5 Simple steps to making your business more competitive
The magic formula that successful businesses have discovered is to treat customers like guests and employees like people. –Thomas J. Peters
You’ve made the sale. Wahoo…. you’ve landed a new customer! Or have you?
Make no mistake, just because you closed the sale doesn’t mean you have a customer. You only have a customer if you retain them and they either refer you onto someone else or they buy from you again. If not, you only made a single sale.
Recently a small business owner wrote to me and asked, “How can they compete with the big boys?”
You can’t on many levels but you can when it comes to customer service. People don’t always buy on price. In fact, 50% of customers rely on the opinion of their friends. It’s all about the overall customer experience.
How a customer judges your business?
Whenever a customer has contact with any part of your business whether its over the phone, on a website or at a physical location, they are judging you.
If you have a business in a physical location, when a customer walks into your business, they instantly receive feedback based on the following for example:
- How clean is the entrance?
- How easy is it for them to find what they want?
- Did the staff greet them with a smile?
- How helpful are your staff?
- How quickly were they served?
- Did someone say thank you for their business?
If you have an online business, some things will be a little different.
- How easy was it to find you on-line?
- Did they find it easy to navigate your site?
- If they had a question, how easy was it to contact you?
- If they contacted you, did you get back to them quickly?
- How easy was the checkout process?
- How easy was the payment process?
All of these encounters with a customer gives them an impression of you and your business. They have a perception about the level of customer service they received and make a decision whether or not to do business with you again.
Think of a time when you have walked out of a place of business vowing never to go back there again and bought from someone else. You may have even paid for what you wanted. If you can provide better service than your competitors, then you have a competitive advantage.
1. Define who your customers are
Traditionally people think of a customer as anyone who pays for service. However, a “customer” is now recognized in two areas, an “internal customer” and an “external customer.” Collectively, they are called customers.
An internal customer is anyone from within your organization that you deliver a service to. For instance, an accounts person delivers a service to you – an accounting report. That makes you ‘their’ internal customer. A sales person might rely on the warehouse staff to ship goods on time. Again that’s internal customer service.
An external customer on the other hand is anyone from outside your organization you provide a service to.
To provide exceptional customer service, you need to think about your internal customers just as much as your external customers because they play a big part in delivering service to your external customers.
Look after your people they in turn will look after your customers.
2. Define who is responsible for customer service
You instinctively know what good customer service is – it’s how you want to be treated when doing business with others.
Good customer sservice is not just a single person’s responsibility, it the responsibility of everyone in your organization. You could have the most amazing relationship with your customers as a business owner or sales person, but all it takes to lose that customer is for someone else in your organization who lets them down and they go elsewhere.
Think of the business as being an orchestra. Every single musician in the orchestra contributes to the overall sound of the music. When they all play in harmony they make beautiful music. If one musician is not in tune or playing out of time, it brings everyone else down and it is the same in business.
Customer service is all about expectations.
- If a customer orders a delivery for 3:00 pm, they expect it to be delivered at 3:00 pm.
- If a customer expects a certain standard of service, their expectation is that service will be to that standard
- If a customer orders a product – then the product has to live up to what you said the product will do for them
- The customers also expect that if you “don’t” live up to their expectation, you will make it up to them in some way
Good customer service is when the customer is completely satisfied with the service you have provided regardless of who they had contact with.
3. Create a customer service charter
You cannot manage what you cannot measure.
A customer service charter defines the standards against which you measure if your people are delivering on their promises. For instance, Dominoes promise to deliver a pizza within 20 minutes guaranteed, for an extra charge of course. Other companies might promise to answer the phone within five rings or respond to an email within 12 hours or dispatch your order within 24 hours.
To ensure your people uphold the standards of your charter, they must buy into it. One of the best ways to do this is to include them in the discussion. If they are part of creating the charter, they are more likely to live up to the standards they helped define.
4. Keep your people accountable
A customer service charter is the benchmark by which you can then train and keep your people accountable. It should be reviewed every 90 days which gives you the opportunity to make adjustments along the way.
In the famous words of Henry Ford…..
Quality means doing it right when no one is looking.
Customer service isn’t always about people, it can be about process. If your people aren’t delivering on the standards as per your customer service charter, then look at the processes you have in place as well as the people. It might just be the processes not the people letting you down.
5. Conduct regular customer service surveys
You won’t always know how your customers feel about you and the service you provide. The best way to find out is ask them! Conducting regular customer satisfaction services gives you the required feedback you need to find out if you are delivering on your promises. If not why not! They go back to your customer service charter and the systems and process you have in place and make the necessary adjustments.
According to authors Emmet C. Murphy and Mark A. Murphy in their book, “Leading on the Edge of Chaos” acquiring a new customer can cost as much as five times more than satisfying and retaining current customers. A 2% increase in customer retention has the same effect as decreasing your costs by 10%.
Depending on the industry, reducing your customer defection rate by 5% can increase your profitability by 25% – $125%.
If customers are satisfied, they will return and buy from you again. Not only that, they most likely will recommend you to their friends and families. Repeat business results in greater sales and profit and also leads to more satisfied and motivated employees.
So if customer profitability tends to increase over the life of a retained customer, and 68% of customers leave because of poor customer service, then doesn’t it make sense to hire staff with a positive customer service attitude and provide good customer service?
That’s how to compete!
On a final note
When you create a customer service charter and keep your people accountable, you are far more likely to excel in servicing your customers and continue to build customer loyalty.
In a Nutshell
- Define who your internal and external customers are
- Define who is responsible for customer service
- Create a customer service charter and review it every 90 days
- Keep your people accountable and check that your systems and processes support your people
- Conduct regular customer satisfaction surveys