.
Case Sponsor
icon
Michael Ho
Mon Apr 27 11:10pm
Hi Jim,

Great post! You can also see it here:
http://blogs.openforum.com/2009/03/23/the-lri-of-customer-service/

(Th anks for being so patient... We're almost done selecting the posts for the American Express OPEN site.)

Mike
icon
Brandy Pelzel
Fri Mar 11 10:04am
I think listening is so important. Your business will actually be better off if you understand what your customers want and then provide that service to them. One other way of mining that data, at least for service-based businesses, is to take a look at the most popular services your existing customers schedule with your employees. For example, you can simply look at a service report in your appointment scheduling software to see the most popular and least popular services. This will help to tailor new services for your customer base and will help you decide what to advertise for new customers.

This is one of the most difficult areas for a small business. Speaking for myself, I spend a fair amount of time keeping current on IP law, and innovation generally, as well as trying to keep reasonable financial and historical records (and figuring out what should be routinely discarded to further protect my client's privacy).

The last thing I need is to add in personal relations, but it is essential. First, what can I do that is not perceived as presumptuous or an invasion of privacy? What can I do that will be perceived as caring and listening?

In my case, there are very few things - I can keep a database of matters common to the public record, and I can try to key on things that might be appreciated - birthdays, if appropriate (not always appropriate, by the way), holidays, if appropriate (usually), and little items I can put into the file that won't be offensive (is-isn't married, has-hasn't kids, is-isn't in a high stress occupation (as in, Doctor, I know you are very busy, but I want to say "hello")), anything that makes the client more than just a "number". It is a pain, sometimes, but we really owe that sort of respect to everyone, and especially the people who pay us!

At my place of business we have a policy that is strictly enforced requiring that all accidents 1) are reported, and more importantly that 2) a meaningful corrective action is devised and implemented to prevent a recurrence.

The reporting is essential to MONITORING progress toward our goal of zero accidents. The corrective action (fixing the problem) is essential to MAKING progress toward that goal.

I've been to countless hospitality-oriented businesses that elicit feedback on customer service. I can't think of one that made a visible and meaningful effort to improve based on the feedback I provided. I therefore feel as though I have no incentive to waste my time trying to help them do their jobs better (am not likely to keep filling out those little cards, or completing their online surveys).

The (absolutely correct) wisdom is that the problem is at the Top. Management is the problem. Initiatives that are instituted without being driven from above FAIL. Someone will probably keep those comment cards printed and stacked by the cash register - because that part is easy. But they won't WORK HARD to make improvements that their boss doesn't care about.

To sum up: Management needs to devise and implement a plan for improvement that at its heart will include CORRECTIVE ACTION and MONITORING to verify that a real improvement has been made and is being sustained.

One last suggestion: Have the courage to let your customers give honest, anonymous feedback, and then post that feedback prominently in public view. Even if the feedback is negative, irate, scathing, hang it up where your employees and customers can see it. You will hate having it there, and you'll work hard to make sure that you get fewer and fewer dissatisfied customers. Plus, it will give you the opportunity to open the discussion with every customer who walks in about what you are doing to fix the problems that led to each of those negative comments. It will be refreshing to your customers to see a business owner who genuinely takes customer complaints seriously.

Having dealt with customer service on an enterprise level in my work for over a decade and owning my own small business, I can say that the one single measurable information is feedback.  But not in the form of surveys or what not.

It's more difficult in these hard times to actually pay attention to this, but my opinion is that everything is always starting at the basics.  And the basics is to start a conversation with your customer.   This means, that you need to ask pertinent questions that illicit a response in a format that you desire.

Also, depending on the demographic, your conversation should be tailored towards that particular clientele.   You would find that those in marketing that are truly great tend to sell in different mannerisms to the different types of clients.  This is also brought forth in the type of conversation in customer service.

For example if you were to speak to a younger generation about how cellular phones perform, you would ask them about things like:

"Are we providing the right type of phone for your texting needs?"

"What would you like to see us do so we would pwnz our competition?"

In turn, the older generation's conversation piece would be more along the lines of:

"Is the type big enough?"

"Are the numbers large enough for you to see without your glasses?"

And while those aren't particularly customer service questions, it notes the differentiation between the types of audiences.

Having just the conversation is not the solution in itself.  Action and application is the key to this process and the conversation just begins the cycle.   Thus, negative feedback is actually one of the best types of feedback you can ever get about your business.   It sounds terrible, but most of the time, those that love your business will get drowned out by those that have complaints.   And those complaints on some level are every bit legitimate to how you perform for your customers.

If you take all of this into account, then you shift into a situation that is similar to my current business.   In both the development and the customer side of the business, we are willing not only to listen to the customer's needs, but set aside our current features to work on a need of the customers when we see that it can be applicable for the rest of our clientele.   This type of action/reaction started because we began our conversation with our clients by telling them that this was also THEIR product, and not just us providing a service.   If they wanted something, they had to speak their voice.

And so they do.

Overview of the Financial Advisory Business

The current financial crisis has small business owners scrambling to bring in new customers and batting down the hatches to protect their existing client bases.  Nowhere is this more acute than in the financial advisory business -- ground zero for the current financial crisis.  Advisors make money in 3 ways -- all significantly hit in this troubled market:

  1. fees on assets: Some advisors charge a fee based on a percentage of assets under management (AUM).  With performance down anywhere from 25% for typical retirement accounts to near 50% for more aggressive accounts, fees are significantly down, even assuming no attrition.
  2. commissions: This is more the traditional brokerage model where advisors are remunerated via a commission tacked onto trading activity.  Most investors, if they haven't sold out already, are sitting on their hands and activity is way down.
  3. per hour: Some advisors are moving to a model that compensates them just for time.  In a move to be as objective as possible, these financial experts consult on portfolios and receive money for their time.

With these traditional revenue sources down, I've been advising my peers (see my post on Jim Cramer and the future of the financial advisor) about finding new revenue streams that are ancillary to their current financial practices.  For financial advisors, it may be speaking engagements or teaching finance at a local university.  In addition, there are still hard and fast ways to continue to bring in new prospects through the front door.  Here are four things advisors can do right now to boost their businesses.

More importantly, I think hunkering down and focusing on current clients during this crisis will impact future business more than prospecting for new clients.  Customers are scared, hurting, and unsure of their futures and if a service provider goes the extra mile to provide service beyond what's expected, not only will clients stay sticky but the referral business on the other end of this crisis will be awesome.

Hurting clients must be treated as patients

Acute ankle sprain

Customer service is about providing what clients/users/customers need on their level, not the service provider's level.  If clients feel wounded right now, I suggest treating them as such.  When I was a high school and collegiate athlete, we learned a very easy pneumonic for treating everyday ankle sprains, called RICE, for Rest, Ice, Compression and Elevation.  I think RICE, and the treatment of ankle sprains, can shed a lot of light on best practices in customer service during these trying times.

Rest: Ease clients out of shock and help accept our new reality

Rest is all about repair.  When people experience shock and many body systems shut down, the result on the body as a whole is a heightened sense of stress and fear.  It's these feelings that allow us to fight or outrun predators.  Investors/customers are living in an extended state of shock and it's taking an emotional and physical toll on clients' health. 

So, the first thing a service provider has to do is help their clients acclimate to what's occurred.  It's about acceptance.  If this means a change in quality of life due to a shift in financial health, a financial advisor must not beat around the bush but take active steps in explaining this to clients as well as making concrete plans to help the client steer through this change.  By helping the client accept and unload the burden they feel, this will help clients better cope with the current scenario and make any necessary changes required from the crisis.  I work with many religious clients and work with them to help regain their faith.  With others, we're redoing financial plans to see how bad the damage is and what we can do about it.

