Most businesses lose around 10 to 30 per cent of their customers per year, for which bad customer service accounts for 68 per cent.
This means if you have 100 customers you could lose 20 customers every year due to bad customer service (even if you don’t agree it’s bad!)
These ex-customers will each tell 8-16 people about their bad experience, which means up to 320 people could be thinking bad things about you. And all because you didn’t know your clients were unhappy.
However, if your customers are able to tell you they’re not happy, and you act on this feedback swiftly, you could retain 95 per cent of them — or 19 out of 20.
And this 19 will be so happy they’ll each tell 4–6 people. So you’ll have 114 people thinking brilliant things about your business. And all because you were able to capture and act on customer feedback.
The old adage — “the customer is king” — came from a time when companies aimed to provide great customer service for their clientele. Great service was literally about serving customers. In other words, service was something done to a customer.
One of the consequences of the World Wide Web is that customer service has been commoditised. For example, Amazon provides outstanding customer service, whereby packages can be tracked, speed of delivery can be chosen, and it is all completely automated. Companies used to try and differentiate themselves by the quality of their customer service, but in this environment that becomes almost impossible.
Customers are no longer attracted to, or retained by, companies, due to the service they deliver. Rather, in order to become “sticky” or attractive to customers, companies now have to concentrate on the experience they provide. While a service is done to a customer, an experience is done with a customer. So, while Amazon delivers great service, it also provides an experience by allowing customers to write and, therefore, share reviews and opinions about particular books. For Amazon, the customer is no longer “king” but a partner helping them deliver great experiences for others.
The web is teaching us to no longer be passive receivers of goods and information, but rather, to be active participants. Websites require us to click, state a preference or provide a comment. This is seeping into all aspects of our lives.
For example, the biggest shows on TV today are reality programmes like The X Factor, Britain’s or America’s Got Talent and I’m a Celebrity Get Me Out Of Here, etc. What these shows have in common is that they are no longer just passive viewing. It is the audience who decides the outcome. In other words, they are no longer simply entertainment shows for us to watch but, rather, vehicles in which the viewer becomes involved.
Herein is the point. Consumers today are empowered. They have a plethora of ways to talk directly to companies. Moreover, through social media platforms such as Facebook, YouTube, Twitter and Linkedin, or forums and blogs, and sites such as Trip Advisor, consumers can now influence the purchasing decisions of people whom they have never even met.
What used to be most important for companies was the image they conveyed. Millions of pounds would be spent by big firms, whose agencies would try and create irresistible messages. Consumers had little right of reply. Now, through the web, customers have an outlet and are literally producing millions of messages about companies every day. It is now less important what a company says about themselves and far more relevant what others say about them. Brand has gone from “image created” to “reputation earned”.
Brands were created in creative agencies, but reputations are earned through delivering great experiences. Today, even delivering a good service can still leave a customer cold. However, providing an experience, whereby a customer is involved, is always emotional because a customer is giving something of themselves. This involvement makes it more likely that a customer will talk about you and spread the word. This will not only enhance your company’s reputation, but will help to deliver referrals into your business by creating positive word of mouth in the marketplace.
1. Focus on the customer and provide world-class customer service. Understand their wants, needs and desires — build your business to deliver these.
2. Establish your brand and values. Build a brand that has the basic values to achieve what the customer requires and clearly defines your business and its way of operating.
3. Establish a customer-focused culture. Build a team that lives and breathes your values, making world-class customer service the heart of every team and successfully growing your business.
4. Make sure quality is in everything you do. Make sure that everything you do is done to the best ability of you and your teams – always strive to give the best service every day with every person you interact with.
5. Reward and incentivise to develop a motivated and happy team. A motivated and happy team will lead to happy customers, which leads to success — listen to and look after your team.
6. Manage your cash. Cash is sanity and profit is vanity, a business will go bankrupt due to lack of cash, not lack of profit. Understand where your money comes from and where it goes.
7. Develop and communicate a clear vision, strategies and plans. Know what you are trying to achieve and have a plan to get there. Share the vision, strategies and plans with all your teams and partners.
8. Make your customers the heart of every team and make them feel special. Happy and satisfied customers are loyal and keep you successfully retailing.
