A guide for improving and managing the customer service department of your company:- 1. Meaning of Customer Service 2. Why Call It the Customer Service/Sales Profile ? 3. The Three Levels of Service/Sales 4. The Shape of Your Customer Service/Sales Profile 5. Managing Your Customer Service 6. Pitfalls of the Customer Service/Sales Profile.
Contents:
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Meaning of Customer Service
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Why Call It the Customer Service/Sales Profile ?
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The Three Levels of Service/Sales
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The Shape of Your Customer Service/Sales Profile
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Managing Your Customer Service
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Pitfalls of the Customer Service/Sales Profile
1. Meaning of Customer Service:
Customer service is the provision of service to customers before, during and after purchase. According to Turban (2002), “Customers service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer expectation.” Its importance varies by products, industry and customer; defective or broken merchandise can be exchanged, often only with a receipt and within a specified time frame.
Retail stores often have a desk or counter devoted to dealing with returns, exchanges and complaints, or will perform related functions at the point of sale; the perceived success of such interactions being dependent on employees “who can adjust themselves to the personality of the guest,” according to Micah Solomon quoted in Inc. Magazine.
Customer service is the service or care that a consumer receives before, during and after a purchase. It’s one of the factors that come in to play when a consumer is determining buying value, the other is the quality of the product or service that is being offered.
Consumers often must encounter an experience to not only be a satisfied customer, but a loyal customer. Customer service is a part of that experience. Top notch service will create loyalty and a returning customer, which is what we all must strive for.
Excellent customer service is vital to businesses today. It’s a component that is often missing, unfortunately. How do you provide great customer service? Always make a customer priority. Greet them in a friendly manner, whether that be via telephone, email, or in person.
Let them know you are there to help and that you will take care of them, not only before the sale but after as well. After all, in a thriving business, customers are not optional it’s a requirement for businesses to survive.
Good customer service is the lifeblood of any business. You can offer promotions and slash prices to bring in as many new customers as you want, but unless you can get some of those customers to come back, your business won’t be profitable for long.
Good customer service is all about bringing customers back and about sending them away happy – happy enough to pass positive feedback about your business along to others, who may then try the product or service you offer for themselves and in their turn become repeat customers.
If you are a good salesperson, you can sell anything to anyone once. But it will be your approach to customer service that determines whether or not you’ll ever be able to sell that person anything else. The essence of good customer service is forming a relationship with customers – a relationship that individual customer feels that he would like to pursue.
2. Why Call It the Customer Service/Sales Profile ?
We call our model the Customer Service/Sales Profile because every business activity is ultimately justified by how it serves the customer. Even if you and your team never see a cash- paying external customer, the contribution you make must have some positive impact on those external customer relationships or else you should strongly question its value and purpose. We use the phrase “Service/Sales” to remind us of three important truths.
1. Sales do not equal relationships:
Way back in 1983, Theodore Levitt wrote an article for the Harvard Business Review titled “After the Sale Is Over.” In it he explained that the sale is just the beginning of the relationship with your customer—a relationship more akin to a marriage than to a one-night stand. And consultants, practitioners, researchers, and authors have been building on this theme ever since. Yes, the sale is a very important point in customer relationships. However, it is bracketed by the quality of service you are willing to offer, able to deliver, and credited with providing to your customers.
2. Service extends beyond the buyer:
Whether you’re selling in-home plumbing repair or pacemakers or e-business solutions, creating a customer relationship, maintaining that customer relationship, and extending the opportunities you have to do business together mean more than wooing the individual who writes the check or signs the contract. You need to consider all the people who touch or who are touched by your product or service.
3. Service and sales are on the same team:
All too often, we are called into sales organizations or customer service departments that claim that everything would be better if “those other people” in service or sales “would just straighten up and get their act together.” The sales people lament that the customer service people just complain, complain, and complain about pesky details like a few.
