Customer service key to success

PETERSEN-FREY-For the Frontiersman

It's a fact of doing business. To stay competitive, business people must constantly monitor the quality of the customer service they offer. If the first experience is poor, they may never have a chance to change that expectation. The customer will find another supplier. Yet, customer service is a buzzword that like many others has lost its significance. It is time to revisit this valuable asset.

It has been demonstrated that it costs up to five times as much to get a new customer as it does to retain an existing one. One of the most powerful ways to keep customers happy is to systemize operations so clients have the same positive experience every time they encounter a business. Committed customers will buy more often, will try new products, will recommend the business and will remain loyal even if prices are higher than the competition. Research has shown that a consumer is willing to spend 10 percent more for the same product with better service. Remarkably, if there is a complaint, and it is handled quickly and pleasantly, 82 percent of customers will return to the establishment.

Every single contact that a business has with its customers, internal and external, either enhances or corrodes that relationship. This includes letters sent, advertisements and phone calls made or answered. It includes employee contact and vendor contact. So, a business is only as good as its worst employee!

Business owners or managers should try to see the business through the customers' eyes and create systems that will engender a positive customer service experience -- let the customer feel valued and appreciated. According to the US Bureau of Labor Statistics, in 1999 there were close to 110 million households in this country, and collectively those families spend more than $3.6 trillion a year. They range in age from 12 to over 80. They come from varied ethnic, religious and cultural backgrounds. They are very diverse in their tastes. They are also more educated, technologically savvy and wealthier than any previous group of consumers. Businesses must understand their customers and recognize that they are less tolerant of mistakes and are demanding higher levels of service.

Important also, is for business managers or owners to see their business through their employee's eyes. One of the goals of customer service training is to instill in employees that it is their business, too. Customer service must be viewed as company etiquette. If employees are not treated well, it's tough for them to treat others properly.

Often the difference between a good company and a poorly run company is not always demonstrated when things run smoothly; the difference is how they handle situations when there is a mistake. A feedback loop for customers and employees should be created. It won't be perfect every time, but some control over business reactions to a customer when things go wrong is necessary. Be honest, be fair and when in doubt "the customer is always right," still holds true.

Customer surveys can be a simple tool to gauge service and can be mailed with an invoice when in-home service is provided. A simple thank-you card can also go a long way. In March 2002, Inc. Magazine listed the Top Ten Commandments of Customer Service. This is a terrific tool to help achieve a level of service that will help outdistance the competition. They are as follows:

1. Care about employees and treat them well. Employee relations mirror customer relations.

2. Praise and recognize employees often. The more, the better and don't just leave it to 'employee of the month' programs.

3. Know and listen to customers. If you don't really know your customers, how can you value them?

4. Believe that customer service drives profit. Your bottom line can be positively impacted if service is good enough.

5. Train and empower employees. How can you expect employees to handle difficult customers if they've never been taught how to do it?

6. Clarify your service strategy. Are you going to be a Ritz Carlton or a McDonalds as far as service goes? How far are you willing to go to achieve the level of service desired?

7. Weed out policies and procedures that are customer unfriendly. For example, is your return policy easy to understand and implement?

8. The company culture must be fanatical about customer service. As Home Depot states: "If you're not serving the customer, you'd better be serving someone who is."

9. Continually improve service levels. Everyone in the business needs to continually look for ways to improve service. Develop systems to capture everyone's ideas and implement the best of them.

10. Remember that everyone has customers. Internal customer service is just as important as external customer service.

Remember, good customer service equals lasting relationships.

Anya Petersen-Frey is the director of the University of Alaska's Mat-Su Small Business Development Center.