April 10, 2003
Service can make or break a business. Of the top nine reasons consumers give for buying a specific product, eight pertain to the abilities of the customer service system, for example, responsiveness, technical skill, and professional attitude.1
Industrial customers value good service even more than retail customers do. They depend on their suppliers to deliver goods on time, just in time, so that they can meet their own customers' needs. And they can measure a supplier's substandard service in terms of lost sales and profits.
The losses resulting from poor service have a snowball effect. Late delivery of impure iron ore hinders the steelmaker's ability to supply the rolling mill, the rolling mill's ability to supply the appliance manufacturer, the manufacturer's ability to supply appliance dealers, and the dealer's ability to serve the consumer.
The following classic example of the advantage of superior service is taken from Total Customer Service: The Ultimate Weaponby William H. Davidow and Bro Uttal:
According to communications expert and author Dianna Booher, CSP, customers have more options than ever before and feel less loyalty. They want products and services fast and cheap from whomever will provide them. This means that the competitive advantage now is in a supplier's ability to keep customers and build repeat business. "Good customer service is no longer enough. It has to be superior, WOW, unexpected service, which means doing what you say you will, when you say you will, how you say you will, at the price you promised, plus a little extra tossed in to say, 'I appreciate your business.'"
In an editorial by Jayne Andrews in the "East Tennessee Business Journal," the author wrote that she recently spoke with several business owners and managers who said, "Some people are letting their customer service skills—along with their manners—slip to very low levels." Andrews suggested that possible reasons could be stress from war and the unease of the shaken economy.
She also stated that many analysts of employee performance and satisfaction report that businesses, in the rush of getting work done quickly in order to handle more sales in less time, have put an emphasis on quantity rather than quality, a kind of mindset that keeps a company from true success.
The Center for Quality Excellence (CQE), Marietta, Ga., offers seminars designed to deliver strategies for managers and empower front-line staff to provide outstanding customer service. Based on the premise that customer service is the competitive edge, the seminars stress that front-line authority means responsibility—it's more than being nice.
According to CQE, customers care most about tangibles, reliability, empathy, assurance, timeliness, credibility, courtesy, competence, security, and access.
If a business doesn't provide what a customer wants, the customer will take his or her business elsewhere. Nor will the customer go silently. On average, an unhappy customer tells 12 people about the experience. These 12 people each tell 12 more, and so on. And with the common use of the Internet and e-mail, bad news travels faster and farther than ever before.
First of all, you must have a superior product. The best serviceimplies a reliable product. Trying to provide superior service for inferior products is futile. Not only do you lose your customers anyway, you also lose valuable employees who soon grow tired and stressed from trying to support products that do not meet the customers' expectations.
Davidow and Uttal listed six closely linked elements for improving customer service:
1. Strategy– Strategy is listed first because it is the framework that organizes all the other elements of service. Successful strategies clearly segment customers by their service needs to concentrate on just a few, closely related segments. Tight focus is imperative because you can't provide great service unless your business system is optimized to the needs of certain segments.
Successful strategies also match a business's service abilities with the expectations of its target customers, modifying those expectations when necessary through price, advertising, and other tools.
2. Leadership– Leadership makes strategy an everyday reality.
Leadership matters because employees must exercise broad discretion when serving customers. Instead of rules and regulations, they have to rely on a strong service culture to guide them in making decisions, a culture that takes its tone and its values from its leaders.
It's not enough to hire people for a customer service department, have someone train them, and forget about them until your customers start to complain.
3. Personnel– Leaders must have effective followers. How employees behave is a make-or-break factor because so much customer service is delivered in face-to-face encounters between employees and customers. Companies that shine in service take pains to hire people capable of providing good service and to train and motivate them. Realizing that customer relations mirror employee relations, they invest heavily in their people and provide believable career paths. They make heroes of their front-line workers and reap the rewards of low turnover and enviably high performance.
The personal touch has become even more valuable in this high-tech age. Almost everyone has encountered the seemingly endless menu of options when calling for service. When a caller finally reaches a "real person," who may or may not be the person who can help the caller, the service usually is impersonal. One gets the impression that the service representative on the other end is meeting a quota for the number of calls handled each day rather than concentrating on taking care of the customer. Large corporations sometimes farm their service calls out to telemarketing firms whose employees may have little vested concern for the firm they are representing.
More and more people are encouraged to go online to troubleshoot problems and to set up service appointments—yet another way in which technology is supplanting the personal touch. There are positive aspects to technological advancements, but nothing works as well as the personal touch from the "right people." Having a highly skilled, personable representative call the customer to confirm an appointment or to see if his or her question was answered sufficiently can offset the impersonal aspect of high-tech solutions. Even a follow-up e-mail from a personal representative is better than no personal contact at all.
4. Design– Products and services that have not been designed from the ground up to permit easy, effective maintenance and repair destroy a company's ability to satisfy customers at a reasonable price. To avoid these problems, companies that produce great service make sure that employees who deliver service sit in on the design process from day one. They press designers to pay attention to service equivalents, such as self-diagnostic hardware and operating manuals.
5. Infrastructure– Service after the sale usually depends on infrastructures—training departments and curriculums, far-flung armies of service technicians, dispersed stocks of spare parts, and computerized banks of information about customers and products.
Though essential, infrastructures tend to be hugely expensive. The service leaders Davidrow and Uttal studied charged compensatory prices for the services their infrastructures delivered, grew their infrastructures in line with sales growth, and used advanced technology to cut infrastructure costs and improve performance.
6. Measurements– Measurements of service quality close the loop that began with strategy, showing managers how well their strategies are working and underlining weaknesses in the other elements of service.
According to Davidrow and Uttal, companies that take customer service seriously constantly assess their own performance with three types of measures:
Remember that customer service can be only as good as the product it represents and as dedicated as its leadership. Paired with the right product, superior customer service equals positive bottom-line results.
1John J. Franco, "Why Customer Service Matters," International Executive (Spring 1985), pp. 16-17.