Over-promises or a couple of tight delivery deadlines. “Don’t they know that we’ve got to promise those things to get the sale?” The customer service people roll their eyes at visions of golf club- swinging sales types teeing off with unrealistic promises and assurances that “the customer service team will be happy to move mountains for you.” “Don’t they know we have policies? If we did that for this customer, we’d have to make the same exception for every customer.” The truth is that to win the game of business, sales and service have to be playing on the same team. The phrase Service/Sales can serve as a reminder for both groups that you win only when you work together.
3. The Three Levels of Service/Sales:
There are three service/sales levels to the Customer Service/ Sales Profile model (Figure 1):
Level 1 is initial transactions. At this level you are focused on discrete, initial interactions or stand-alone sales. This is the foundation for every business or organization. Yet, we know that the more money, time, and energy you must invest in getting customers to come to you in the first place, the harder it is to be profitable just working at this level. As we know it’s not unusual for customers to actually cost you money the first time they do business with you. Just consider the acquisition costs for your customers (Figure 1.2).
As you can see, in order for our Nature Retreat Center to be profitable at Level 1, they need to:
i. Identify customers at risk of leaving, never to return, and find out how they can woo them back.
ii. Look for ways to teach new customers more about what the Nature Retreat Center offers and how it works so that there are fewer avoidable service issues.
iii. Give staff tools and training on ways to turn their interactions into revenue-generating opportunities while at the same time making guests feel well served. It will be important for the Nature Retreat Center to focus on these improvements. When initial transactions run smoothly, with a minimum of fuss or error, it provides a strong foundation for future business. Level 2 represents repeat customers.
At this level you’re focused on getting customers to return for a second, third, or fourth time. Customers may come back for the same purchase—like the loyal Caribou Coffee customer, cordially known by the staff as the “extra-large, skim latte with Caribou cookie.”
Or the customer may turn to you for a variety of products and services— like a car insurance customer who comes back to her agent for homeowner’s, disability, and life insurance. Repeat customers develop greater economic and emotional ties with you. And they bring with them an expectation that you will value those ties. For example, the Caribou Coffee customer may expect you to save the last Caribou cookie for him. And the insurance customer will look for a discount for having car, home, and life insurance with the same provider.
Your CRM strategy will tell your team how much importance to place on repeat customers. CRM tools will help your team identify these precious members of your customer mix and prompt team members to notice and value their extended relationship with you. The top level of the model is customer advocates. Level 3 represents those customers who are not just satisfied and willing to do business with you again.
These customers actively tell others about their positive experience. They spread the good word. You might even consider them to be active participants on your marketing team. As you can see, each level builds upon the level before.
Without quality initial transactions, customers won’t want to do business with you again. And it’s the customer who sees himself for herself in a positive relationship with you who can provide the strongest advocacy for you and your products and services.
4. The Shape of Your Customer Service/Sales Profile:
The shape of your Customer Service/Sales Profile reflects the relationship among these three levels. It is driven by the nature of the product or service you offer, the expectations of your customer base, and the forces of market competition. There are three basic Customer Service/Sales Profiles – the Pyramid, the Hourglass, and the Hexagon.
(i) The pyramid profile:
The Pyramid (Figure 1.3) is the conventional way to see the relationship among the three levels. It applies to the majority of businesses. Consider a retail department store, such as Minneapolis based Target Stores. Each day hundreds of customers walk through the doors of any one Target location. Still more customers shop online at Target.com. Those customers represent the base level of initial transactions.
The percentage of those customers who are loyal to Target, who regularly seek Target in preference to its competitors, make up level 2. At the top are those customers who actively send their friends, family members, and even business associates to Target. They tell positive stories about staff and service.
