It only takes a moment to win (or lose) customers
By Charles Sujansky
The customer at the other end of the manager's phone line was irate. Very irate. "I just can’t believe the way your employee spoke with me over the phone," she said in an agitated voice. The manager of the branch, Janis Keller, knew she had to stay calm if she was going to resolve the problem. Taking a deep breath, Keller replied evenly, "I'm really sorry we upset you, Mrs. Verdi. Please tell me what happened so I can help fix the problem." As the angry customer's story unfolded Keller became more and more frustrated.
The customer had received a phone call that morning from the company's accounts receivable office claiming that the woman's payment was past due and demanding an immediate payment. In fact, the customer had made the required payment on the precise date it was due. Once the employee re-checked her records she discovered that the customer's payment had been erroneously posted to the wrong account. It was a simple mistake and easy enough to rectify.
But instead of correcting the mistake and apologizing for the confusion, the employee told the woman she should have written the correct account number in her check’s memo line. The customer was left fuming and finally contacted Janis Keller to lodge her complaint.
After promising to look into it, Keller hung up and let out a long sigh. She'd joined the company over 25 years previously as a CSR and had worked her way up to branch manager. She knew the customer, a very sweet older lady named Mrs. Verdi, quite well. She also knew how hard the company had worked over the years to get and keep customers like that. Now, with the industry more competitive than ever, it was getting hard to attract and keep new customers. Keller knew that the company could ill afford to lose steady customers
In today's competitive business climate, retaining customers is more critical than ever. Those organizations with a reputation for excellent customer service are the ones that tend to thrive in bad times. By the same token, those companies saddled with poor customer service are more likely to struggle or go under when the going gets rough.
It doesn't take a genius to recognize that customer service is, for most businesses, the key to maintaining a competitive edge. However, customer relationships can be extremely tentative. It may take years for an organization to build a positive, productive and profitable relationships with customers, only to have one of those relationships destroyed in a mere moment. While it may not be impossible to win back an offended customer after a bad encounter, the chances are that customer could be lost forever!
But customer service isn't just a relationship issue, it's also a bottom line issue! Recent research shows that organizations with superior customer service tend to out-perform their competitors by up to 26% in gross margin and 85% in sales growth. In other words, the customers of top organizations buy more items, spend more money, return for new business more often, and stick around longer. Simply increasing an organization's customer retention by a mere 5% typically results in a profit swing of between 25 to 100%! 1
But, as we all know, outstanding customer service is about much more than numbers. An organization's customer service mission is also the bond that brings together workers and management. When we talk about an organization's "brand" we are often talking about how delivering an outstanding customer experience comes to characterize the company's culture. Legendary customer service examples such as IBM, Ritz-Carlton, Apple, Nordstrom, Federal Express, and Zappos not only inspire their customers, they also inspire their employees! When customer-facing employees understand and are committed to their mission they deliver outstanding customer experiences. As author Peter Drucker wrote, "The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer." 2
But what exactly is an "outstanding customer experience?" Experience is simply an interaction between an organization and a customer. And every point at which a customer comes into contact with your organization is an opportunity for a "customer experience," whether that experience is good or bad. Each phone call, letter, e-mail, Internet visit, or face-to-face interaction is a chance to either win or lose a customer.
When we say "it only takes a moment for a customer to be won or lost," we're really talking about three different types of moments. At it's best that interaction could be a "moment of magic," when that customer's expectations have been met – or exceeded – with pride, efficiency, and warmth. But all too often a customer's needs are instead met with a "moment of mediocrity," in the form of indifference, ignorance or carelessness. Even worse, that customer interaction could also prove to be a "moment of misery."
We've all heard nightmare stories about people trapped in "customer service hell" or frustrated callers being placed on "ignore." These moments of misery are dangerous to your organization's existing customer base. They also potentially threaten future business when these stories are retold with relish at backyard barbecues, or go "viral" after being posted to the Internet by angry customers.
Clearly many organizations have a vested interest in improving customer service. But it's not like customer service managers can wave a magic wand and go from "worst to first" overnight. Achieving the highest levels of customer service can be a daunting challenge. So what can you do to make sure your customers always have a moment of magic?
First, be sure to hire employees who have a natural propensity for customer service. Obviously indifferent workers or poor communicators would seem to make bad choices to fill a customer service position. But there is more to analyzing a prospective employee's customer service skill set than relying on their word for or it or trusting your gut feelings.
One of the most effective means of pinpointing your employee’s customer service orientation is through assessment tools. Well-designed and validate instruments can paint a very clear picture of the skills and values each candidate brings to the job. Only by looking at the each person’s strengths and weaknesses can you make sure your customers will be dealing with a dedicated, customer-driven staff.
The Customer Service Profile assessment is a powerful tool that measures six behavioral characteristics that are crucial to quality customer service: trust, tact, empathy, conformity, focus, and flexibility. A careful assessment of these factors can help you select the best customer service candidates from your available pool. In addition, the assessment compares the candidates' customer service perspective with that of managements' perspective.
Second, make sure your workforce is fully engaged. This too can be determined through a well-designed and validated assessment too. Research has shown that engaged employees are competent, motivated and loyal to the company mission. In the average company 19% of workers (fewer than 1 in 5) are considered loyal employees who can be counted on to win customers over day in and day out with a spirit and enthusiasm. Loyal employees engage in dramatically different behavior from ordinary workers and produce dramatically different customer results, such as superior retention of customers and fewer complaints.
Engaged employees may even help avoid the erosion of profit margins. In an age when customers drop products switch brand loyalty at the drop of a hat, many customers will gladly stick with a brand that offers superior customer service, even you the product is somewhat more expensive that competing products.
In addition, engaged employees maintain longer, closer relationships with customers, which also drives more referrals and lowers customer acquisition costs.
In the case of Janis Keller and her clearly disengaged employee, the problem was more immediate. After speaking with the employee's immediate superior, Keller called the angry customer back to apologize once again. Keller had the employee take the assessment and her skill set was suited to a different position in the company so she was transitioned there. The company also launched a program to reinforce the organization's mission and customer service standards.
The old expression goes "live by the sword, die by the sword." In the modern context of our competitive corporate climate we might modify that expression to read "live by customer service, die by customer service." For those organizations that ignore customer service or remain ignorant of their image among customers, the price of poor service may be too high to endure. It only takes a moment to win or lose a customer, so make sure that your employees are dedicated to creating moments of "magic" for your customers, and not moments of mediocrity or, even worse, moments of misery.
2 Peter Drucker on the Profession of Management by Peter F. Drucker, published by Harvard Business School Press, July 2003.
Chuck Sujanksy is the CEO of KEYGroup, an international training and consulting company. KEYGroup consultants partner with business leaders to find unique solutions to unique people problems while providing a return on investment through assessments, executive coaching, leadership development, and training. For more information on how KEYGroup can help your organization contact Kelly Hanna at Khanna@keygroupconsulting.com.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