Ice: Reduce the swelling and inflammation of the crisis

Ice helps reduce the inflammation caused by the body's response to a physical trauma.  In times of financial crisis, many clients are feeling a 360 degree pinch.  The emotional strain of what's occurring right now is influencing their marriages, their relationships with their families and their quality of work.  Ice helps focus attention on where the wound is.  Ice is about focus.  Service providers need to help clients whittle down where the real issues are and address them at the spot of trauma.  As human beings, we frequently take feelings in one facet of our lives and apply them universally.  The message to financial advisory clients should be one of seriousness for what's been lost but also of optimism and hope that really, the world isn't ending.  We all just have less money -- let's figure out how to protect better what's left and how to recoup our losses.

Compression: Keep the clients close to nurse them back to health

Really great service organizations are doing things to swaddle clients during these tumultuous times.  This doesn't mean lavishing clients with gifts (although that's one way to show you care) but rather making sure the client knows he/she is not alone in this process.  This client compression, or customer hand-holding, will ultimately show that this relationship is about a lot more than business.  It's about shared life experiences and friendship.  Those bonds are hard to break -- no matter how bad things get.

We're making sure that every month we speak to every single client and repeat the same procedure the next month.  Even clients who are seemingly coping well are touched by the compassion and proactivity of this procedure.

Elevation: Making sure the client knows he's on the top of the pyramid

You've got to treat your customers right and not just because it's the right thing to do.  They need to feel that the focus of your business is providing them with service.  They don't want to feel like you're following the rules in some customer service manual.  From your words and deeds, clients want to see that your business -- from the owner down to an assistant -- is focused on doing things right for them.  The customer should not only be sublimated, but feel elevated to the top of your business needs pyramid.  This will result in happier, more satisfied clients, stickier relationships and more referrals down the line.

Summary

If much of this client service rhetoric sounds like psychotherapy, it does!  Providing a service, more so than producing a product, requires the ability to service in good times and bad.  In times of crisis, clients require more than when things feel easier.  By applying the same rules of first aid, service providers can assure that their clients accept the current scenario, keep it in perspective, feel supported and emotionally hugged by their provider and feel that the business is behind them in everything that's going on.

Case Sponsor
icon
Michael Ho
Mon Apr 27 11:14pm
Hi Zack,

Your post can also be found here:
http://blogs.openforum.com/2009/04/09/triage-customer-service-treat-your- customers-like-you-would-a-sprained-ankle/

Thanks!

Mike

Giving someone something always works; however, it is so common that unless the amount is unrealistically large, and verifiable, it tends to just be "one of those" sales gimmicks.

I do not need clients at this time, so I am not doing any advertising or client solicitation at present, but a technique I used in the past was both less expensive and more effective than a simple "X dollars off your next purchase" type approach (and just as verifiable).

I bought unusual gifts (in bulk, of course), such as lottery tickets or similar out-of-the-ordinary things; and simply handed them out to my clients with a simple "I appreciate you" type note.

In a sense, I was potentially giving them millions of dollars with the lottery tickets, and beyond any question there would be payouts - and not just to "preferred" people! In fact, all my gifts were handled by some third party of unquestionable status, so there was no question about the value conveyed, yet it was less than the usual 5 - 50 dollars.

While lottery tickets is the most prominent thing I can think of right now (this was some time ago), there were other things of clear utility and/or potential value that worked well, though I can't think of them right now. Examples, though not in that list, would be the pressure-indicating tire valve stem caps offered by some mail-order catalogs, but not generally known (mail order, with care, is really good - many people have been "stuck" so many times that they won't buy the stuff offered, but some of it is very good and very useful, so if you buy it, verify it is okay, then give it away, it will be novel!).

icon
Tyler Kneisly
Sun Mar 22 8:47am
How in the world do you equate giving away lottery tickets (or any type of giveaway) with customer service?

For practically any business type I can think of, giveaways are a marketing gimmick - a way to get the customer or prospect to remember you and your company's message, which is something you did acknowledge in your post. Giveaways do NOT, however, solve any customer problems or add any value to your company's offerings. A telco company giving away tickets to local events or an attorney's office distributing gift baskets is not the same thing as making their services more valuable to their customers.

I'm not sure what industry you're in (you didn't say) so maybe I've overlooked an industry where distributing lottery tickets would be considered a true "value-add". If there is one and you're in it, it remains unhelpful that you did not clearly describe your particular business and how giving away free lottery tickets truly equates to "Improving Customer Service for Better Sales" (ie solving your customers' problems and improving your sales as a result).

If your business somehow does solve your customers' problems by giving them lottery tickets, and if it does result in higher sales for your company, I admit I will be very interested in learning more about it. Until then, I remain skeptical and more than a little disappointed with your post.

I have worked with small businesses for many years.  Butcher Shops, Mortgage Brokers, Retailers, Restaraunts, etc.  

Customer Retention:

Engaging customers and ensuring that they know their business is valuable is paramount.  Everyday I have the option of walking to a large grocery store or a gas station market to buy small items like tobacco or soft drinks.  Though I enjoy the prices and variety the larger chain offers, I also enjoy going to the gas station because I know I will most likely run into one or two employees whom I can chat with.  At the grocery store I am not addressed by name, and I get the same question from the checker everyday: "How are you doing today?"  At the gas station, there are two employees who will ask me questions about the weather, my opinion abou the economy, other local news, etc.  I get to spend a few minutes complaining about work or bad mouthing politicians.  People like to be engaged by someone who is sincerely interested in hearing their thoughts.  When this kind of relationship is established it also much easier to get true information from a customer about the business.  Once a customer feels comfortable with a checker or customer service person, they also feel comfortable saying things like: "Boy I wish you guys carried such and such product" or "That certain employee really wasn't helpful last week when I was in here."  Shari's Restaraunt rewards their employees for the amount of names of customers they can remember.  They must address these customers by name when they walk in.  Calling someone by name scores huge points.  People like to shop at places where they are known and feel they are liked.  Here are some bullet point strategies for retaining customers.

Ask Questions - Did you find everything alright?  What do you think of our new product?  How do our displays look to you?  Do you have any suggestions for how we can do things better?  Would you tell your friends and family to shop with us?  If not, then why?  If so, then why?  Create a community of customers.  If you are friends with your customers they will want to help you make your business better.

Feedback Cards - Have a set of these cards out where customers can easily grab one.  Have them postmarked and postage paid so they can be mailed as well.  Sometimes customers just don't want to offer poor feedback to a person's face.  Give them the opportunity to explain why they are unhappy.  And most important of all!!!  Read them and respond if at all possible.  I can guarantee right now, that almost no one has ever received a response to their feedback card by mail or phone.  After you solve or address their problem they are going to be so surprised they will talk about it with their friends or family.  

Customer/Community Appreciation - Summer is coming up.  Great time for a barbeque!  Get a cheap hot dog stand to come to your parking lot for a day.  Have things for the kids to do.  This is a great opportunity to become friends with your customers.  There are many cheap ways to just show your appreciation.  For higher end product sellers with few customers, invite them formally to a dinner or party.  Again there are cheap ways to just make those personal ties with customers.

Gaining New Ground:

When the number one priority is getting people in the door...  