As you might imagine, not every pyramid looks like a perfect isosceles triangle. For example, in some business models, there’s a very strong emphasis on repeat customers but less on customer advocates. As one salesperson for a large-scale computer application told us, “Yes, I think my customers are happy enough to keep doing business with me. And I’m working very hard to keep them happy But, no, I wouldn’t want to put my existing customers in a room with my prospects.’If you don’t trust your repeat customers to help you “sell” a prospect, then you have pyramid with a broad middle and a small top.
It might be tempting to tell this sales professional to go out and create more advocates. And that would be a dangerous shift if it meant losing focus on the repeat customer group. In a Pyramid Profile, customer advocates grow directly out of exceptionally well- satisfied repeat customers.
(ii) The hourglass profile:
The Hourglass Profile (Figure 1.4) is less common. In the Hourglass, you have a broad base of initial transactions, only a few of which become repeat customers. However, you seek to the Hourglass Profile is appropriate when the buying cycle is long or when your product or service is a one-time purchase create customer advocates from as many of those initial transactions as possible.
Consider the relationships between a real-estate agent and her customers. Diane, an agent in the business for over 15 years, explains that she sometimes gets a second sale, but rarely a third from most of her customers. “I get a second sale when the initial house is their ‘starter home.’
After two or five years, they are ready to move up. Many of my clients are selling because they are moving out of the area. I don’t get a second chance with them. “Yet Diane’s business is booming. Her company has recognized her as a top performer for several years in a row. “I think my secret is really no secret. My clients are my biggest sales force. They are on stantly recommending me to people they know who are buying or selling a home.”
An Hourglass is most stable when it has a strong base of initial transactions and those transactions are handled in such a superior way that customers are eager to tell others about their experience. When this happens, the Profile creates its own self-renewing energy.
Diane, for example, does put considerable time and effort into maintaining contact with past clients, ending them calendars and other reminders, and keeping her name and phone number easily accessible so clients who have an inclination to recommend her will find it easy to do so. But Diane is the first to admit that this process works with more ease and flow than in the early years of her business, when she was less sure of herself and less sure about satisfying her clients.
(iii) The hexagon profile:
In the Hexagon Profile describes a business that is very stable. It has all the repeat business it can handle or wants, so it feels little motivation to actively seek for Level 3, customer advocates. It also feels no strong motivation to focus on initial transactions, since there are already plenty of repeat customers.
Seemingly stable, the Hexagon Profile is actually very vulnerable, lacking a strong base of initial transactions for the moment. This is a vulnerable profile. Should anything disrupt the core of repeat customers, the business will be hard pressed to replace them.
The Hexagon Profile can self-destruct when supply and demand are no longer in balance and no longer working in your favor. We watched a small advertising agency go under because it was operating under this profile. Secure with its three major clients and a steady mix of small “filler” jobs, the team focus don doing the work.
They paid little attention to growing their “filler” jobs into something more, or to getting their name out to encourage new clients, or even to inviting their current clients to recommend them. When first one and then two of the core clients moved their business, the team couldn’t replace them quickly enough to stay viable.
“I haven’t done marketing in so long, I don’t know where to begin,” one owner sighed. How much easier it would have been if they’d asked for letters of recommendation and referrals months before, when their core customers were active and satisfied.
5. Managing Your Customer Service:
Managing initial or stand-alone transactions:
Level 1 is where customer relationships are born. Think of these transactions as auditions. Customers use this contact to form impressions, to make evaluations, and to decide whether or not to do business with you again or speak well of you to others. There are three keys to managing initial or stand-alone transactions for success.
1. Make Systems Simple:
The more obvious and intuitive your processes and procedures are for both customers and employees, the easier it will be to create a superior service experience. This is as true for traditional bricks-and-mortar retail stores as it is for innovative Internet applications.
2. Feng Shui the Experience:
The transaction should progress in away that feels natural for both customers and employees. Each step should flow easily from the step before, answering these three questions is a good way to start:
How can you make it easier for customers to get to you?
