Customer Service is about maximizing customer retention and conversion over the long term. You will be unable to retain existing customers and win new customers unless you deliver superior perceived market quality.
Superior perceived market quality can only be delivered over the long term, if you consistently deliver customer service that really counts.
So, how can companies improve customer retention, loyalty and profitability and sustain it, through Customer Service?
1. Break down the service barriers — the leadership challenge
It is not uncommon for top management to go on a weekend strategic retreat and decide that "from Monday we will be a customer focused company". Customer focus is not a fad, something that you can switch on or off at the touch of a button. It goes to the very essence or core of the company. It is part of the culture, the company's being.
An external customer orientation is acquired over time. It is reflected in the attitude and behavior of the company's leadership, and their commitment to service excellence. In many of the companies that I have worked with and consulted to, the culture dictates that you "play by the rules". The exercise of initiative is discouraged. Yet, management expects staff to do extraordinary things for its customers. It is the leadership that sets the example that the rest of the company will ultimately emulate.
2. It is imperative that you understand how your customers' make decisions.
Understanding the dynamics that motivate purchase is fundamental to achieving customer service that really counts.
Before a customer buys from you, you can generally expect that the customer has already shopped around and is well informed, through advertising, word of mouth etc. Each customer's perceptions are also shaped by the product market strategies of your competitors, as well as other environmental factors such as legislation, interest rates etc.
An in-depth understanding of these dynamics is therefore fundamental to designing and delivering customer service that really counts.
3. Identify product and service attributes that are valued by your customers'.
A customer's decision making processes may well result in hundreds of factors which influence his/her buying behavior. Not all factors are important to all customers. In fact, some customers may value particular aspects of the service delivery experience that other customers' feel may be relatively unimportant. It is therefore vital to establish which factors are valued by customers and how these factors are ranked in order of importance for each market segment. A market segment is a group of customers that display homogeniety relative to other groups. Markets can be segmented in relation to customer needs, products, geography, industries etc.
4. Recognise that customer service provides many opportunities to win or lose customers.
Every interaction with a customer represents a 'moment of truth'and an opportunity to create value - real or perceived. Whatever the customer thinks and believes is their reality.
By understanding this "value chain" and linking your people and processes so that they add value that the customer recognizes, you will align your company's products and services with its market(s).
5. Know how you are doing relative to your competitors.
You cannot measure your performance in a vacuum. Companies who record improved customer satisfaction scores yet continue to lose market position, are either measuring irrelevant factors, or competitors' customer satisfaction scores are improving at a faster rate. The importance of measuring the competitive context cannot be over-emphasized as this sets the benchmark, against which performance can be measured relative to the market.
6. Set service standards that create "stretch".
If you want to improve your game of tennis quickly, you need to play against stronger athletes. The same principle applies to customer service. Set standards against the "best in class" for each activity.
7. Under-promise and over-deliver.
Providing unexpected service or surprising customers' with service that they had not expected, is the best way to create loyal customers - to 'delight customers'.
My mother-in-law was once mugged in a supermarket whilst doing her monthly grocery shopping. Seeing her distress, store employees reacted quickly and led her quiretly to a back office where they gave her sugar water; sealing off all exit points; assisting her to deal with the risk of financial loss by cancelling her credit cards and, as a goodwill gesture, they gave her the grocercies for free. She has never forgotten this service and speaks about the supermarket chain at every opportunity. Companies cannot pay for this sort of free advertising.
8. Outstanding Customer Service includes the unexpected.
Staff need to be empowered to capitalize on service opportunities as they present themselves.
A little old lady once called her bank just before closing time and asked the clerk how long it would take for her to make her way across town. After establishing that she did not know how to use an electronic teller machine (ATM), the clerk enquired as to the amount she wanted to cash. "One hundred dollars" the old lady replied. The clerk, on his own initiative suggested that he would stop by on his way home and deliver the cash personally. The little old lady was so impressed that she transferred her whole account of millions of dollars from another leading bank to this small bank, all because of unexpected customer service. This incident created an opportunity for a relatively junior member of staff to create a customer for life.
9. Monitor changing expectations.
The only constant in our environment is change. In an effort to remain relevant to your target market, you must periodically monitor how customer needs and expectations are changing.
This will guide and inform new product development and assist to continuously renew and transform your company to meet new customer service challenges.
10. Communicate, communicate, communicate.
Communicate your service expectations to both customers and staff. One of the biggest pitfalls is prematurely releasing a marketing campaign that promotes customer service messages prior to properly briefing and training frontline staff.
Most companies are really good at formulating customer service strategies, but implement them poorly. Effective communications is generally at the heart of the problem.
To deliver superior Customer Service on a sustained basis, companies need to adopt a strategic and holistic approach that is embedded in its culture, systems and processes and which aligns the company with each of its served markets (segments).
Only by practicing all ten steps simultaneously, can you create an environment in which staff attitudes and behaviour will reflect a true customer orientation, that results in customers perceiving service quality that is superior to your competitors.
This philosophy will translate into loyal customers, whose favourable word of mouth will increase the momentum for greater customer conversion and retention.
Maximizing customer retention and conversion will deliver improved profitability that can readily be sustained.
Copyright (c) 2010 Ivan Nurick