Articles - One of my favorite PR strategies is article writing.  If you have a website, you can offer a free article for download which requires the user to input their email address and name.  This helps to build a marketing list.  You can post newspaper ads telling people to call a number to get a free article, or tell them to visit a website to download it.  What do you write an article about?  Well it needs to be valuable information for potential customers and it needs to be on a subject you are an expert on as a small business owner.  One of the easiest ways to come up with article ideas is this...  What is the most frequently asked question by new customers?  For a butcher shop it might be...  "Can I get jerky and salami made with my own meat?"  So you write an article titled: "How to Turn your Meat into Something Edible"  with subtitle: "From Plain Old Roast to Yummy Jerky and Salami."  For a mortgage broker it might be: "How do you determine my interest rate?"  So we make an article titled: "What's in a Rate?" with subtitle: "Find out how your interest rate is calculated"  For a small retail store it might be: "What fruits are in season?"  So you have an article titled: "The Fruit Season Charts" with subtitle: "An easy way to remember what fruits are in season"  This strategy offers expert information for free to potential customers.  It can make the job easier for employees when new customers walk in the door.  It helps to build a list of potential customers that you can continuously market.  Anyone who is interested in your article should be a much better prospect than the general public.  Because you have narrowed them out of the pack, focus on marketing to them and converting them into sales.

Sales - I don't need to go into this too much.  Everyone knows the value of a sale.  Get the word out and they will come.

Referrals - Offer your current customers something special if they are able to bring in a new customer.  For retailers: Find out how much it costs to bring in a customer by any of your other marketing methods.  Offer that much to a customer who gets someone new into your store.  New customers give you their name and number which you store in your client database.  If checkers are taking the info, have the new customer fill out a card real quick before you give out the gift card to the referrer.  At the end of the day enter all contacts into a computer database.  For other businesses find something to offer to a referrer of new business.  Referrals are usually high quality leads and can be cheaper than conventional advertising.

Bottom Line for New Business...  I suggest the number one priority to be building up a targeted list of potential and existing clients.  An ad in the newspaper is seen by 100 people, 5 of which may be interested in your services or product right now perhaps 5 others might be in the future.  If you can capture the contact information of these 10 people, your next ad campaign you can spend money only on these targeted prospects.  You can send out postcards, newsletters, emails, fliers, etc. to your targeted prospects typically cheaper than you can advertise to a general public.  Focus on building a campaign which addresses prospects who may buy now as well as those who may buy in the future.  Cultivate prospects for future sales as well as giving incentive to buy now.

On a more general note, I think customer service (or any sort of customer relationship) is the same in all economies; it is just more crucial in a down economy.

The whole thing revolves around mutual respect. You must expect respect, and give it back - and not let the ocassional "weird" customer to throw you off track.

There is no "silver bullet", there is only honest give-and-take, or disaster, no in-between.

  Owning a small business is truly a constant crucible for judging your effectiveness in gaining and maintaining customer satisfaction.  The best small business owners leverage time-tested leadership principles and grow their people to focus on their customer's needs.  A challenging economic environment makes the value provided to the customer substantially more crucial, as any funding and purchasing will be closely examined and only spent in the most effective manner.  In order to position the company to lead, innovate, and provide unique value in an incredibly competitive marketplace, the small business owner needs to grow and rely on their life-blood – their people.  In my experience, the business owners adopting the following productive, proactive leadership traits and techniques will best position their company for success in any economic situation:

Share the Vision

  Small businesses have a very unique advantage over mid and large scale operations - They generally have an extremely flat organizational structure, and the clarity of the owner's vision can be passed quickly to every employee.  It simply takes honest and constant communication with your people. 

  This also creates an opportunity to hone your vision for the company's tone and direction, along with the agility to adjust, add, or augment any ideas gained while sharing it with the people of your company.  As this process of evolution occurs, buy-in is a natural and inherent part of the process.  Through this, your employees have an immediate understanding and stake in the company’s direction at all times.

  With full buy-in and ubiquitous understanding, your people can anticipate both company and client needs.  This is where the innovation occurs.  New ideas directed towards the company and customer's goal that allows your company to grow from simply providing a service or product, to becoming a thought leader and innovator. This is the extra value that budget-minded customers are looking for in this economy.

 

Analog Leadership, Digital Management

  The key to sharing your vision is time.  Face to face time with your people, and creating the time to make that happen.  Though they share the same key element to make this possible, the techniques for both activities are very different.

  A handshake, a warm smile, and getting to personally know your people are things that should and can only be done face-to-face.  For geographically separated personnel, video conferencing is a close second and extremely cost effective.  However, the nonverbal cues and personal bonding of live conversation is something that simply can’t be duplicated over the phone, or via e-mail.  To build a cohesive dedicated team this activity is absolutely necessary.  But how do we make the time required to do this?

  The answer lies in the incredible system of management tools available today.  From project management, to expense accounting - The tools to automate or ease the time burden of nearly every planning, organization, and accounting activity are provided by a wide array of vendors.  With the advent of cloud computing, these tools can be networked to transform a previously static, stuttering process into a seamless, instantaneously collaborative one.

  When your processes and tools are tuned and tailored to save the savvy business owner time, that time can be utilized in a small businesses' life-blood - its people.  When the business' people are energized and aligned, they will bring more value to your products and the customer.


Create a Culture of Excellence

  Small businesses have the inherent agility to strategically shape their structure to maximize value to the customer, which large companies may have too much bureaucracy to achieve efficiently.  This takes a conscious, focused effort from the business owner, but the result is sustained quality and output.

  Bringing a culture of excellence to your business begins at hiring.  With the incredible range of online recruiting tools available, the savvy small business owner can afford to never settle.  They increase their chances of finding the perfect person for the position, their team, and the company.  Recruiting the best people sends a clear message, and raises esteem in the company itself.

  Encouraging employees to use the processes and tools at hand, but always look for new and emerging techniques.  Encourage and reward the discovery of tools that are best-of-breed, with an eye toward affordability.  Discourage the use of shortcuts, but encourage the use of lean processes which reduce wait time and waste.  Incentivizing value added, reduced waste, and customer satisafaction also sends a strong message of the importance of these activities in your company.   

  When the small business owner focuses on excellence and professional growth in their personnel, it is ultimately the product and customer who greatly benefit.  Once again, the extra value your small business provides translates directly into strengthened, deepened business relationships and makes your company a preferred provider, through reference and referral, when cultivating new business. 

Non-Adversarial Incentivization

  Incentivizing the right lessons, the best product improvements, and customer satisfaction send an unambiguous message as to where your people's efforts are best focused.  However, care must be taken to not set up competitive incentives which set up and adversarial relationship between personnel - This can destroy morale and ultimately undermine efforts to promote teaming and synergy.  The foundation of competition should be versus stagnation, the status quo, and time/material waste.  Results should be measured in the areas that bring the most benefit to the company - Customer satisfaction, new business, and business development.

  Tangible/Intangible, Public/Private, and solo/team recognition are all viable options of incentivization.  Used effectively, it will strongly illustrate that your people have a true stake in the company - When the company grows its revenue and opportunities, the people responsible for that success appropriately benefit.

  In this economy, where funding is scarce and budgets are tightening to ensure business survival, customers scrutinize every expenditure.  They base their judgment, not just on sheer price, but the value they are getting for the amount they spend.  In a crowded marketplace, it is the small business owner that provides the most value per dollar that not only manages to survive but succeed.  And succeeding in this economic climate will equip your company to generate increasing revenue and opportunities when the economy becomes favorable again.  Effectively utilizing emerging technology to enables the small business owner to provide the vision and leadership necessary to focus their people on the product and the customer.  The extra value provided will be the difference between standing out in the crowd, and standing out in the cold. 

For my entire career, I have worked with start-ups:  both my own and others.  In the start-up environment, you cannot survive without superior customer service. 

