UK: The Principles Of Great Customer Service

Last Updated: 24 April 2012

Every business, large or small, depends on customers for its livelihood. Surprisingly, a great many businesses fail to honour this common-sense principle.

Excellence in customer service is arguably the single most important element in determining your company's future success or failure. Regardless of the product or service you provide, you are in the business of serving customers.

The CEO/MD must transmit three essential principles to all employees:

  • Every function of the company must look at the business through the eyes of the customer.
  • Each person in the company must add value on top of the product or service.
  • The customer, not the company, determines value.

Building customer loyalty

All too often, companies focus their energies on going after customers and too little effort into building a solid customer base. This short-term strategy usually ends up backfiring on the bottom line.

Successful companies focus "outside-in" (looking through the customers' eyes), not "inside-out" (looking through your own eyes). They maintain an "outside-in" focus through the following techniques.

  • Model the behaviour. Create an environment where employees can make decisions at the tactical level. Leaders need to model the behaviour they want employees to exhibit, not the "do as I say, not as I do" model.
  • Know your customer. Allocate time to go out and meet with customers and suppliers.
  • Manage out, not up. If an employee's orientation is to please the boss, he or she won't focus on pleasing the customer.
  • Put customer service first at your management meetings. If you always ask questions about cost cutting or meeting the budget, your management team will focus on these issues, not on customers.

The first question every customer asks (or thinks) is: "What's in it for me?"

To keep the focus where it belongs, we offer these tips:

  • Guarantee your products and services. Stand behind everything you do or make. Otherwise, what possible reason can anyone have to buy from you?
  • Make on-the-spot decisions. No one wants to hear: "Let me check with ..." or "I'll have to get back to you". A customer who comes to you with a problem and gets an immediate decision will – more often than not – walk away satisfied.
  • Keep your promises. In an attempt to outdo the competition, you may occasionally be tempted to over-promise delivery of goods or services. Don't do it! Make promises you know you can keep. Customers appreciate it.

Measuring customer satisfaction

Most businesses measure success by such typical key indicators as profit margin, sales and accounts receivable. These indicators measure what's in it for the business. The real challenge lies in measuring what's in it for the customer.

In addition to the most obvious measurements (referrals generated from current customers, level of repeat business from current customers, rate of customer complaints), we recommend these future-customer-focused key indicators:

  • Time to answer enquiry. Business studies show that a customer lead loses 1% of its potency for each day it remains unanswered or unfulfilled. Responding faster than your competitors translates into a clear advantage.
  • On-time delivery. If your product doesn't get to the customer when he or she needs it, the value of that product is diminished severely. Promising a specific delivery date and not sticking to it creates the perception that your company is incompetent.
  • Error rate. How many mistakes are made when entering customer orders into your computer tracking system? These errors often translate into wrong products being shipped and/or increased delivery time.
  • The 80/20 rule. In most businesses, 80% of profits come from 20% of customers. At a minimum, companies should track their top 20% of sales to see if they're growing, staying flat or on the decline.

Establish benchmarks that assess quality on a continual basis. Measure key indicators in small increments that can be tracked quickly and efficiently. This may seem like a time-consuming approach, but it's far preferable to waiting until the end of the fiscal year to assess the quality of your goods or services.

Moments of truth

Whenever a customer comes into contact with any facet of your business, it's an opportunity to form an impression. These "moments of truth" can make or break your company.

Your employees' first responsibility is making customers feel special. A customer-focused company recognises that it's not in business to deliver a product or service, but to enable people to reap the benefits of that product or service.

Customers have certain expectations. Moments of truth are inextricably linked to these expectations. They include:

  • Ambience. Customers expect to find clean, comfortable and attractive surroundings. They expect to be greeted warmly by well-groomed, professional-looking employees.
  • Quality. Customers expect quality in every part of your business, from the way your staff treats them to the product or service itself.
  • Solutions. You're expected to stand behind the product you sell, to be an expert in this area. Your customers will have questions. You should have answers.
  • Reliability. The customer expects your product or service to be reliable and dependable. A sense of confidence grows out of this expectation and can lead to much future business.

Each business has only a finite number of opportunities to both meet and exceed customer expectations. The key is identifying these moments as the customer sees them, not as you do. If you're successful, you can win customer loyalty for life.

The value of service

Successful businesses recognise that service itself is a product – a product that's sold every time the customer has contact with the organisation. Service:

  • must be produced upon demand
  • can't be recalled like a malfunctioning appliance (you can apologise for bad service, but by then the damage may have already been done)
  • is experienced by the customer at the moment it's delivered (there's no opportunity to take a "time out" and consult with management).

Providing value not only serves the customer, it benefits the organisation as well. The benefits include the following.

  • Greater efficiency. Focusing on areas that directly affect customer satisfaction requires businesses to use their resources more efficiently.
  • Cost effectiveness. According to various experts, the cost of gaining a new customer is roughly five times more than the cost of keeping one. With a mere 5% rise in customer retention, a company's profitability can jump by 25% or more.
  • Increased morale. When the CEO, senior management, mid-level management and front-line staff are "in sync" on the importance of customer service, everyone shares a common purpose and goal. The result: enhanced employee morale and satisfaction.

In any industry where two or more businesses sell the same goods or services, success is ultimately measured by how well the customer is treated – not only at the time of sale, but afterwards as well. Your business can offer great customer service after the sale in the following ways.

  • Help with problems, don't evade them. When a customer comes with a problem to your front-line staff, they should never be passed to another employee. Customers don't want to hear: "That's not my job."
  • Never be too busy to help. Never let your customers feel as though they are intruding on staff. Your employees' primary job duty is providing outstanding service to customers.
  • Let the customer teach you about your business. Customers are the ultimate goal of all of your advertising, distribution, pricing, marketing and sales efforts. What they say about your business reflects how well you are achieving what you set out to do.

