Listen to What the Customer Says

Offering quality service to customers isn’t a mysterious process. Customers who interact with your organization every day are the ideal source for the feedback you need to stay in business.

That’s the verdict of Vistage customer retention experts JoAnna Brandi , Howard Hyden and Chuck Reaves . They say there are numerous ways to learn what your customers want; it’s important, first and foremost, that you take the time to listen.

“Teaching employees to ask insightful questions helps you form a vivid picture of your customers’ needs,” Brandi says. “It’s easier to be compassionate and empathetic when you know the whole picture.”

In the same respect, it pays to go out and observe customers in their “natural habitat.” Says Hyden: “Spend time with your customers. Get to know their business and ask them: ‘Is my product serving your needs? If not, how would you design it differently?’”

A surprising number of businesses initiate wide-ranging customer service programs without ever talking to their customers. According to Reaves, “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 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 or service isn’t necessarily the one who uses it. To get a clear picture, always talk to the end-user.
• Sales representatives. Often, sales reps are the organization’s eyes and ears. Based on their firsthand 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 be a valuable source of information. (A tip: Send a box of chocolates or a basket of fruit along with your survey!)

“Customer service is all about exceeding customer expectations as defined by the customer,” Reaves says. “To know what customers want and expect, you have to ask them!”

To Survey or Not to Survey?

Surveys are an effective way to gauge customer satisfaction about your products or services. They also can 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.

“Surveys are relatively simple and inexpensive to use, but to be truly effective they must have clear and precise goals,” Hyden says. “Vaguely worded or broadly categorized surveys may generate a great deal of information, but very little of it will be useful.”

Certain factors influence customers’ responses to surveys:

• Phrasing. A question phrased in positive terms (“How satisfied are you?” vs. “How dissatisfied are you?”) usually provokes more favorable responses. The majority of customer satisfaction survey questions are phrased in positive terms.
• Timing. It’s often as important when you survey customers as what you survey them about. Studies indicate that surveys conducted immediately after a purchase evoke more favorable responses than surveys administered at a later time.
• Refusal to admit a mistake. Many customers believe that giving a low satisfaction rating reflects badly on their own buying habits. They don’t care to admit they’ve made a bad decision about a recent purchase. As a result, they often compensate by giving higher-than-average responses.

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 their organization the way they do. However, focus groups are time-consuming and more expensive than surveys to administer.

“Ideally, a combination of surveys and focus groups produces the best results,” Brandi says. “Remember, the information you gain helps direct your future customer retention efforts. Having satisfied customers is a good first step, but more effort is needed. Don’t equate satisfaction with loyalty.”

Feedback Is All Around You

Building a loyal customer base is like building a family or partnership. Like family members and business partners everywhere, customers want a say in what’s going on. When they are invited to “participate” in your business, customers commit themselves to a sense of ownership and loyalty.

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

• Point of purchase. There’s no time like the present — the moment when the 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.
• Newsletters. Solicit letters from your customers and print them in your organizational newsletters. This demonstrates your interest in their attitudes and your desire to share their thoughts with employees and others.
• Toll free. For customers who live and work beyond local area codes, install a toll-free telephone number they can call with their comments and complaints. Encourage use of this toll-free phone option in your mailings and handouts.
• Report cards. Simple, easy-to-use “report cards” (like those used by hotels and restaurants) offer instant feedback from customers doing business with you. Be sure to offer the additional option of having them mail the reports back in a prepaid envelope.
• Voice mail. With today’s technology, there’s no excuse for not having 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.

“Gathering feedback from a variety of sources results in an objective, comprehensive picture of who your customers are, what they want and how you can better serve them,” Reaves says.

Hyden adds, however, that collecting customer feedback is only half the battle. “All this data should be closely analyzed and shared with the staff in an organized, accessible manner. Otherwise, it’s useless.”

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.