Customer Service

Introduction

Whenever I talk with people about customer service two quotes stand out:

“The customer is always right.”  Stew Leonard

“You can’t just ask customers what they want and then try to give that to them.  By the time you get it built, they’ll want something new.”  Steve Jobs

So do we just answer the customer in response to their issues, or do we give them what they really need?  Or both?

My answer is both.

On one hand if you don’t answer customer issues you will frequently fail to make a sale much less repeat sales.  However, if you don’t solve their real needs you will fail even more, because not only will you not make the sale, but you will have lost a referral source to recommend you to others.

My bias is to place a great deal of emphasis upon customer service as a key component from the very start of your relationship with a customer.  Think of the best buying experiences you have ever had and they will probably involve acquiring information about the product or service and purchasing it with special assistance in the process.  That can include “Do you want fries with that?” at McDonald’s, seeing extra pairs of shoes at Nordstrom’s, getting a follow up phone call after a major purchase, or simply a polite quick experience with a quality product and a sincere “Thank you!” with direct eye contact.

Components of customer service primarily involves three integrated efforts:

• Company Philosophy
• Company Processes
• Company Execution

Company Philosophy

On one hand, company philosophy is easy to describe.  Do you really care about your customer? 

Are you excited when a customer has a great experience and are you frustrated when something goes wrong regardless of the cause?  In my experience as a consultant my biggest concerns are when clients come to me after they have previously invested thousands of dollars with others who did not advise them about the simple fundamentals.  These clients are often very frustrated because their solutions are even more complex than when they began, and the later they come to me the worse the situation, as in fields such as health care and education.  Of course, for entrepreneurs just starting out, if the correct foundation isn’t laid for great customer service at the outset, the entire business will suffer for years to come.

On the other hand, there is a more detailed definition of company philosophy beyond caring for the customer.  This involves a customer service focused philosophy based on planning, commitment and compromise .For example, many companies automate their customer service to increase security, reduce costs, reduce errors and expedite the process.  Most-if-not-all of us have had the experience of automated phone or internet menus where we spend what seems like days just trying to reach the right resource to solve our problem.  These practices can be annoying and alienating to customers if the automation does not solve their problems very rapidly, especially if access to live human beings is not available.  Even when live humans are part of the “customer service” equation, the process can be complicated and inefficient.  Often, companies simply do not realize that when their automated menu says ”push 1 for English” and someone answers who barely speaks English, this is not a good situation.

A third aspect of company philosophy has to do with how you handle errors when they happen, and you — the company — are legitimately at fault.  Mistakes do happen, no matter how well-established and well-managed the company.  Your company philosophy needs to reflect how such mistakes are handled, and fortunately there is a simple solution to this dilemma:  Empower your staff and management.

Focus on solving problems and satisfying customers when you — the company — have made the mistake, and even if the customer is at fault (remember the words of Stew Leonard).  It is human nature to simply over-estimate the number of unjustified complaints and under-estimate the number of good customers who never return because of a bad experience.  My wife will never visit the best and closest bakery in our neighborhood because over 30 years ago they refused to make a birthday cake for my daughter with three days’ notice.  They said they were too busy for the holidays.  In contrast, she will never forget the food catering store that cooked our turkey on Thanksgiving when our oven broke.

The right philosophy and empowerment also require that you trust your employees and staff.  This requires hiring and training good people, giving them the authority they need to do their jobs well, and understanding that they will make mistakes at times — mistakes that need correction and not just reprimand.  Finally, a company philosophy that involves empowerment invokes listening to staff and customers to continue improving individual performance and overall operation.

Company Processes

A second critical element of customer service involves Company Processes.  It goes without saying that to provide excellent customer service you need to establish clear processes.  This includes procedures, manuals, standards, presentation etc. Remember, satisfied customers, repeat customers, positive social media, and referrals are the best and least expensive marketing you have.  There is absolutely no substitute for a satisfied customer.

In contrast, dissatisfied customers, poor service and negative referrals (i.e., on Yelp!) can offset the best marketing efforts.  For example, many organizations measure success by new customer acquisition.  Rather they should also measure repeat customers, recommendations and the ultimate marketing goal:  Going Viral which is not just on You Tube, but these days is on a multitude of formal social platforms, large and small, local and global.

Aligning your company’s processes involves knowing the relationship between your product and your customer at a number of different levels, ranging from first impressions to repeat purchases and service after-the-sale.  Knowledge is an important ingredient in completing a successful sale and the customer appreciates that you, your staff and your communications are thoroughly familiar with your company’s offerings.  This is where the “trust” is built that is so essential to repeat sales and referrals.

