Are You Crazy About Your Customers?
What Business Are You In?
In today’s competitive marketplace, to be truly successful, you need to understand the importance of determining exactly what type of business you are in. Many organizations tend to over-generalize in this area without truly understanding the nature of their business.
For example, instead of saying that you “do electrical work,” you could say that you help homeowners hook up the hot tub of their dreams, bring life to their new kitchen, or energize a large industrial plant that will provide goods to thousands of consumers.
There are seven important questions you must answer in order to identify and capitalize upon your unique position in the market and to develop the kind of customer loyalty that will allow your business to remain successful:
- What products and services do you provide?
- Who are your customers?
- What are their expectations?
- Who are your suppliers and partners?
- Who are your competitors?
- What are the key issues that drive your business?
- How do you measure your performance and effectiveness?
The Long-Term Value of a Customer
One of the most serious and costly mistakes companies make is to fail to recognize the long-term value of a customer.
Many organizations, when faced with a difficult customer situation may decide to “just let this one go,” allowing a customer to leave rather than make an exception to a rigid policy in order to accommodate a unique situation.
But this kind of shortsighted approach can have long-term implications on the sustained viability of the company. For example, a single bad experience with an airline, compounded by their unwillingness to correct the situation, could very easily convince a customer to avoid travel with that airline as much as possible in the future.
To illustrate this, we can look at my own travel experiences. Based on the following very conservative assumptions, you’ll see what an airline stands to lose if I take my business to a competitor:
My average ticket costs $500 I fly twice a month
I work ten months out of the year I will travel at this level for 20 years
This makes my lifetime value to the airline $500 x 2 x 10 x 20 = $200,000! And, as I said, this is a very conservative estimate. Over a twenty-year period, I will almost certainly spend at least twice that amount, and probably more.
The point is that when you are determining the value of a customer, you must look not only at the value of the current transaction, but also at the long-term cumulative value of that relationship.
The Impact of Poor Service
The impact of bad service can be more far reaching than that. For example, think back to the last time you experienced bad service. Did you tell a friend, a family member, a coworker, or possibly even a complete stranger about it? A variety of studies have been conducted that show that from 9 out of 30 people will relate to others their negative service experience. What’s interesting is that this number is far greater than when a person has had a positive service experience.
As a result, a company that decides not to resolve a service problem quickly will certainly experience a financial loss beyond the original customer. Word of mouth is a powerful source of advertising, but it is an even more powerful source of warning signs for potential customers.
People tend to make decisions based on gut feelings. Anything that makes a customer feel uncomfortable will quickly change a potential customer’s positive feelings to negative ones. This can cost your company its reputation, reduce its revenue, and potentially cause irreparable damage.
So what can you do to help ensure that your customer service teams function effectively? There are five major areas you can address to make this happen.
1. CREATING THE ENVIRONMENT
The first step is to create an environment that supports and encourages a team approach to customer service.
There are some specific areas you can address to help establish a team-oriented environment.
- Use your company’s vision to provide focus. A clear vision of the organization’s purpose is essential if people are to work together and present a common face to the customer.
- Recognize areas in the organization that need balance. There are an almost infinite number of areas that require balance between improvement and application, between risk and reward, and between “full steam ahead” and taking time out for rejuvenation.
- Try to make routine work seem different and exciting. In designing roles and responsibilities, try to think long term and find ways to make the work both interesting and varied.
- Maintain a level of mystery and excitement. Try to keep things fresh in the workplace to maintain a high level of energy. Do something unexpected— have a contest, bring in lunch, or even let everyone have the afternoon off.
2. BUILDING TEAMS
The work is not over just because you have created a team-friendly environment. The real effort begins when you have to identify, build, and develop teams. Fortunately, there are some definite steps you can take to accomplish this successfully.
- Recognize that an organization is a collection of individuals. Be sure to consider how each individual’s personality will affect his or her performance in the role.
- Find out what individuals love to do and channel their work in those directions. People all have aptitudes in different areas and have a variety of interests. Try to determine where their interests are and, where possible, tailor their job to take advantage of these interests.
- Consider the ability to demonstrate passion as a hiring criteria. During an interview, ask applicants to describe a hobby or other interest they have outside of work. If they don’t get excited about their avocation, they are not likely to be even the least bit excited at their workplace.
- Cross train and vary the load. To help keep work fresh, try to give employees the opportunity to discover other roles and spend time working in them.
3. DEVELOPING CONSISTENCY AND EXCELLENCE
Delivering a high level of service and delivering it consistently is one sure way to enhance your level of customer satisfaction and retention. There are several important areas to consider when defining customer-contact roles:
- Create a memorable first impression. A great deal of research has been conducted that suggests that people remember beginnings and endings of interactions. With this in mind, it is critical to create a strong first impression.
- Make sure, “I help in all departments,” means that staff in your organization can actually help in all areas of the business.
- Be certain that your employees are truly empowered. If employees are worried about possible retribution from making a wrong decision, then they are really not empowered at all.
- Transform failure into a learning opportunity. In business, as in life, failure is always a better teacher than success. Rather than sweep your organization’s failures under the rug, hold them up high and learn from them!
4. SHARING THE KNOWLEDGE
The combined experience of your team can provide a wealth of knowledge that is often much greater than can be gained from formal classroom training. It’s important to develop methods that enable the group to access and utilize this knowledge.
- Encourage individual learning. Be sure that each person is well trained so that the group can benefit from each person’s contributions.
- Facilitate best practice exchanges within your own organization. In addition to external training, regular exchanges of information among team members can help bring about meaningful change.
- Find the right questions before you seek the answers. Organizations spend an incredible amount of time trying to answer questions that have absolutely no bearing on the issues they are facing. If you don’t ask the right questions, the answers are meaningless.
- Create a personal board of directors. No individual in any organization can possibly know all there is to know about that organization. A “personal board of directors,” made up of people with complementary knowledge, skills, and abilities, can help you fill in the blanks when you don’t have the information yourself.
5. MOTIVATING AND RECOGNIZING TEAMS
Once your teams are in place and functioning well, you still need to keep them motivated and continue to reward and recognize great performance. Here are some guidelines to help you in this area:
- Promote team effort. Remember it’s important to accomplish your individual work responsibilities, but they must also coincide with the goals of the team.
- Reward and recognize teams. If you say that teamwork is important, then make sure your reward and recognition programs also focus on teams.
- Give your work a “cold shower” by setting deadlines for the group. Setting “stretch” objectives and difficult goals can motivate a team to exceed even its own expectations.
- Be excited about your job—or do something else. If your employees are not excited—even a little bit—about their jobs, no amount of reward or recognition will motivate them to deliver anything more then the minimum effort required to fulfill their roles.
You can have the best product and the most effective marketing in your industry, but if your employees are unable to work effectively in teams, your organization will never reach its potential. By applying some of the ideas we have discussed here, you will be able to see tangible improvements in your company’s level of customer service and realize the benefits of improved customer satisfaction and loyalty.
Ron Rosenberg is an award-winning speaker, author, and coach. He is a nationally recognized expert on marketing and customer service, has authored several books and learning systems, and leads high-level marketing and business development coaching programs. Over 20,000 people have subscribed to his Tricks & Tales email newsletter. His expert commentary has been featured in The New York Times and The Washington Post, and in Smart Money and Real Simple magazines. He has been a guest on nationally syndicated radio shows, including ABC Radio, Dateline Washington, and The Gary Nolan Show.