The science of service Featured

7:00pm EDT February 23, 2009

If you’re looking at your budget and considering cutting back on support for customer service, you might want to reconsider. About 96 percent of unhappy customers don’t take the initiative to tell you they’re unhappy with your service, but they will tell nine other people and not return.

Customer service should be as important to you as it is to your customer, and customer service is second in importance only to product quality when it comes to satisfying customers.

The difference in today’s market is that brand loyalty isn’t what it used to be. Businesses are making a new promise every day without credible reasons for the consumer to believe the promise. Customers make purchases because they believe you’re selling something they need, but they also know they have many options. A single bad experience with you can result in your customers making purchases from the guy down the street next week. The products may be similar, but the quality of your customer service can be why they prefer to make purchases with you.

“The secret sauce in any customer service program is having a crisp, clean conversation with customers,” says Brett Browchuk, senior vice president, service operations, CIGNA HealthCare. “At the end of the day, if you can’t make your current list of customers happy, you have little hope of obtaining more.”

If customers have a good experience with your business, they’re more likely to return and spend money again. Positive word-of-mouth is one of the cheapest and most effective means of growing your business. It’s also much less expensive to retain a customer you already have than to attract new ones.

Customer service in today’s market entails doing business where and when your customers want to. The trick is to cut costs while being flexible with your ways of improving customer service quality across all avenues, including online and by phone.

There’s an easy formula for this, yet it’s not utilized. It starts with paying better wages. Then you have to invest in your employees’ ability to perform through education and train them to respond to customer needs.

Why a customer service program is important
Your customer service representatives have unlimited access to your customers, products and equipment, yet they’re largely considered dispensable and are often treated as such. This is the wrong approach. You can’t personally know who your regular customers are or what their preferences entail, but your employees do, so it’s important to retain them. Investing in customer training and rewarding them with a pay increase upon completion of the course or offering another benefit, such as time off, makes for a more enthusiastic employee.

“Businesses need to re-evaluate how they treat and what they pay their customer service representatives,” says Rick Germano, senior vice president of customer operations, Comcast Cable. “It’s smarter to pay your employees $15 an hour and have them stay with the company five or 10 years rather than pay $12 and have to keep churning out new workers.”

Although many customer service positions are considered entry level, giving the employee the option to advance within the company will be an incentive for the employee to stay and can help you reduce employee turnover, which on average costs businesses 20 percent of an employee’s annual salary to replace that person.

“Retail, hospitality and financial service companies are more focused on customer service than some other industries, but the rest are starting to catch on that it isn’t something that you can focus on if everything else is in order,” Browchuk says.

You may see investing in customer service training as a luxury in today’s economy, but experts warn that not doing so could lead to your company’s demise.

What you can do
The biggest error you can make is getting too caught up in cutting costs and other internal workings to see your business from the customer’s point of view. Customer service is what keeps the lifeblood of your business — the customers — coming back. Even when inevitable mistakes are made, customers return if the error is handled properly.

“Even now that people are watching where they spend their money a little more carefully, consumers are willing to pay a little more if they feel the customer service is exceptional,” says Robert W. Wilson, president of ARAMARK Refreshment Services. “You can make money through your customer service if you are differentiated in some way, have market share majority or you’re a niche player.”

Another mistake is investing money in loyalty programs focusing on drawing in new customers, while losing focus on appeasing your current customers. If you don’t ask customers about their experience with your business, they’ll likely not tell you — but they will go home and tell others. If you stay flexible and listen to what they say by acting on their feedback, you can best design a customer service program that works for you.

What many companies don’t understand is that good customer service is rare. If you already have brand recognition, you can further your competitive advantage by listening to customers’ concerns and acting on them. You need to define what good customer service means to your specific set of customers before you can best meet their expectations. This can be achieved by polling them in a variety of ways, including comment cards, e-mail or an online form.

“My personal beef is companies can be pennywise and pound foolish where they trim costs by lowering quality — one measurement is answering 80 percent of telephone calls within 30 seconds,” Germano says. “If I change that number to 70 percent in 45 seconds, I can save tens of millions of dollars in the short term but that is cutting into customer service quality and damaging long-term profit.”

Even with well-trained employees and a list of customer recommendations, you still need your managers to be an integral part of your program. They should point out positive behavior and not just the negatives. Successes should be noted to encourage employees to do more than the bare minimum, and negative incidents should be handled immediately instead of waiting for an evaluation.

“Employees may repeat a behavior they’re not aware is undesirable,” says Liz Tahir, an international marketing consultant and speaker. “Having the proper communication with employees is essential. If you treat them well on a regular basis, they won’t react negatively when a manager points out an area that needs improvement.

“Employees treat customers the way you treat them. Ask yourself if you greet employees enthusiastically, interact politely and try to accommodate them in their requests.”

Making sure employees have the correct set of tools to perform their jobs is another important step in ensuring good customer service. Proper training and empowering employees to handle customers’ concerns or problems will build employee confidence while expediting the customers’ requests.

“Always putting yourself in the customer’s shoes when determining how to best resolve issues or respond to a request is the best way to resolve issues,” Tahir says. “All of the great companies have incorporated customer service in their core business philosophy, helping to brand their business as one known for great customer service.”