There are two basic reasons why this is essential:

1)  Trusting a start-up / small busines:  When you are selling to larger corporations, the safe decision is rarely to go with a start-up, its safer to go with an established player - even if the start-up product is better.  The way to win over the customer is through an effective and attentive sales and account management process.  If you can properly respond to the customer needs, and make them feel as if they are your only customer - or that they are getting specialized attention, then you have something that often an established player can not offer. 

2) Up-sell and add-on sales are significantly cheaper than new sales:  As you attempt to grow your revenue base, selling to existing customers who are happy is a much easier proposition than trying to find, court, and close new customers.  While both needs to be done, its certainly easier to get a big chunk of revenue from your existing customer base by offering them additional services and features.

 

How to get this done depends highly on your business, but staying transparant on your business practices, your triumphs AND failures, and keeping your customer engaged in all steps of the process go a long way.  The closer you bring your customer into your process, the more that customer will understand that they can trust what you say to them - and the more likely they will be to get more engaged with you.  Products like GetSatisfaction which provide a transparant Knowledge Base are one step, but ultimately making sure that your customer understands everything that is going on in your business.  Most customers understand that not everything will go smoothly in all transactions (they rarely go well in their own businesses - so they understand that they won't in yours either) so keeping them in the loop with challenges you may have - and how you plan to solve them will help those customers feel trust in you - and will be something that will help increase sales with them and lead to referrals for you in future sales.

Managers, as always, should lead by example and should be creating a sales and customer service culture throughout the organization.  Unless every employee understands how their paycheck gets paid, the company is ultimately going to have a hard time staying competitive.  Once every employee knows that its about customers - then you will see that everyone works together for the customers benefit.

How do you know its working?  Are you selling new customers?  Are you getting referrals?  Are customers signing on for new products and renewing existing contracts?  Or are customers leaving?  Are they increasing or decreasing usage of your product?  Do they call all the time or avoid your calls?

Without customers - you don't have a business.  Servicing and providing value for them is the only reason businesses exist - so its clear this must be front and center regardless of the economy.

 

front facade of Michael's Fine Clothes For Men Michael's Fine Clothes For Men, a family-owned business in downtown Kansas City, Missouri, is surviving this recession by sticking to the same best practices for customer service that it opened with in 1905.

Alterations are free. Soft drinks for customers are free. The jelly beans and candied peanuts in the vintage vending machine on the counter are free. And the store keeps a file of each customer's purchases by size, brand, and color, to help them make selections on return trips, and to make it easy for friends and family to buy them gifts.

"At this point, lack of customer spending is caused more by all the doom and gloom in the media than by an actual crisis," says proprietor Keith Novorr, whose grandfather founded the store. "Even the people who have money aren't spending it. They don't feel good. That's why the businessman's job is the same now as it always has been: to make the customer feel good."

I was the head of media buying at Fly Communications, the agency that did most of Amazon's online advertising in 2008, so I know first hand about Jeff Bezos' philosophy of new customer acquisition: Ads are good only for driving users to Amazon.com as quickly as possible. When they get there, they'll experience the product itself, and they'll want to stay. No ad will ever live up to the experience of being on the site, and they shouldn't try. The value is in the service, and advertising is useful only insofar as it brings customers close enough to see that value in action.

It's a sound philosophy, but it isn't new. Novorr feels the same way about advertising for Michael's.

"Sure, I do some mailers, I so some TV," says Novorr. "But the point is to get people in the door. And once they get in the door, they want to spend money, because they realize that the cynicism they're receiving from the TV and the newspapers doesn't apply here."

Meanwhile, Joe Kepley, Director Of Development at Blend Interactive, a website shop in South Dakota, takes a bird's eye view of the crisis, and how his business responds to it:

"As the economy slows down, small businesses need to go back to the basics, and this usually means creating better personal relationships with their customers vs their larger competitors. You work harder to listen to what your customers want, delivery on their demands (even the unreasonable ones), and make sure they know you're working for them. The reality is that your customers may be scaling back this year, and you want to be near a chair when the music stops."

I asked Kepley for an example, and he responded: "We've started making broader use of project management and issue tracking software to make sure that we're addressing everything our customers ask for in as timely a manner as possible. When a customer asks for something, and we don't record it, in some cases we forget and the customer does too. But that could have represented a couple hours of billable work. Having things in the issue tracker makes sure that even the small stuff gets addressed."

How can you tell if you're succeeding at customer satisfaction?

"I think one good indicator is if you're seeing a lot of referrals from your existing clients.
They may not tell me if they're not happy (although a lot of them will), but they wouldn't be recommending us to someone else unless we were doing something right."

Meanwhile, Danika Dinsmore, of Vancouver, B.C. recently left SoMedia, a startup that creates and aggregates local video content. SoMedia's original business plan included expanding to many additional websites, but they ended up focusing on video production for the purpose of TV broadcast.

"They wanted to be a new media company because they thought television was dying," says Dinsmore. "And then it saved [them]."

Now she's a contract teacher for ABC On Set Tutoring.

"The film industry is recession-proof," she told me. "In fact, business has been picking up."

Michael Bennett Cohn
icon
Joseph Hunkins
Tue Mar 24 10:17pm
Great example of a business thriving in spite of the fact they are likely more expensive than some other stores. Michaels appears to have created a very powerful and pleasing sales environment.

I don't currently own a small business (though I have in the past) but I can provide insight from a customer's perspective.

Customer service is the main thing I look for in a business. You may have the lowest prices, the best selection, or the most convienient location, but if the employee service is horrible, I won't be coming back. I'm not asking for above and beyond service, just some common courtesy.

When customers come into an establishement, acknowledge their presence. Don't ignore them or pretend like you didn't see them. I've been in many places where the employees are too busy talking to each other to notice customers. What's even worse is when employees act like the customer is inconviencing them [the employees] by making them actually work.

On the other hand, don't smother customers with attention. The Japanese are the best about this. They greet customers as they come into the store but then leave them alone. Since most people, in my experience, are usually "just browsing" and rarely need a specific item, I think it's best just to leave them alone. My wife thoroughly enjoys shopping in Japan because of this reason.

Of course, the employees do need to be available when a customer needs help. There's few things worse than needing assistance and no employees can be found, especially at a service counter. I understand that, at times, an employee may be helping another customer or otherwise occupied away from their normal location but in that case, there should be another employee working the same area. At a minimum, have a bell or other announcing system to notify employees when a customer needs assistance, and make sure someone comes ASAP. I have walked out of stores and left merchandise on the counter because I couldn't get any help; I just vote with my wallet and go somewhere else.

Customer complaints are a sticky situation. I have been in places where a customer complained about a product or a meal and really just seemed to be whining. I firmly believe that the customer is not always right, just most of the time. The establishment should do what it can to make a customer happy but sometimes it's simply better to write off that customer. It's easier and cheaper to worry about the 99% of normal, happy customers than try to make that 1% of constant complainers happy.

One thing to be aware of is that not everyone will complain when service is bad. Personally, I find it easier to simply not come back to a store than complain. As a complaining customer, I run the risk of having to deal with surly employees and power-tripping managers. If you spend time reading the posts at The Consumerist, a recurring theme is bad customer service, especially when trying to return an item or complaining about something. And most of the comments from people boil down to, "Why do you continue to go there?". There are so many other options, especially with online stores, that customers have no need to have "brand loyalty".

This is where good customer service shines. Sometimes, you don't even have to compete on price. For example, at one car dealer where we regularly brought our car for service, the car would be washed and vacuumed when we picked it up, regardless of what service was needed.

At a different dealer, they only provided a free, basic car wash "coupon" for their automatic car wash. However, this was a public-use car wash so you had to wait in line for more than 30 minutes to use the car wash. Then, because you were using the free coupon, the attendants essentially ignored you because you weren't a "paying" customer.

