Why Customer Service Matters
Imagine that a customer wants to return a dress to your store that she wore and ripped. You’re reluctant to take back such an expensive piece. But your supervisor tells you her loyalty is worth much more. You do it anyway. That clerk was Stanley Marcus, of Nieman Marcus. And he said that woman would later spend $500,000 in the store. He recognized that Neiman Marcus never had a good sale unless it’s a good buy for the customer. He built an empire based on devotion to customer service.
Why focus on customer service?
We are all in customer service. Delivering incredible experiences to customers inside and outside our organizations is an essential element of a good business. Companies that focus on customer service grow revenues by four to eight percent above competitors. Customers will pay 17% more for business with companies with an excellent reputation. Once a customer has a positive experience, 52% of them will make an additional purchase. The real value is the client base that can give you their loyalty.
Keeping customers is cheaper than getting new ones.
It costs about five times more to get a new customer than it costs to keep one. So don’t risk losing a customer when it’s costly to locate a new one in the first place. You have up to a 70% chance of selling to an existing customer, but you may have as low as a five percent chance of selling to a new customer. Every individual customer is irreplaceable. Once they’re gone, they leave a hole in your company’s future. Lousy customer service can increase overall problems associated with your sales, business and increases the potential for legal issues. By treating your customers poorly, you can be sure that you’ll run into problems at one point or another. Returning customers create the word-of-mouth advertising that money cannot buy. And angry customers have more impact due to the importance of online reviews.
Good customer service improves employee turnover
Good customer service is like a magnet. People are attracted to positive company culture. The company’s values are illustrated in how it treats employees and customers. Every business must make money, but the exceptional ones care about more than profits. They transcend money by creating a following. Treating customers well begins with treating employees well. And it will also make business partners want to do more business with you because they are sure that you will treat their referral right. After all, you’re not just in business to make a profit. Instead, your business should provide a service that is so good that people will pay you a profit because of what you do for them.
What does a customer service culture look like?
• Remembers people. People want to go where everyone knows their name. Every customer deserves to be welcomed, acknowledged, and appreciated. Tell repeat customers that you missed them, that you know what she needs based on the last time you interacted, and that the customer’s return fills a gap that you felt in her absence.
• Anticipates needs. Serve the unexpressed needs and wishes of your customers. This one of the main pillars of the Ritz-Carlton “gold standards” of customer service. This is when workers accommodate the needs of a customer without expressing them. Going beyond serving what has been asked to do what the customer is truly looking for is one of the quickest and most effective ways to convince a customer that your company is their company.
• Reassures. A customer needs an advocate. In some industries, it’s the idea that you would stand in front of a truck for your client. In others, it’s the understanding that customers know that they can return a product for a refund if it doesn’t work out.
How do you build a customer service culture?
Cast a vision for your employees. Teach them the employee’s mission-driven purpose in your organization. This must be about more than money. It must be a higher virtue.
Empower your employees to solve problems for customers. It is crucial to empower your employees to creatively assist customers so that there is no service delay. A good job done late is defective.
Show gratitude to your employees. Whether it is a thank-you note or public praise, you must make it a habit to recognize them when they show exceptional customer service. What gets rewarded gets repeated.
Create a language phrasebook for your company. For example, instead of saying “You owe . . .” say “Our records show a balance of . . .” Don’t say, “You need to . . .” (This makes some customers think: “I don’t need to do anything, buddy — I’m your customer!”) Instead, say “We find it usually works best when . . .’’Don’t say, “Please hold.” Instead say, “May I briefly place you on hold?” (and then listen to their answer). Don’t respond with, “no problem.” (it implies that you would not have helped if it was a problem, or that the task was so easy it wasn’t worthy of a thank you.) Instead, simply say “You’re welcome or “Thank YOU.”
Create a plan for “wow” moments. These are the extraordinary, unexpected instances of customer service. To deliver these moments, you must have a plan. At Zappos, they tally the cookies, flowers, postcards, and other gifts to customers from the previous month and year.
Create a plan for saying yes. The best service says yes, rather than looking for ways to say “that’s not in my job description.” Train your employees not to say “we’re closed” or “not my department.”
Create a plan for hellos and goodbyes. Develop a habit of applying your best customer service skills at the beginning and the end of an encounter with a customer. In every interaction with a customer, make sure that you have the last word. Assume you’re on the phone with a client. You’ve agreed to look something up for them. They’ll likely answer, “thank you.” Instead of greeting them directly to dead air or hold music, respond with “you’re welcome” (not, by the way, “uh-huh” or “no problem”; more on this here).
Customers want results, not sympathy. That’s why your business must have a plan that empowers employees to get results for your customers. You must create a plan for your employees and customers to win.
As originally posted on the Hammer Blog at https://www.hamiltonlindley.org/why-customer-service-is-important/Hamilton%20Lindley