Originally Published in the December 1993 issue of The Outfitter Magazine.
The following article was written by Dr. Francis Buttle, and has been reprinted with permission from the Ontario Marina Operators Association.
Consider these findings from recent research into customer service. A huge majority of executives believe that it is the key to successful marketing and profitable trading.
Word-of-mouth commendation – or condemnation – is powerful. Dissatisfied customers tell an average of 15 people about their experiences; satisfied customers tell three. It can cost more than five times as much to win new customers as it does to retain a customer. Over two thirds of supplier-switching can be accounted for by bad service.
The PIMS (Profit Impact of Marketing Strategies) researchers have found that companies renowned for service excellence consistently out-perform their competitors. You don’t need to be an Einstein to read these signs.
Customer service is critical to corporate performance. If the job of a company is to create and keep customers, then the basic function of the company must be to provide customer service.
Customer service incorporates all the interactions between customers and your company’s processes and employees, whether face-to-face or mediated by technology. How you answer the telephone, how you respond to mail enquiries, all these are part of customer service. Customers want reliability, responsiveness, empathy, flexibility, courtesy.
Give them these and stay in business. Ignore them at your peril.
Much of this appears common sense. After all, if you have no customers, you make no profit and you have no business. You may as well stay at home and watch the soaps. But if it is common sense, then why do so few companies do a great job of customer service? It requires a genuine, company-wide commitment to the principle that long-term relationships with customers are more important than short-term sales. Customers must be seen as people with needs to be met and problems to be solved, not simply targets to be sold.
The 10 Rules
We can learn a lot from those companies that excel at customer service. Here is a check-list of 10 ideas which will help you deliver great service:
Get out of the office and spend time with your customers. Find out what they think about your company’s service, and your competitors’. Listen to what they say. Make sure that every executive, whether in a customer contact position or not, understands the customer’s experience. More importantly, spend time with your ex-customers. Find out why they took their business elsewhere. They can tell you what is wrong with your service. Listen and learn.
Encourage complaints. When customers complain, they are telling you that your service in inadequate. Complaints are a helpful database. Over time, if you find patterns emerging, you’ll be able to identify service system failures, rather than one-off service breakdowns. By encouraging complaining behaviour you have the opportunity to nip negative word-of-mouth in the bud. If they are complaining to you, your customers are not complaining to those other 15 people.
Set standards. Where possible, and it generally is, make those standards measurable. Answer phone calls within three rings; reply to mail enquiries by return post; replace all returned goods within 24 hours; deliver within two working days of receipt of orders.
Service standards must be those standards which your customers want, not what you think they want. You should establish these benchmarks first, then design the systems and recruit the staff to deliver them.
Invest in internal marketing. Your employees are your greatest asset in your efforts to deliver high-quality customer service. Their interactions with customers are what makes or breaks your service resolution. If they are not satisfied by their work experiences, it is likely to be communicated directly or indirectly to your customers. We can all have bad days, but a consistently unreliable, discourteous, unhelpful, unresponsive, incompetent employee will drive customers away.
Employees need to understand your service mission, to invest in your service goals and to regard themselves as important contributors to their achievement. Internal marketing requires that you make the effort to identify and satisfy employee requirements in the workplace. A place to start is to identify what motivates each employee to work hard and smart. They need to have reasons to invest in your service mission and not all will be motivated by the same rewards. Some seek security, others the respect of peers. Once you have found out, you can link rewards to service performance.
Train your employees. It is hard to quantify the value of training. Perhaps that is why so little is done. It is vital to the success of your service mission. All customer contact employees not only need technical training in their own particular areas of expertise, but also training in interactive skills and selling skills. Equally important is that they should understand the relationship between excellent service, the company’s performance and their job security.
Blueprint service delivery. A blueprint maps out what happens when employees come into contact with customers, and what should be happening behind the scenes, away from the customer’s eyes, after the interaction has taken place. Blueprints standardize interactions. Their consequences ensure that service standards are maintained.
The blueprint should spell out who does what, when and how. For example, if a customer complains, who handles it? What is the first response? What repair is offered? Who is responsible for implementing the repair? And so on.
Most of what is blueprinted is invisible to the customer but nevertheless, it is important. In essence, blueprints serve the same purpose as operations manuals which are the standard bibles for many service businesses. However, they have an additional advantage. Blueprinting can help you to identify likely failure points in service delivery. Critical points are when one part of your business has to communicate with another, or when you communicate externally. When service breakdowns occur, the blueprint can serve to focus attention on systems defects, rather than assigning blame to individuals working within the system.
Deliver excellent service recovery. There is probably no company which manages to produce 100 per cent error-free service. With the best will in the world, employees will give incorrect information, delivery trucks will break down, or you won’t have replacement parts in stock. What you do when things go wrong, and how you do it, has an immense impact on customer perceptions of your service quality. Often, customers have a higher regard for companies that deliver great service after a service breakdown than for companies that get it right the first time.
Monitor customer satisfaction. Board meetings invariably contain financial reports concerning the health of the company. Equally important is an understanding of the health of the customer. How are you doing in terms of critical dimensions of service quality – reliability, responsiveness, empathy?
You’ll need to design instruments to track customer perceptions of service performance. Only then can you identify gaps between the service standards you have set and the performance that you deliver. When you have identified these gaps you can begin to identify the reasons. Is it a system defect? Does it indicate a training need? Does it suggest that your advertising has raised service expectations beyond the level that you can reasonably deliver?
Empower your service employees. Customers do not appreciate having to deal with multiple levels of corporate bureaucracy to get action on service issues. Authority to handle service problems needs to be devolved to those who interact with customers. Referring problems upwards is unacceptable. Some customers will undoubtedly take advantage of this regime, but 95 per cent of problems and complaints are genuinely felt.
It is not worth penalizing the vast majority in order to stop a minority of abuses. The devolution means a flatter organization with fewer levels of hierarchy.
Learn from other service organizations. Be open-minded. Assume others do it better. Read the trade press to keep up to speed on innovations in other businesses. Identify and monitor companies renowned for their great excellence. Certain names are widely cited for their service professionalism: Avis, Disney, Federal Express, Chubb Insurance. Their successes should serve as the benchmark by which you judge your own performance.
In the service industries, marine retailing included, service expectations do not stand still. Customers invariably want improved service. What they experience in one sector of retailing influences their expectations in another. Responding to customer expectations of service performance is only part of the success of the leaders cited above.
Very often, customers cannot articulate what they want by way of service. Creative management is needed to innovate and lead the way to new service initiatives.