Several more examples of poor service also involve car dealers. First, while waiting for service at one dealer, a customer came in looking to buy an SUV. The particular vehicle he was looking at had been sitting in the lot for 2 years but was still brand new (not a lease return or otherwise used). The customer was wiling to pay cash for the car but wasn't willing to pay the full sticker price because it was 2 years old. The dealer was completely unwilling to come down in price, even though the car was taking up space in his lot and hadn't been sold in years. The customer was only asking for a $5,000 price reduction but the dealer refused to budge. The customer ended up walking out and the dealer lost out selling a car that he couldn't seem to get rid of.

The second incident was when I was looking to buy a new Volkswagen. I called one dealer and told him that I already had the money for a car, I wasn't interested in financing, and I wanted to know what sort of a deal he could offer me. He stated that there was no negotion on prices, regardless of whether I had cash in hand. I suggested that I was perfectly able to find another dealer and he essentially told me that that was okay, implying some other sucker would come along.

One example of great customer service was when I was in high school. I had purchased a music cassette and opened the package after I left the store. That was when I noticed I had purchased the wrong album; I had been looking at the one I wanted and expected the whole stack to be the same. I realized my error and returned to the store, hoping that I could exchange it for the one I wanted; I knew that the store was under no obligation to accept my return since I had already opened it. Somewhat to my astonishment, the manager (who happened to be working the counter) allowed me to exchange the tape, even while admitting that he shouldn't be doing it.

As another example, I had purchased a cassette from the same store and my tape player ate it; the cassette wheels were sticking, causing the player to crumple the tape as it tried to feed it correctly. I returned to the store, again expecting them to not help me. This time, a regular employee offered to replace the cassette, even though the store could have stated that mechanical issues were the result of my tape player, regardless of whether the cassette was truly at fault.

In summary, customer service is what makes or breaks a business. People are always complaining about the service they get from the big corporations, how they are just looking out for their bottom line. Yet small companies can be just as bad. Whether a store is an independent, mom-and-pop business or a franchise of a world-spanning empire, customer interaction is where the money is, literally. Employees need to realize that their paychecks come from the people they are helping and pissing people off can lead to the need to find another job. Nowadays, finding new help isn't difficult; finding good help is the hard part.

 

Many businesses seek to prove to each customer that their business is worth frequenting.  However, this is not the only theoretical model on which a customer service discussion can be built.  Consider the following reversal of that model:

Every customer is a repeat customer until something at the business drives them away. 

I was recently driven away from a landscaping-related service by their insistence on repeatedly making phone solicitations for my business.  After asking for the calls to stop several times, I simply decided that they would absolutely never have my business.  This example would be a customer service nightmare for any company, and yet for many businesses, determining problems with their own business that are driving customers away is a challenge because they are so entrenched in the business that they can't see the forest for the trees.  I recommend frequenting other businesses and asking yourself the following question when you leave:

What is it about this place that makes me not want to come back here?

Earning first-time customers is prectically automatic, and yet many of these customers don't come back.  Why not?  One obvious reason is that the business didn't offer what they were looking for, which could indicate a broad-scope problem in the branding and market positioning of the business. If I expected to see an item X and the business didn't sell item X, that exchange should prompt several questions:

  1. Why did I expect to see item X if the business doesn't carry them?
  2. Is the business not effectively communicating their actual product line to potential customers?
  3. If I was right to expect item X, why didn't the business have them in stock as expected? 

After careful observation of these characteristics in other businesses, questions about one's own business should become more obvious.  Asking these questions to customers is paramount, followed by a thorough and unbiased personal review of the business. 

A People Problem

Employee morale can do as much to drive away customers as any tangible inconsistency in the business model.  All it takes is one bad apple to drive away tons of potential repeat customers just from their bad attitude towards either the customers or the products and services offered by the business. 

Modern business requires at least a cursory understanding of consumer psychology in order to properly educate employees on how to act around different types of personalities.  For example, if the greeter at a store is too "in your face", they will definitely drive away many shy customers. 

See for Yourself

Watch the sales floor for any extended period of time in a number of different stores and you will see problems that are causing one half of a couple to become irritated.  Among these problems include: no "husband chairs", socially awkward salesfloor staff, etc.  Any of these problems cost so little to fix that you will be left to wonder: why doesn't the business correct these problems?  And then you will notice that there is no easy way to reach management regarding the probelms, and/or management is unresponsive to the problems.  Are you that unreachable management for your own company?  If so, reach out to your customers proactively and see for yourself why they are upset, and what you are willing to do to sure that future customers don't get upset by the same thing.

 

 

 

For a company to survive in this era, it must be exceptional. Customer service is one way of being exceptional, but there are others - such as offering the highest quality product, fastest response, lowest cost, or least hassle.

Is customer service the right focus? Here are a few reasons why a company could decide to reduce customer service:

  • When times are tough and margins are thin, can you afford to keep customers at a loss or would it be better to drop the unprofitable customers?
  • With many companies reducing marketing budgets, advertising has never been cheaper - and therefore costs of new customer acquisition are incredibly low.
  • Customer service can be a stopgap for poor product performance. If your products/services no longer meet the needs of customers, change the product rather than trying to "service" a bad product. 

Many businesses assume that customer service is an essential part of their business. But consider that the following companies have practically no customer service:

  • Amazon.com has online processes that handle orders, returns, and 3rd party merchant transactions. But just try reaching an Amazon.com employee by phone: there isn't even a number to call!
  • Ebay/Paypal provide transaction handling and dispute resolution. But both buyers and sellers can get the short end of the stick when the formulaic approach misdiagnoses the situation. Small businesses that rely on paypal have occasionally been locked out of their accounts and essentially forced out of business. Whereas buyers can occasionally be sold shoddy or black-market products and unable to get refunds. The system works 98% of the time, but is not foolproof. And those who fall through the cracks are out of luck.

The reason such large companies can do away with customer service is that their services/processes are robust enough to handle most situations in an automated (or semi-automated) fashion.

Most companies should not do away with customer service, however it must be considered as one function within the overall business strategy.

I recently encountered a small business that justified their poor customer service by saying that their policy was no different than AT&T's. My response: just because large quasi-monopolies can get away with bad business practices doesn't mean every small business should emulate that practice.

 

At my company, AnythingResearch.com, we approach customer service the following way: first, by tailoring research reports to meet the needs of clients, and secondly by clearly articulating the contents of reports and the deliverables.

 

 

Few companies can get away with poor customer service and still stay in existence.  For the rest of us, customer service may be all that differentiates us from our competitors. Tough economic times demand that business owners build relationships with new customers and capitalize on relationships existing relationships.  The strategies your business employ depend on a number of factors which can help you tailor your approach.  Two key factors are whether you are seeking to expand existing relationships or develop new ones and who those relationships are with. 

Existing or new customers? 

  • Existing customers know who you are and what you do. Follow up on past sales to see whether your customer's needs have changed? Do they need more of your product or service?  Do they need an enhanced product?  Service or maintenance?  Even if the answer to each of these is no, check in and see if they're satisfied with their product.  If so, ask them to keep you in mind for future purchases and share your information with their contacts.  If they're not satisfied with their product, ask them how it could be improved.  Having a genuine interest and dialogue about problems they're having can be a huge boon to your relationship itself. It could also open avenues to trouble-shoot, train or upgrade their equipment. 
  • For new customers, your first hurdle is getting them to take the time to listen to you and listen to your message.  Finding customers through existing customers can ease this hurdle.  Either way you find potential customers, it's important to be aware of their time.  If you ask for 5 minutes to talk to them, don't spend 20 minutes.  Briefly, explain who you are and what your business does before asking about their needs.  This will allow you to tailor your response to their specific needs and avoid wasting your and their time explaining unnecessary services or products.  Ask permission to send them more information or schedule a meeting to discuss their needs in more detail. 

