Partnering with Your Customers

“If a customer feels like he’s part of a genuine partnership with your business, he may not care all that much about price,” notes Vistage speaker JoAnna Brandi . “On the other hand, if the relationship offers little value, customers will go elsewhere and buy for the lowest price. Saving money this way, they can afford value-added services somewhere else.”

Successful businesses place a high priority on delivering quality service. These businesses recognize that service itself is a product — “a product that’s sold every time the customer has contact with an employee,” says Vistage speaker Howard Hyden .

“Service” as a product? Between rival businesses offering the same goods at comparable prices, it’s often the crucial differentiator.

“Under-promise and over-deliver,” says Vistage expert Chuck Reaves . “Promise only what it takes to gain the customer’s commitment and then deliver 100 percent. If you promise 100 percent and deliver 100 percent, you’ve only met expectations. If you promise 80 percent and deliver 100 percent, you have exceeded expectations.”

Service:

• Must be produced upon demand
• Can’t be “recalled” like a malfunctioning toaster (you can apologize for bad service, but by then the damage may already be 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)
• Is subjective (because each person’s notion of “good service” differs, your staff should be skilled and flexible enough to deliver it in a variety of shapes and sizes)

“Good service shouldn’t be offered as an emergency response to a crisis or as an interim strategy to prop up sagging sales,” says Brandi. “It must be ongoing, credible and fully supported by senior management.”

How Customer Service Benefits Your Company

According to the Vistage customer retention experts, providing value not only serves the customer, it benefits the organization as well. Among the benefits:

• Greater efficiency. Focusing on areas that directly affect customer satisfaction requires businesses to use their resources more efficiently. “An effective customer service program forces the business to concentrate on what’s most important to the customer and away from the day-to-day distractions of the marketplace,” Hyden notes.
• Cost effectiveness. According to the U.S. Department of Consumer Affairs, the cost of gaining a new customer is roughly five times more than the cost of keeping one. (That’s because consumers spend slowly at first, but increasingly more after years of good experiences.) With a mere five percent rise in customer retention, a company’s profitability can jump by 25 percent 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.

“Too often, senior management looks at customer service as an expense item,” says Reaves. “We need to start looking at it as a profit center. Expanding your customer service program will actually contribute more to the bottom line than hiring a new marketing director or sales rep.”
Great Service After the Sale

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. Treating the customer with dignity adds value and entices him or her to come back again and again. Repeat customers equal greater profits.

So how can your business offer great customer service after the sale has been made?

• Never break a promise. Honor your commitments. If a shipping delay occurs, keep customers informed on developments. When you communicate in an honest, timely manner, customers tend to be very understanding and patient.
• Show customers you care about doing business with them. People respond to businesses that are friendly, accommodating and interested in them. You show you care by sharing current product information and helping customers when they need further assistance.
• The customer can teach you about your business. “When a customer comes to you with a perception about your business, whether it’s accurate or not, it can tell you something,” Reaves says. “After all, aren’t customers the ultimate goal of your advertising, distribution, pricing, marketing and sales efforts? What they say reflects how well you’re achieving what you set out to do.”
• Help with problems, don’t evade them. When a customer comes with a problem to your front-line staff, they should never pass it on. Customers don’t want to hear, “That’s not my job.”
• Never too busy to help. Never let your customers feel like they are intruding on a staff person, interrupting them in the course of talking on the phone, typing up an invoice, etc. Your employees’ primary job is helping the customer or delivering outstanding service to the customer.
• Think ahead. No longer is it enough to meet your customers needs today. Your organization must always be thinking ahead, anticipating customers’ future problems and desires. Waiting for the customer to bring these concerns to you means you’re simply too late.
• Every employee counts. Do your employees in shipping or the mailroom believe that only those on the front-line impact the customer? Ultimately, every employee is responsible for customer satisfaction and well-being. When employees fail to work together, sooner or later the customer is negatively affected.

In a market where quality goods are a dime a dozen, solid marketing can make all the difference to your company’s success. According to former Vistage speaker and strategic marketing expert Craig Palubiak, by staying in touch with customers, anticipating their needs and offering value-added products and services, you can meet your market share, revenue and profitability goals. He offers six marketing steps to maintain your edge over the competition.

1. Think mission before commission. It’s critical to have a well-defined corporate mission, and to keep that mission in the minds of employees. Understand that your mission is a vital part of your company’s culture and that if carefully allowed to develop, evolve and crystallize, it can lead your organization to prosper. It’s also important, says Palubiak, to learn the missions of your customers and prospects to see if they’re congruent with yours.
2. Learn to read the need. Develop mechanisms that allow you to stay in touch with the marketplace, so you stay a step ahead as the market changes. “When asked what made him a great hockey player,” says Palubiak, “Wayne Gretzky responded, ‘Most players go where the puck is. I go where it will be.‘ The same is true for businesses. Go where the market is going.”

   A good customer survey can prove invaluable in this endeavor. By a “good” survey, Palubiak means one that, in addition to measuring your performance with customers, also measures how important your performance is to them and what it costs you to deliver that performance. You’ll have a better picture of where you are wasting time and resources on business that doesn’t really matter to the customer, and where you’re doing well.

3. Move from feature to teacher. In the days before the new economy, companies could get by merely selling a product’s features. Today, however, you have to be a knowledge source for your customers. “Statistics speak volumes on this,” Palubiak points out. “Sixty-five percent of customers defect because of service indifference. And while 96 percent of unhappy customers never complain, they’ll tell an average of nine other people about your poor service. So welcome complaints, seek them out, and improve your odds of keeping good customers and gaining new ones.” To avoid the complacency that leads to lost customers, he recommends asking yourself what your customers’ three primary needs are and what they will be.
4. Master “customerization.” Not all customers are the same. “Some are optimal, and some are lousy,” Palubiak says. “Great marketing consists of discriminating between the two. Get rid of the lousy ones, or find a way to turn them into optimal ones.” When you look for optimal customers, pay attention to margin as well as volume. You might have low-volume, high-margin customers who are well worth pursuing. See where your true opportunity is, and make a decision about where you want to go with each customer.

   Palubiak also points out that short-term customers often are undervalued. While long-term customers may be your company’s lifeblood, certain types of short-term customers can benefit your business. Treat them separately and differently, but make sure they don’t interfere with your ability to service your long-term clients.

5. Let competition drive, not die. Nothing pushes you to new levels of performance more than competition. Just make sure the competition pushes and doesn’t guide. To harness that drive, you have to know where they are and what they’re doing. “Talk to your customers and develop some clear competitive intelligence,” says Palubiak. “Get out of your office and visit them. Find out who the top three competitors are, why, what you can learn from them, and what you can do differently.”
6. Create an environment of intrapreneurship. Intrapreneurship involves giving some ownership to employees. That doesn’t mean giving away the company, but it does mean empowering employees to make decisions. Palubiak recommends becoming more proactive and creative in what you do as leader, so you’ll limit your reactionary time and work smarter. “By breaking out of routine, you’ll see opportunities you’d otherwise miss,” he says. “For one thing, look at marketing as an investment and not an expense. Get the right people in place and train them thoroughly. You’re the only one in the company who can make it safe for people to take risks and get involved.”