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Customer Service Matters Much More Than You May Think

Posted By Ivan Widjaya On February 27, 2014 @ 1:00 pm In Retail Trends | 32 Comments

customer service matters

Customer service is a big “elephant in the room” for so many businesses out there. It’s really not easy to train yourself or your employees with the virtues required to be a well-rounded, service-minded personality – a person with all the necessary attributes to make patrons to your business happy each and every time.

Learn From the Baby Boomers…

One thing that’s caught a lot of young entrepreneurs off-guard as they’ve built their business is the fact that there’s an aged segment of customers out there (baby-boomers) who care just as much about the customer service experience they receive, as they do the quality of the product you’re selling them.

Scott Hume, Editor at BurgerBusiness, says [1]:

“Baby boomers, guys like me, really value good service and a good experience.”

Gen Y and Gen Z individuals often don’t have the same expectations. To them, the concept of chivalry is a foreign one, and they’ve learned not to expect too much, particularly with regard to value-added-service.

Does that mean if your business sells more to one and not so much (or at all) to the other, that you should develop customer service practices that suit that specific demographic? Absolutely not. Even if your target demo doesn’t expect much of you, they’re ten times more likely to come back and do business with you next time, if they have a decent experience.

This is a universal reality across all businesses, regardless if you sell tangible or intangible products.

Poorly Misunderstood Benefits From Providing Top-Notch Customer Service

1. Getting it Right the First Time Generates More Profits

Poor service can be about how the order system functions, how the sales staff treats prospects, how you develop and then satisfy consumer expectations of your product/service, or simply the overall perception they’re left with after doing business with you (i.e. did they feel treated fairly or rudely).

What does this have to do with saving money, you ask?

Poor service = Poor quality = Poor Profits

It’s all about reworking. Every time you have to rework something it costs you money. If the customer feels like they were deceived, treated rudely, or any of their expectations weren’t met, it’s likely they’ll demand a refund, a redo, or a freebie – if you’re lucky. They may simply not come back and certainly won’t recommend you. One time sales rarely a rich man make.

Every rework costs you money, unless the customer’s the type to only give you one chance. Then you just lost a repeat customer and the word-of-mouth marketing they could have provided you. Indeed, poor service quality directly affects [2] your bottom line.

2. When They Come Back and Bring Others With Them, You Make More Money

In most businesses, return customers and word-of-mouth are what will make you successful. Using the burger analogy, let’s run with a fictional customer service scenario about two different burger joints:

Exhibit A: The first burger place (Let’s call it “McGurdy’s”). Customers are greeted with a smile and the staff is taught to take their time answering any and all questions the customer might have. Each staff member is paid above minimum wage and the atmosphere is one of teamwork and positivity.

The burgers aren’t going to be featured on Gordon Ramsay’s signature menu at Caesar’s Palace, but the health standards are excellent, the service impeccable, and the food is on par with other fast food joints.

Exhibit B: The next burger place (“The Burger Pit”) makes the best burger mankind has ever tasted. This little shop is run under the thumb of one man; a surly old fella who screams orders at his staff, who get paid the minimum pay allowed by law.

The customer service staff jumps every time the old fella yells, often interrupting the customer service flow and interaction. The old man screams at staff for “talking to customers for too long” and tells customers who complain to leave his store and never return. The health standards are impeccable under the iron rule of the old fella, service is slow and disjointed, and the burgers are a fantastic experience to say the least.

Which would you choose? Naturally, customers will choose the best burger on the planet, no? After all, the quality of the product should dictate popularity. But it doesn’t.

Customers want to feel respected and listened to. Very few return customers would go to the Burger Pit over McGurdy’s because going to get the best burger means their patience is likely to be tried to the extreme, and they might have a downright unpleasant experience. The majority will go [3] where the combination of product quality and service are best (a “happy medium” in the absence of a business that truly has all elements of their product and service covered.)

3. Staff Turnover Will Burn a Hole in Your Pocket

Franchise businesses understand this concept very well, yet they deal with more turnover costs than most small businesses make in a year. The small business owner has to learn this lesson the hard way, often letting ego get in the way of good judgement. The “take it or leave it” approach to staff management will eat a hole in your profits every time.

You’re probably wondering: How the heck did we get here? What does this have to do with good customer service and how poor service can cost me loads of cash?

Most employees, including front-line service employees, want to take pride in what they do. Also, every one of those employees is, and will again be, a customer at some point in their life.

Question: So they’re not happy because you don’t care about the service level – what are they going to do?

Answer: They’ll be less passionate about their job, making the customer’s experience even worse. Eventually, they’ll quit. Creating a positive, customer-focused environment is key. If your service levels are up to par, the majority of new hires will stick around longer-term, even if you’re in a high turnover industry like fast food.

How much money does turnover cost your business?

A lot more than most inexperienced managers and business owners think. Most employees are worth at least a couple of thousand [4] (just in paperwork and training costs) after their first few days on the job.

Customer service matters – much more than you may think.

Customer Service [5] Photo via Shutterstock


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URL to article: http://smallbiztrends.com/2014/02/customer-service-matters.html

URLs in this post:

[1] says: http://www.forbes.com/sites/jjcolao/2011/11/30/meet-americas-most-promising-company-smashburger/2/

[2] directly affects: http://asq.org/learn-about-quality/cost-of-quality/overview/overview.html

[3] majority will go: http://www.microsoft.com/business/en-us/resources/management/customer-relations/how-to-get-repeat-customers-7-steps.aspx

[4] couple of thousand: http://www.inc.com/suzanne-lucas/why-employee-turnover-is-so-costly.html

[5] Customer Service: http://www.shutterstock.com/pic-118095175/stock-photo-man-holding-several-pizza-boxes-in-hand-and-asking-you-to-order-pizza-for-delivery.html