Think about where customers might search for you, such as through online or printed directories, your location, the signage that tells them they’ve arrived at your location, and the physical process of entering. For example, a slow- loading Web site and a heavy door atop along flight of stairs could discourage customers from pursuing initial transactions. How can you streamline the process of doing business? We noted with interest the recent recommendation that McDonald’s offer fewer menu choices.
The fast-food giant was a pioneer with combo meals that made customer ordering easier. Unfortunately, that evolved into confusion as McDonald’s sought to offer more and more possibilities .How can you make the service environment friendlier and more inviting? Look with fresh eyes at your service environment. It could be the retail sales floor, your online support site, or the way the service representative looks and acts when onsite with a client. Consider use of space, color, and light. Sit in
Poinsettias in March:
When you’re in an environment every day, it’s easy to lose awareness. You no longer notice it—until someone or something brings it to your attention. Kristin recalls making this point at a hospital in the Midwest. She was interrupted when a woman near the back of the room let out a loud “Oh, my gosh” and started laughing. ‘I just got it,” she explained. “This morning I came here through the front door, not the employee door, because I wanted to see my mom who just had surgery.
It’s March and there are two dead poinsettias in the entryway, left over from the holidays. I didn’t realize until just now—we ask patients to trust us with their lives when we can’t even notice when a plant is dead.” Look around your service environment with the eyes of a customer and you too may be amazed at what you see. the furniture. Stand in line. Log on. Experience it the way your customers do.
3. Capture the Opportunity:
Every Level 1 transaction is a customer who may move to Level 2 or 3. You need to capture information that will allow you to invite this customer back for another visit. Without a focus on capturing the opportunity, employees may begin to see customers as replaceable: when one goes away, another comes to fill the space. It’s always dangerous to take customers for granted.
Managing for repeat business:
Level 2 of the profile represents repeat business. This is where most organizations make their greatest profit. If you manage an internal service group or a non-profit organization, this is where you will, traditionally, prove the most value to your stakeholders.
It’s helpful to look at managing repeat business from two perspectives. The first is individual customers who make multiple purchases with you over time. This could describe a financial services client purchasing stocks, bonds, and other investment vehicles. Or a loyal retail customer. Or even an employee who turns to technical support for training, problem solving, and new equipment installation.
1. Track the Relationship:
Ideally, your CRM database tool should allow you to capture the history of each customer so that you can evaluate and predict purchase and use patterns. Where that’s not possible or available, you can still create typical customer use profiles based on customer type and segment.
2. Allow for Variation:
Customers want to be catered to. They seldom believe that one size fits all. So create ways for customers to have the experience of customizing. Alvin Toffler wrote about declassification as the shift away from the “one size fits all” attitude epitomized in the comment by Henry Ford, “The consumer can have any color he wants, so long as it’s black.”
You can create controlled demassification for your customers. Today’s car buyers can have any color they want … from the palette of colors offered. Where can you give your customers scope to shape their own service experience?
3. Look for Opportunities to Expand the Relationship:
Amazon now sells just about everything, including, of course, books. Our favorite Minneapolis restaurant, Tejas, offers its signatures alsa by the jar. At Canyon of the Eagles Nature Park Not Just Products, but Services Staples.com is more than just office supplies. Customers visiting the site will find that “Great service every day in every way!” also means business services, including an “Ask the Experts” site.
It’s a great way for taples to keep customers coming back to its site and into its stores and Lodge, they’ll recommend a hiking trail and pack you a lunch. What else might your repeat customers want or need? Could it make sense for you to provide it? The second perspective for looking at repeat business is that of individuals and organizations with multiple buying relationships. For example, a bank customer may have checking, savings, and investment accounts as well as a line of credit. Or several or many departments in a corporation may have buying relationships with the same office supply store.
4. Connect the Relationships:
A customer with multiple relationships not only represents a greater economic value to you, but also brings additional expectations and assumptions. When your CRM tools capture and connect the relationships, you help your service providers meet the customer’s needs and expectations. For example, a corporation may expect and negotiate a volume discount on office supplies based on total purchases across departments, even though some individual departments buy only a few items.