Employees: your internal customers

How many companies overlook the need to develop good internal customer service – the care and nurturing of first-rate employees who are hired to do whatever it takes to get and keep a customer's business?

Most companies today simply don't invest time up front to understand what type of people thrive in their corporate cultures and what they need to take good care of customers. Here are some tips to facilitate the recruitment process:

  • Profile the type of person you feel is best equipped to serve your customers.
  • Incorporate the latest behavioural recruiting techniques in the interview process.
  • Make sure several staff members interview the applicant.

Recruiting the right employee is only the first step. What happens during orientation and training is equally important. Companies that deliver world-class service have a formal orientation programme, a comprehensive employee handbook and numerous ways to introduce a new employee to the company's culture.

In these organisations, company standards are clearly articulated. Employees know what is expected of them. Experienced staff members share their knowledge about implementing these standards in daily business life.

Through training and everyday work, the employee focus should be on customer service. Constantly ask yourself and your staff: What have we created of value today? What can we do better than yesterday?

CEOs and senior management can encourage customer focus in the following ways:

  • Pay attention to culture. Encourage staff to look at other companies' cultures, for example during visits to their local supermarkets. The more you get people talking about customer issues, the more you get problems out into the open and start making improvements.
  • Make experts of your staff. Invest more in training and information. Build a company library. Make educational books, CDs and podcasts available to everyone. The more you invest in your employees, the more loyalty you get.

Customer service makes the difference

Product quality no longer guarantees a competitive advantage. Today, it's a commodity; the customer expects it. You have to find a way to differentiate yourself from the competition.

Businesses are increasingly finding that employees can be that competitive advantage. The key is recruiting employees with the skills to deliver outstanding service.

Outstanding service requires:

  • a sincere commitment to serve all customers at the highest possible level every time
  • clearly articulated policies about how customers should be serviced, as well as a system of accountability for enforcing these policies
  • a culture that requires serving customers consistently in a manner that not only meets their expectations but often exceeds them.

Achieving outstanding customer service is what sets your business apart and keeps customers coming back again and again.

What do your customers think?

Offering quality service to customers isn't a mysterious process. Customers who interact with your organisation every day are the ideal source for the feedback you need.

Your internal records may suggest you're doing a great job, but the only voices worth listening to belong to your customers. Find out what they want, provide it to them on a consistent basis and ask them how well you're doing.

"Listen and learn" sources include:

  • Customers. For many businesses, the person who purchases your product isn't necessarily the one who uses it. To get a clear picture, always be sure to talk to the end-user.
  • Sales representatives. Often, sales reps are the eyes and ears of an organisation. Based on their first-hand contact with customers, they are certain to have valuable insights for the business.
  • Ex-customers. Track down former customers and find out why they no longer do business with you. This can also be a valuable source of information.

Surveys are an effective way to gauge customer satisfaction. They can also measure the importance customers place on specific characteristics of these goods – which in turn offers additional information on where to focus your customer-retention efforts.

Because of their give-and-take format, focus groups can generate better information about customer satisfaction. They allow businesses to probe beneath the surface and get a clearer understanding of why customers perceive the organisation the way they do.

Also encourage management and front-line staff to take a comprehensive approach to gathering feedback. Instances include:

  • Point of purchase. When the actual transaction is taking place, ask the customer: "Was everything to your satisfaction?" Better yet, ask: "Was everything perfect?"
  • Order forms. Include a "comments" section on your order forms, making it easy for customers to provide feedback. Try this on your invoices as well.
  • Freephone. Install a cost-free telephone number that customers can call with their comments and complaints. Encourage use of this freephone option in your mailings and handouts.
  • Voicemail. Install a dedicated "customer feedback hotline". Let your customers know that all messages on this hotline will be heard or read by senior management and by all employees with direct customer contact.

Turning complaints into devotion

According to the Technical Assistance Research Programs Institute, the US-based customer service research firm, the average customer with an unresolved complaint tells 9 to 10 people about the experience, while 13% tell more than 20 people. And for each unhappy customer heard from, the average business has 26 others it never hears from.

Complaints should be viewed as opportunities – a chance to learn what customers don't like about your products or services, and what can be done to make things better. We offer these tips for coping with unhappy customers.

  • Reward the customer. The first thing to say in response to an angry customer is: "Thank you for bringing this problem to my attention." This "rewards" the customer for taking the time to contact you in the first place.
  • Stay calm. Remember, you're here to serve the customer. This is your chance to show what you can do!
  • Listen. Pay close attention to the customer's complaint. He'll be able to tell – even through his irritation – that you care about his complaint and that you value his business.

A prompt response is by far the most effective way to neutralise customer complaints. Whatever the situation, make sure it's taken care of. Nothing kills customer loyalty faster than not following through on problem resolution.

The customers who got away

Businesses have a choice when it comes to selecting their customers. Not all customers are a good fit for your business. Nevertheless, you should be very careful about whom you let go and whom you hang on to.

Only the CEO and/or senior management should delist a customer. This customer should only be let go for just cause – either because they have become unprofitable or because they have asked your company to do something immoral, unethical or illegal.

Some customer defections are inevitable. Still, thriving businesses should have a strategy in place to make the most of these defections.

If customers are defecting in significant numbers, first consult your front-line staff. They know how people feel about the company and can, if properly trained, observe what's going on around them, as well as offering keen insights and possible solutions.

Work out why the customer has stopped doing business with you. Be open to feedback about your company. Seek concrete, specific information that will lead to genuine product or service improvements.

When customers say "I'll never do business with you again", what they're really saying is that you have to earn back their business. Given enough time and energy, you can do it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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