Boomer or X-ers? The Generation Game: When approaching your customers, whether existing or current, it's important you understand their experience and customize your approach to their needs and perspective.  Generation X and younger not only want, but expect businesses to have a presence on the web.  It's not enough to call them or send them literature, they'll want to be able to read your material on line, receive information in e-mail and contact you the same way.  Meanwhile, Baby Boomers are going to be familiar and comfortable with getting information from the internet, though they're not as likely to feel comfortable giving personal information over the net.  The older generation, the Silent generation, may not understand how to access your information if it's exclusively on the web.

When preparing your materials:

  • Have both printed and electronic versions of all materials
  • Let customers know that alternative formats are available
  • Have large print versions available if requested. 
  • The same information should be available in print as is on your website. 
  • All materials should have full contact information. Include the location of your bricks and mortar store, telephone and TTY contact information, as well as your e-mail, web address and social media information. 

For all of your customers, young or old, existing customers or prospects. It's imperative that your staff convey professionalism through the way the greet the customers in person or on the phone, how they dress and the manner in which you keep your establishment.  Etiquette does not cost anything, and can make or break a relationship. Follow up contacts with a letter and some literature, customize to the individual with whom you spoke.   This tough economy means taking the extra step to meet the needs of your customers.  Little steps can go a long way towards keeping the existing customer and creating a new one.

Case Sponsor
icon
Michael Ho
Mon Apr 27 11:02pm
Hi Joshua,

Thought you might want to see your post on the American Express OPEN site:
http://blogs.openforum.com/2009/04/23/putting-the-custom-back-in-customer /

Great work!

Mike
icon
Joshua Howe
Tue Apr 28 4:32pm
Great, thank you.

If an economic slowdown is good for anything, it is good for making people reflect on their priorities.  What seems important when the sun is shining may seem less vital when the storm clouds gather and the rain starts to pour.  When money is short, there is one aspect of life we all turn to more: our relationships with other people.  Whether it is with family, friends, neighbors or the local community, the quality of life is measured by the time spent enjoying the company of others, at least as much as it is measured in dollar bills.  In the cynical world of business, it is easy to forget that making money and making friends can go hand-in-hand.  Small businesses have one tremendous advantage that bigger businesses struggle, and often fail, to simulate.  Small businesses have the opportunity for a genuinely personal relationship with the people who buy their products.  Forget contact centres taking calls in far-off countries, scripts read out from screens and databases to keep a track of the customer's previous purchases.  With a small business, you can know the name of your customer's daughter, what sports team they follow, and how they drink their coffee.  Knowing your customers can be a source of pleasure for you and your staff, as well as a great way to improve business.

In business, the common goal is to make money, so it is tempting to focus on that.  But the best generalization about making money in the long run is that it comes from building great relationships with customers so they keep coming back for more, during good times and bad.  And the best generalization about building great relationships with customers is to avoid trying to fit them into pre-defined and artificial categories, but to satisfy them as individuals.  That is what the big companies all try to do, but all the expensive research and all the clever systems only serve to deliver an extensive and well-designed range of pigeonholes to fit people in.  Even the extraordinary algorithms of a Google can only offer second-rate experience to the genuinely personal touch of dealing with somebody who actually knows you.

Try not to think of learning about your customers as an exercise in customer service.  If you focus too much on profit, then you will come across as a salesman and not as somebody who can be trusted.  A business strategy based on customer service must be based on the value gained by retaining a customer for a lifetime.  If you just want to boost your revenues for the next month, you are better off investing in marketing to bring in new customers.  Customer service is for pleasing and increasing the custom from the people who have already decided to be your customer.  Customer service is about creating the trust that you will deliver on your promises and their expectations.  It takes time to build trust, though it can be destroyed in an instant.  Think of improving customer service as an exercise in getting to know people in your community.  All communities take time to grow and develop.  The community of your business may be customers that live locally, or they may be part of a community in the sense they all need a similar kind of service even though they live in different places.  Either way, find a few extra seconds to extend the relationship beyond taking an order and asking for payment.  Speaking to somebody is the best way to communicate, but even in an email you can add an extra sentence or two to expand and personalize the message.  When I email a customer, I always add an extra line or question talking or asking about something specific to that person.  That line may have nothing to do with business.  If I cannot think of anything to write, then I look up old emails and remind myself about what we talked about before.  Instead of counting pennies on phone calls, starting a conversation by asking about a customer's well being and family can be worth a lot of business in the long run.  Your customer may not be talkative, or they may be busy, and this must be respected.  However, you can try telling them a little bit of extra information, like about how your product is made, or letting them know if their order is unusual.  This may encourage them to open up and engage in a conversation.  If you think of this as a social activity, and not just as business, you and your staff will enjoy it more and it will come more naturally.

Put your business at the heart of your community.  It may be good for business that people use your store as a meeting place.  Encourage your customers to get to know each other, with your business as one of the things they have in common.  This may start with sharing reviews or advice about your products, but it could end with you providing an introduction between two other small businesses who are both customers.  Be open to the idea that your business can play a useful role in helping people exchange information and contacts, just because they are all friendly with you and your staff, and make this an aspect of your superior-grade customer service.  It may be wise to recommend other businesses your customers can go to, when there are products and services they want but you do not offer.  That positions you as a trusted advisor, meaning they will turn to you for advice in future, and more importantly that they will trust you to help them.  There may not be an immediate profit to you, but that is the point - people will stay more loyal to your business because of the fringe benefits of being involved in the community you built around your business.

When thinking of customers, keep in mind who are your best customers, and also who are not such good customers.  It is easy to say that every customer should get great service, but do you really want to go the extra mile for your worst customer, whilst potentially neglecting a better customer as a result?  Give preferential treatment to the customers who really deserve it, but do not waste time and effort on schedules and schemes about who gets what - only big businesses need to do that.  Look up your sales records, look at your payment records, think about who complains the most and who is always happy with your service, no matter what.  In the end, rely on your gut instinct to give preferential treatment to those that really deserve it.  A personal touch need not be costly, but it can make your customers feel appreciated.  Like with a gift, it is the thought that counts.  Maybe you have a long-standing customer who you do not know well, but you want to say thanks for their continued business.  Look up the date of their first order, and drop them a line on the anniversary, or make a point of telling them how long they have been a customer the next time you see them.  If you want to try offering a new range or new line of products, ask your top customers what they think first.  Send them a letter describing the new range and offering them to an exclusive presentation.  Even if they do not want what you offer, they will like being treated as a special customer whose opinion matters more than most, though some will make that extra purchase just because they got the extra attention.  As well as having rewards for the best employee of the month, why not have a thank you for the best customers that month?  So long as the gift is not too serious or financial in nature, and do not violate any ethics rules for business to business transactions, your best customers will feel recognized without expecting to turn it into an ongoing discount.  Examples might be a gift voucher for the coffee shop next door, or a demo product from a new line.   The very best customers are the ones who are motivated by a range of factors and not just price, so make a point of giving rewards that they might like because of who they are, and not just because it saves them money.