5. Don’t Hold One Relationship Hostage to Another:
This is often an accounts payable/credit issue. What passed for CRM in not too distant days was often a revised version of the accounting database, since this was often the largest and most accurate source of customer information. However, it was designed to collect money or assess the risk of not collecting money. And it was very conservative in its assessments. We’ve heard more than one horror story where an overdue bill for some small amount from one small department caused the system to change all deliveries to COD—or worse, putting the entire customer relationship at risk.
6. Calculate the Total Value of the Customer:
It’s helpful for employees to know the economic value of customers with multiple relationships. You can use real numbers from real customers or you can create value models for typical customers within a segment.
Managing for customer advocacy:
Level 3 customer transactions are the most elusive. Yes, you can identify customers who are willing to recommend you or who have done so. But you can’t make customers advocate on your behalf… or can you? No, you can’t make them do it. However, you can nurture and encourage them—with powerful results.
1. Know What’s Worth Talking About:
Customer advocates believe your services and products are worth talking about. So, you need to listen to them to find out what they’ resaying. Discover what features, what benefits, what aspects of the experience they recount when they recommend you. They may not be the same things you thought most important or most impressive.
2. Changes worth Talking About:
You don’t keep customer advocates by doing the same old thing. What was impressive yesterday is ho-hum today. Carol still recalls the first time she visited her health care clinic and didn’t need to present her insurance card — it was all in the computer, printed out and waiting for her. Now she just expects that.
3. Prompt Advocates to Share Their Recommendations:
Many advocates are willing to recommend you but don’t find themselves in conversation with the right people. You can get powerful results just by asking for their recommendations. Here are a few ideas: Ask satisfied customers for referrals. We know, we know: you covered this in your Sales 101 class. So, do you make a practice of doing it? It remains an excellent way to build your client base Collect and distribute customer testimonials. In your literature, on your Website, posted on your walls — wherever others may see it.
Give customers anything—from matches to coffee cups to crystal vases —with your name and contact information. This way your name is easily within reach when the opportunity rises for a customer to recommend you. Recognize customers who recommend you. At The Sleep
Number Store, sales associates ask customers if they know anyone who owns a Select Comfort bed. The associate takes down the name. If the customer buys a bed, the associate searches for the friend in the database and has a thank- you sent out. “I got a cheque for $ 50,” a friend told us. “You bet I’m going to recommend them again. And I love my bed. Have you tried Select Comfort? You really should ….”
6. Pitfalls of the Customer Service/Sales Profile:
There are two common pitfalls that cause individuals and departments to become misaligned around their Customer Service/Sales Profile.
(i) Focusing on the top:
It’s personally and professionally satisfying to have customer advocates. Human nature yearns for that positive affirmation. Beware of taking their praise so much to heart that you begin to think that anyone who isn’t an advocate is just too picky and hard to please.
(ii) Focusing on the front door:
Initial transactions are critical, but they’re only one step in the customer relationship. When a rush of activity comes … and especially when it stays … it’s easy to get caught up in processing customers through faster and faster—”Don’t worry if it’s not perfect, someone else is waiting to be served!” Yet, when the rush is over and you’re waiting in vain for the next new customer, all those initial transactions will be looking for someone else, someone more service-oriented, for their next transaction.
CRM and Your Profile:
So, what’s your Customer Service/Sales Profile? Are you operating as a Pyramid? As an Hourglass? Or as hexagon? It’s important to know what kind of customer relationships you’ve been creating so that you can be thoughtful and strategic in choosing what kind of customer relationships you want to create from this point forward.
What works about your current profile? And what would you like to change? The answers to these questions will help to shape your CRM strategy. You will find that it’s easier to align your team—and your organization —around a clear and consistent CRM strategy if you all share a common vision of your Customer Service/Sales Profile.