A frequent pitfall encountered by many startups is that a potentially successful business will lose its way and stumble or fail because it tries to “expand” into new products or markets too rapidly, only to discover that what made them successful in the first place slipped away in the process.  When we lose focus as managers, we run the very real risk of losing customers, business and our bottom line.  Once you have stopped providing customer service in favor of branching into new areas prematurely creates an environment for failure.  Research over the years has shown that helping a customer resolve his or her issue results in continued business and likely makes a customer for life.  Repeat business and word-of-mouth or internet referrals are the very lifeblood of your bottom line.

Commit to quality service

Go above and beyond your customers’ expectations.  Your product knowledge will engender confidence and trust and enable you to anticipate a customer’s questions, focus on his or her needs, and guide you both to an appropriate solution.  It’s almost impossible to ask too many questions of your customers.  Once you know what they want, you will be able to deliver the right product at the right time.  In simplest terms:  Listen to your customers and go that extra mile.  Listening to customers also often enables you to make suggestions about your services and products the customer hasn’t thought about and they will appreciate your knowledge and your expertise to help them resolve their needs.

Quality service includes checking everything before the product is shipped or the customer leaves.  Not only does it demonstrate that you care about your customer, but it often will save grief down the road when service or corrections to an order are required.

Executing Customer Service

Philosophy and processes are the not the only elements of effective customer service.  There are technical issues that need to be resolved and executed, without which no company can succeed in offering outstanding customer service.

As examples of areas where clear and professional execution are required, ask yourself how well prepared your company is to deal with the following:

• What are your satisfaction and guarantee policies?
• Is the customer always right and if so how do you handle disputes?
• How much do value good customers, and how is this value demonstrated?
• Who are you competing with and what systems do you have for positioning and responding to competition?
• How much can you afford to invest in customer service, and how much abuse will you encounter from disgruntled or dis-satisfied customers?

My own thoughts on these and related execution issues:

• If you offer quality products, services and prices, the frequency of improper returns will be small.  If this is the case, what will be the consequences if a few consumers buy a TV for the super bowl and return it on Monday?  In short avoiding problems with great products and services is the most productive strategy to execute great customer service.
• Dissatisfied customers can be both painful and expensive.  Satisfied customers have immeasurable value.  Think of good and bad restaurant experiences.  If the restaurant goes the extra mile to address a complaint, you usually remember the extra and forget the complaint.  In contrast if they tell you it is a 10 minute wait and it is 30 you may not ever return.

From an execution standpoint, customer service efforts involve several integrated features:

• Order entry and other communication requirements
• Shipping
• Technical communication with customers
• Human interface
• Reports for management of the business and quality control

Being involved, measuring and improving practices and understanding the total impact of practices can dramatically improve your company’s customer service.  There are also a variety of new tools to improve customer service.  Remember to assume your competition is as aware of these tools as you are:

• The customer service commitment needs to be supported by appropriate communication techniques including live, email and phone and automated phone support
• Response time is becoming a key measure affecting sales, profitability and excellence.  Shipping time, number of available phone lines, answering the phone or emails promptly can all be critical
• UPS and Fed Ex have set the bar for inquires on problems.  Customers expect to know at a keystroke when, what, and where their purchases will be available and arrive
• In order to continue to improve customer service, you should welcome comments and suggestions on your product and service.  These can range from formal surveys to E-mails to simple “how are we doing?”

Order entry, shipping and communication are becoming increasingly user-friendly and automated.  Automating as much of the process as possible provides greater efficiency, lower cost, faster response, better customer service and fewer errors for all parties.

Some considerations:

• Use a generic a packing slip or receipt that will list your logo, consumer and product information
• Manage inventory levels or stock outs to maximize sales, reduce inventory and service
• Develop shipping goals, service goals, inventory goals and reporter points
• Hire and empower adequate levels of trained staff to both handle inquires and promptly process information.  Receptionists or greeters can be the most important person in the organization.

As the saying goes, “You only have one chance to make a first impression.”

• Set a goal to answer phones within 30 seconds of call placement
• Review deliveries, backorders ,open order reports, returns , and unprocessed transactions
• Facilitate crises solutions
• Improve selling techniques
• Understand pricing and product differences

Measuring customer service components both objectively and subjectively are critical to success.  You need a variety of reports to ensure that you are servicing the business and managing future decisions.  Some specific requirements are by account and total are as follows:

• Sales by account and total by week and SKU (“stock keeping unit”).
• Total unfilled orders and shipping by day
• Outstanding return authorizations and receipts
• Daily inventory, projected receipts and delivery dates

Summary

In this discussion about customer service, I have sought to provide you an overview of key relevant issues with a focus on their importance to marketing sales and growth.  While you need to address specific issues for your business this guide provides a general perspective on the procedures and systems for your efforts. While we generally focus on the technical and process issues, it is the cultural and training issues that will ultimately determine the success of our customer service.