Customer Loyalty

Don’t think of Customer Sevice as something you do, it needs to be the core of your company if you want to make loyal customers. True customer loyalty is hard to get so every part of the business has to be focused on it if you are going to find more than one or two.

Loyal customers, they don_t just come back, they don_t simply recommend you, they insist that their friends do business with you. - Chip Bell

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Simple Customer Service (or How to lose a customer for $0.30)

It’s a well-known statistic that a happy customer tells 9 people on average and an unhappy customer tells 16. Unfortunately, if you provide poor customer service to a marketer they are likely to turn it into a lesson for thousands. Every company I know is constantly looking for new customers but it is always cheaper to retain the ones you have. On average it is 6-7 times more expensive to get a new customer than to keep an old one. How do you keep them? Most cases it is all about the customer experience. Today is a lesson on flexibility during the customer experience.

The short version of the story is that a popular fast food chain had an advertisement on the menu board showing the price of an Italian sub. The main menu board had a different price. The manager was already at the register due to an issue with the computer freezing while taking my groups order. The discrepancy was pointed out, he said there was no difference in the sub so a member of my group ordered the cheaper version. Of course, the more expensive version was what was in the computer. No problem, punch in the discount, change the difference, reduce the price down to the advertised price right? Wrong, apparently corporate sets the prices in the computer and the manager can’t do anything about it. Let me repeat that, the manager has no control to give customers the price they are advertising on the menu board. He absolutely refused to give the reduced price. It was a matter of $0.30. Lost a loyal customer for $0.30 due to inflexibility. Not to mention the company, famous for its social media work, has ignored the post pointing it out all day. Granted, it’s a big company, but when your business is tagged in the same post as #customerservicefail, you might want to be paying attention. Now there’s a couple tweets, a blog post, two Facebook posts and a spot in an upcoming lecture. All this fuss for $.030? Well, yes, it’s my $0.30. If I spent $0.30 more on every transaction through a year when I wasn’t supposed to I would lose a couple hundred dollars. It eventually adds up so I tend to be aware when I am not paying the advertised price. Plus I feel such tactics are underhanded and it makes me feel unappreciated when a company thinks it’s ok to overcharge their customers.

 

The lesson is about flexibility. The customer doesn’t want to hear what corporate policy is. The customer doesn’t want to hear what you can’t do. Tell them what you can do, what the solution is. In simple cases like a price screw up, get them the advertised price. If it is truly against policy and there is no way you can change something, tell them what solutions you can provide, not what you can’t. Don’t hide behind policy and procedures, it’s bad customer service.

 

Arbys fixed
Of course, as we ate the manager “fixed” the problem.

 

 

The Do’s and Don’ts of Customer Service

Customer service is the lifeblood of a business. No matter what business you are in there is some element of customer service involved. Here is an infographic giving some of the Do’s and Don’ts of customer service to use as a baseline.

Do's and Don't of Customer service

It’s All About Customer Service

If there is one thing I have learned in my 25 plus years of business it’s that customer service should be a top priority because it is part of every aspect of your business. Marketing? Begins with good customer service. Sales? It is customer service. Accounting? Ok, maybe not EVERY aspect, but accounting can be helped by good customer service. Here are some stats to keep in mind as we explore customer service this week.

Why Customer Service Matters

Customer Service – Expectation vs. Reality

Dennys

We have all experienced a disconnect with what we expect and what we receive. The picture of the food looks nothing like what we get in the package. Sometimes it comes as a big shock because the discrepancy is so obvious and it warrants comment. Such a situation happened to me recently. I ordered a Steak Skillet at a fast casual family restaurant (I won’t mention the name, but it rhymes with Denny’s) because the amount of food was impressive. I would go home full plus something for lunch the next day.  The reality was that I went away hungry and angry. Not only was the food about a third of what was shown, but the customer service surrounding this obvious error compounded the situation. According to McKinsey, 70% of buying experiences are based on how the customer feels they are being treated so not all is lost when an experience starts to go bad.

This experience really started with the waiter asking if everything looked good.  I showed him my mostly empty plate and asked where the rest of the food was. He mumbled something about being sorry I didn’t like the portion and ran away from our table. I didn’t realize potatoes had gotten that expensive. Resolve a complaint in the customer’s favor and they will do business with you again 70% of the time according to Lee Resources, ignore the complaint and you compound the problem. Honestly, I expect a lot of potatoes and filler in a meal like this, eggs and meat are pricey in comparison.

The next misstep was when he made sure to not check on us through the rest of the meal, probably because he could tell I wasn’t happy with the response. A Customer Experience Impact Report by Harris Interactive/RightNow showed the top two reasons for customer loss is that customers feel poorly treated and a failure to solve a problem in a timely manner.

The last misstep was when we went to pay and we were asked if everything was ok. I told them no and why. The response was “Oh, sorry. I hope you come back anyway”. After paying $12 for $4 worth of food? I doubt it. Of course now, as usually happens with bad experiences, I tell everyone.  An American Express Survey in 2011 told us that Americans tell an average of 9 people about good experiences, and tell 16 (nearly two times more) people about poor experiences.

Why does one bad experience matter?

It is well know that keeping a customer is more cost effective than acquiring new ones.  On average, loyal customers are worth up to 10 times as much as their first purchase according to the White House Office of Consumer Affairs. Gaining them back is also a costly proposition.  Ruby Newell-Legner writes in “Understanding Customers” that it takes 12 positive experiences to make up for one unresolved negative experience. According to NewVoiceMedia, an estimated $41 billion is lost by U.S. companies alone each year due to poor customer service.

How can your company avoid the same mistakes when things go wrong?

1) Match the customer expectations to the delivery. Under-promise and over -deliver isn’t just cliché, it makes happy customers. If under promising is your policy, even when your company has a bad day (which will happen) you are likely to please the customer anyway, or come very close to what you told them. Example, Village Inn has a similar picture on their menu for a skillet but the amount of food you get surpasses the picture. I rarely eat half and it is the same price as the-place-that shall-not-be-named. Which restaurant do you think I will be giving my business to? “Always do more than is required of you.” – George S. Patton

2) Fix the problem. At least make an attempt to make the problem right. If potatoes are too expensive, offer some toast to fill out the meal. Ran out of an item they need? Offer alternatives with a slight discount. At least make an effort to make things right with the customer when they complain. Not every customer will be happy, but a little effort can save quite a few. Lee Resources says that 91% of unhappy customers will not willingly do business with you again and Zendesk says 39% of customers avoid vendors for 2+ years after a bad experience. “Ask your customers to be part of the solution, and don’t view them as part of the problem.” – Alan Weiss

 “News of bad customer service reaches more than twice as many ears as praise for a good service experience. The Takeaway – Take the time to address unhappy customers and do everything in your power to remedy the situation. It’s not only worth keeping their business, but also avoiding any negative word of mouth exposure.” –  White House Office of Consumer Affairs