Depending on how many people are employed in the business, it makes sense to try to allocate specific representatives to deal with specific customers, so when Mr. Jones telephones, try to put him through to someone who is building a relationship with him and not somebody who takes his order just like he was Mr. Smith, Mr. Johnson or Mr. XYZ.  Make customers feel special by giving them the telephone numbers or email addresses of specific individuals in your business, so they have the confidence that they can get in touch with someone who knows them on a personal level, and understands their priorities.  It is human nature that a message for a specific person will be dealt with promptly, but a message which goes into a general enquiries box will languish there for a long time.  Turn that to your advantage by giving specific employees responsibility for specific customers, irrespective of what the employee's main job is.  Spread around the customer-facing responsibility to as many people in the business as you can.  Maybe there is a guy in the back room who you do not think of as having the best skills for dealing with customers, but if he is asked to do it every now and then, he will improve and will learn to care more about customer service in everything else he does.  There may be specific customers who he knows personally outside of work, or where his knowledge of the product may be especially relevant.  Many businesses have also learned that their older staff, although they may lack experience in dealing with customers, have accumulated life experience that gives them untapped skills for handling the public.  As well as training your staff to deliver good customer service, keep finding time to ask them if they would recommend the business to their friends, and do not punish them for being honest.  You are better off hearing the bad news from them and they may have good suggestions for how customer service should be improved.  You also benefit by getting them to think about what their friends would want and expect from excellent customer service.  This will help them to empathize with customers, encouraging them to get the same pleasure from giving great service as they get when they receive it.

A lot of customer service advice focuses on handling complaints, but making business decisions based on complaints is like wagging the dog by the tail.  It is no good smoothing over a customer's problem, and then finding the next three customers all make the same complaint.  Every now and then, make time for your team to set aside day-to-day work and use it to talk about service.  Identify the top few reasons for complaints, then work out the causes as a team.  Then deal with those root causes.  The problem may be with suppliers, or there may be frictions inside your business.  Dealing with these problems may be painful and expensive, but weigh the cost against trying to keep fundamentally dissatisfied customers coming back by offering lower prices, by giving refunds, or by making promises that things will be better next time.  Most of us, as customers, have been trained to be cynical about promises, because we know how rarely a real change is made.  If a customer had a complaint previously, do not be afraid to tell them what you have done to fix the root cause.  You can tell them the next time they come to the store, by including a short note in the envelope with their invoice, or by sending them an email.  Most of them will be impressed you not only took the problem seriously, but that you responded to them personally.

Customer suggestions are worth listening too, but try to keep in mind that many suggestions are not representative of what most customers really want.  Prominently offer comments cards and feedback forms, but also have other channels for getting customer feedback.  The people who make unprompted suggestions tend to be highly motivated, so it is good to also get feedback from people who may not otherwise bother.  Complaining customers are upset, and will not tend to tell you what you do right.  Some comments will come from people with particular requirements, and these may not represent the rest of your customer base.  As well as sitting back and reacting to suggestions, small businesses again have the advantage, because they can support conversations between the customer and somebody empowered to make decisions for the business.  One approach is to ask customers if they mind being contacted, at another time, to discuss the quality of service they received.  The customer can always politely decline, and some will be glad to spend time talking about what they liked and did not like.  Because they are speaking to someone who can make a decision, they will genuinely feel that they have an influence on their supplier, and are not just speaking to someone paid to fill in forms. 

A great source of advice is to ask an honest friend to walk into your business, especially when you are not around, and try it out.  How long did it take them to get served?  Did they feel like they got good advice?  How did they feel about the experience?  Your friend may pick up on all sorts of things - good and bad - that nobody else noticed or told you about.  I regularly count on friends to tell me about my company's services, especially when something new is being offered or something has changed.  They will spot things I miss, such as whether the logistics surrounding a product were clearly explained.  Another approach is to remember that people sometimes want something different from what they say.  As Tipping Point author Malcolm Gladwell points out in this presentation, even people who want weak milky coffee tend to say they like rich roasted coffee.  To counter this, do not just ask what people want, but observe it as best you can.  Experiment by giving people new choices, and seeing if customers like them.  Because yours is a small business, they will understand if you say you are just trying out new ideas to see if they are popular.  These experiments could be something as simple as offering free lollipops to the kids of customers who come in the store, or as complicated as asking for payment in kind as an alternative to money, when you notice a small business customer who could also be your supplier.  Many experiments will come to nothing, but many customers will admire and appreciate you for having a bit of invention and constantly striving to improve the customer's experience.  Just as importantly, when they see how hard you work to improve customer service, they will feel more relaxed and inclined to make helpful suggestions, because they will have confidence that you will take notice.

The subtle signs that show a customer they are valued are too great in number for you to always remember and always simulate.  You can train your staff to smile whilst talking on the telephone, because your customers can hear the difference, and you can use a computer to keep notes about customer preferences, so you can individualize the way they are handled.  But in the end, remembering to put on a smile or remembering to record a fact about a customer are harder to do if you are not interested in the person and are only interested in their money.  A genuine smile, or a genuine interest in your customer, are ultimately simpler and easier to sustain.  You are in business, and it is easy to have your revenues and costs screaming for attention at the front of your mind.  But you are also a person, and you will take pleasure from good relationships with your community, including the community of your customers.  Great customer relationships are about trust, so learn to trust yourself too.  If you can find time to enjoy talking and getting to know your customers, you will please them, please yourself, and make good business too.

Case Sponsor
icon
Michael Ho
Tue Apr 28 6:24pm
Hi Eric,

Your insight has been posted:
http://blogs.openforum.com/2009/04/28/turn-friends-into-customers-and-c ustomers-into-friends/

Thanks for your patience, and keep up the good work,

Mike

The explosion in social media participation is offering small (and large) businesses an excellent and unprecedented opportunity to engage customers in a personal one-to-one way very effectively and cost efficiently.

Two examples of brilliant uses of social media in business come from the formerly small and now huge show business, Zappos with founder Tony Hsieh [Here is his detailed story] .... and from Wine merchant Gary Vaynerchuk. Vaynerchuk's wine blog and online TV efforts have made him the "go to guy" for wine enthusiasts all over the world who use social media.

In both cases the founders of these companies have used social media - most conspicuously the explosive microblogging application Twitter - to keep in contact with customers, engage their customers, and host events and parties that are often open to anybody who "follows" them, reading their day to day activities and observations, on Twitter.    This "democratic" aspect of the new social media puts customers in direct and sometimes even real time contact with CEOs and company representatives, building a sort of brand and product loyalty conventional advertising campaigns can only dream about.   Almost as importantly social media campaigns are relatively inexpensive or even free depending on how you compensate your employees for engaging your customers online.

As the Zappos empire grew, Hsieh also grew his social media efforts and my understanding is that most if not all of the Zappos employees has a Twitter account.   

In addition to creating a more effective way for management and employees to communicate with each other, Twitter accounts for employees effective create a small army of customer service representatives and allow a business to project itself - to increase it's "reach" - at very low cost.  

Obviously there are pitfalls to this real-time social media game if your employees choose to use their power to badmouth customers or your brand, but there appear to be few examples of this problem compared to many positive examples where blogging, Facebook, or Twitter customer contacts become the de facto "Brand representatives", carrying the company values in a a personal way to a broad audience.

In fact many forward looking companies have relaxed their public relations standards, allowing employees to blog and Twitter even about company information.    In their book "Naked Conversations", bloggers Robert Scoble and Shel Israel suggest that blogging should become a  a key component of any branding effort, and perhaps as importantly they warn that companies who fail to use social media wisely may be unable to counter threats to their products or brands that come from the social media space.   Motrin learned this lesson the hard way recently as a large group of mothers offended by a Motrin advertising campaign banded together in Twitter to create enormous negative buzz for Motrin.

Small business can deploy a fairly robust social media campaign in a single evening and at no cost with the following steps:

Open a Twitter account at Twitter.com  Use your company name, and post a small number of items. 

Start a free blog at WordPress.com or Blogger.com   Generally choose an employee who is enthusiastic and enjoys writing.   Try to post a minimum of weekly - ideally more - about happenings in your niche of business and your perspective on the business.  

Open a Facebook account at Facebook.com  Use your own name but identify yourself as the owner of a business.

These three small steps will start you on the social media journey, but what you make of that journey and how far it can take your business is largely up to you.    Good luck!

Many small businesspeople now face some of their greatest challenges of their lives.   In an environment this hostile to business it's imperative to focus on the needs of your customers - both current and potential - and make sure you are addressing those needs.  

Loyalty and customer satisfaction are key components of most small business strategies and there are few cases where customer loyalty and satisfaction cannot be improved through a concerted program of employee training and ongoing instruction combined with measurements of customer service quality.

How can small business owners effectively execute improvements in customer service to retain and increase business?

In some cases improvements can come from three easy steps.  

1) Clearly identify what you see as several key components of your customer service strategy  (e.g.  "very prompt service", "welcome to store", "offer very detailed descriptions of products", "offer coffee", smile, etc.)

2) Communicate these points to all employees in writing and verbally.  Have the employee sign that they will memorize and follow through on all key customer service points.   Engage them and solicit feedback, but make it clear you expect all employees to strive for perfection in each of the points above.

3) Measure improvements and start the cycle again, making sure employees get feedback both for good and bad performance.

How should any changes be measured to determine if they work?

This depends somewhat on the business but for retail, restaurants, hotels, etc consider having friends and relatives be your "secret shoppers", armed with your list of points above and scoring employees on each as they engage in a sales or interaction event at your store.  There's no substitute for real interaction with employees and this is also a great way to enlist friends and relatives for their own insights as you search for the holy grails of customer service in your business.

When does a small business owner know when customer service is good enough?

Customer service is *never* perfect, so both you and your employees should always focus on "improving to perfection" rather than meeting a standard, no matter how high.  In employee evaluations you'll need to define "satisfactory performance" for the purposes of firing or reprimand but that should still be based on how well employees met the customer service expectations you defined above.  

What can managers do to encourage and inspire great customer service from employees?

In addition to clear written and verbal communication, managers should show employees the same respect and courtesies they expect employees to show the customers.  Respect reflects.

Modelling great behavior and style is a simple and effective way for you and your management team to teach employees high service standards and earn their respect for a consistent and quality driven approach to sales.    Managers should demonstrate your key company values both in their interactions with employees and with customers.

In the early 90s, customer service professionals had a name for the most dangerous of all the dissastified customers. They morbidly called them "terrorists," because they wouldn't settle for just taking away your business and making you lose a customer. They wanted you to lose them all. They'd complain to everyone they knew -- especially in your industry -- and spread angry screeds across the internet, conceivably reaching thousands and thousands of readers. The angriest "terrorists" would contact regulatory agencies or consumer watchdog groups, channeling to channel their fury into strange bureaucratic revenge. It's a cautionary tale, but with one simple lesson: If you skimp on customer service, it can bite you back in the worst possible way.

And I think I can provide the ultimate example. In 1994, I was shocked when I saw a woman being censored in an AOL chat room -- literally silenced in a debate -- because she'd used a word from AOL's secret list of the forbidden. Soon I'd found an online community of AOL critics. I started an email newsletter about AOL. It grew to 50,000 subscribers around the world, and they started collecting tips about the company's problems -- which I distributed to my list of over 50 technology reporters. (Once I joked to a friend that when I complained into my telephone's mouthpiece -- it came out in a newspaper.) I think I ultimately triggered three separate class action lawsuits.

The biggest story I ever uncovered later made its way into the New York Times, the New York Post, and the New York Daily News -- on the same day. It got picked up by Bloomberg wire services, and MSNBC actually got a reaction about it from somebody in the Clinton administration. When Time magazine finally did a profile of Steve Case, they also devoted a page to...me, AOL's #1 critic.

See what happens if you mess up your customer service?

Fifteen years later, the newsletter is still running -- but you can trace it all back to that one bad customer experience at the hands of an AOL staffer. Over those years, I've distilled that crystalling event into one basic customer service lesson: Don't skimp on customer service

AOL actually patrolled their chat rooms with volunteers -- their biggest fans were empowered to rat out rule-breakers -- but tricky borderline cases were still being assessed by.....volunteers. They were hard to train, hard to manage, and ultimately triggered an investigation by the Department of Labor. (There was some question as to whether it was even legal to run your for-profit business using volunteer staffers.) But one lesson was obvious.

You get what you pay for.

It's hard to quantify a fuzzy metric like "positive feelings" -- but there are ways to measure it. (Some companies monitor the number of complaints each month and then watch whether they're rising or falling.) Crunching these results can pinpoint your biggest weaknesses and your customer's greatest needs. And in the "web 2.0" world, there are easy ways to automate this.

Some companies actually patrol the web for every reference to their products. Google Alerts lets you target specific keywords in news articles -- your company's name, your competitors, news about your specific market spector or even key regulatory agencies. But patrolling the blogs often gives you a better view of the everyman. In the San Francisco Bay Area, there's a "hate" web site devoted to criticizing the local rapid transit program. And it's understood that the program's employees read the site. It may be curiosity, or even vanity, but ultimately it's an invaluable resource.

Of course, the ultimate proof of good customer service is a positive story shared on the web -- without any prompting from the company. Sharing these stories with your team can help boost their enthusiasm, while also giving you a chance to underscore key lessons about how customers should be handled. In theory, those are the two outcomes from web research -- good stories and the bad stories. But in the web 2.0 world, things always morph into unexpected directions.

Some customers don't simply post their complaints -- they'll launch entire campaigns highlighting their grievances. Bloggers cheered on the artist who created a parody of the woman in the Starbucks logo -- and then proudly defended his right to the parody in a New York courtroom. In fact, bashing Starbucks has become almost an art form. ("What happens when you refuse to say 'venti' instead of 'large'? Find out in the Starbucks Complaint contest...") But in the ultimate irony, that web site fairly awarded an appropriate prize to the winning entrant -- a $500 gift certificate....to Starbucks.

And sometimes articles criticizing a company will appear above the company itself in Google's search results -- or next to a headline that's even more embarassing. Try Googling "Cash 4 Gold". The first result is the company itself, and the second result is a blog post headlined "Cash4Gold Will Offer One-Third of the Actual Value for your Gold." It's a "weird news" blogger in Sacramento who did a simple experiment with the company, and then publicized his results. The web 2.0 generation is cynical and savvy. (The blogger has a $0 advertising budget -- whereas Cash4Gold actually bought a SuperBowl ad.) And they've apparently reversed that truism about the rules in Vegas: now the house never wins.

The internet is a giant megaphone, and disgruntled customers can broadcast their complaints to the world. Last summer a big event went horribly wrong, when an art museum tried to publicize their Frida Kahlo exhibit. A guy walked into their exhibit with a digital camera, and the museum's "visitor relations" director threw him out. But the guy with the camera has a very popular blog, and soon his complaints were on the front page of all the biggest sites -- including Digg and BoingBoing. Soon an angry mob was investigating the "visitor relations" director -- posting his pictures, rooting through his Facebook page, tracking down his work phone number, and even investigating his past history.

It's been said that "Customer service is the new PR." That's the trendy way of saying that positive experiences can substitute for advertising if you're consistent and effective. But the easiest way to understand customer service that's working is those glaring examples of when it's not.

Follow Techdirt
What is the Insight Community?

From time to time, we post cases like this from the Insight Community right here on Techdirt.

In these cases, companies are looking to directly engage YOU, the insightful readers of Techdirt, in meaningful conversations.

So, please take some time and look through this case and contribute your insights.

To sign up to contribute, go here.

A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This