9. Retail is detail. Get the details right for the customer and look after the detail — understand what is happening and make sure you dot the i’s and cross the t’s.
10. It’s not rocket science. Retail is one of the oldest forms of business — we buy a product and sell it on to the end consumer with a margin; make sure that your margin delivers a profit.
11. Make decisions – just do it. Do not procrastinate: analyse the information, make decisions and give it a go — if it doesn’t work, try another way.
12. Manage with facts and information. Use the data and information you have in your business. Keep your emotions in check and make decisions based on solid information, analysis and research.
13. Don’t forget to sell your products and your business. After all we are in the retail business to sell products to customers — that is the reason they visit your stores and what they require from your business.
14. Be yourself and enjoy. This is your journey to achieving your potential in retail — make sure you take pleasure in it.
Antony Welfare is the director and founder of Retail Inspector Ltd and is the author of The Retail Inspector’s Handbook.
OK, so you know that improving customer service is the best way to improve retention, drive referral and grow your brand. And you’re now ready to take an active step to improve how you look after your customers. But where do you start? Here are a few tips to help you achieve customer satisfaction.
Your customers may not have specific feedback when you ask for it, but if you leave the door open for comments you’re more likely to get a higher quality and a greater quantity of feedback.
Everyone in the organisation has an effect on what your customers say about you. So they deserve to know what customers say and understand how they can improve as individuals and as a team.
Using the words that the customer has actually said has a huge impact on those listening, because you get a real feel of who the customer is and why they said what they did; making it easier to respond effectively.
Customers expect you to respond to what they have said. Customers who have their problems resolved will tell four to six people about their positive experience. Your actions may range from simply saying “thank you”, to making actual changes to your product and service.
Now that you’ve taken action on feedback, you should tell customers what you have done and how it affects them. After all, you’ve taken a step to improve; which is really good news that a lot of your customers will want to hear about.
Eighty per cent of complaints received by an organisation are likely to have poor communication as their root cause. Your customer may have only left a simple bit of feedback but it’s an opportunity to bounce ideas off them and ask them about any areas for improvement.
Give them just a few quick questions to answer and maybe a comment box if they have something specific to add. This way you’re likely to get more responses, and customers will take more time over each answer, giving you better feedback.
If you have one central place to hold feedback it makes it easier to follow-up with customers and spot patterns in customer comments. For example, if you can see lots of comments on one particular problem you can quickly see how it has affected customer satisfaction.
You can tell how well your feedback system is working through recording the number of people feeding back, any common issues, how much of it is negative/ positive, and what actions have been taken as a result of feedback.
Feedback without a name is no less valid or valuable, so why force them to provide this information? This can influence their decision to give feedback and can affect their opinion of the company as well.
Kerry Morrow is Marketing Executive at Customer Sure which offers customer service software, including a free 30-day trial.
It was every mother’s nightmare. A call at 4am to say that our gap year daughter was seriously ill in some far flung foreign corner. There followed a confusing series of calls, or rather failed calls, from me to our daughter’s extremely capable travelling companion, during which I tried to follow their progress from rural Laos to Vientiane airport and then on to a hospital in Bangkok.
Having established just how ill the poor girl was, we booked a flight to Bangkok the following evening for me to join her. However, during a subsequent call to the hospital, I learned that her temperature had reached 43 degrees, and having worked that back into a more understandable, and terrifying, Fahrenheit reading, I decided not to wait 24 hours, but leave immediately.
But BA was not designed with frantic mothers in mind. I went onto their website, but having made my request, a message popped up telling me that I could not change my flight online less than 24 hours in advance.
So I called the customer services number provided on the website. As with so many call centres, you are politely told to press ‘one’ for this service, ‘two’ for that, and so on, and then that selection leads to further choices. Eventually I arrived at the final stage, only to hear another air-hostess voice informing me that, owing to unprecedented demand, they were unable to answer my call, and would I like to refer to their website? Aargh!
In such circumstances, patience is in thin supply. I dialled the number several times, always with the same result. I never got through. What is a passenger to do? Surely I won’t have been the first person ever to want to book or change a flight only a few hours ahead of the departure time? If the website cannot cope with same-day changes, why don’t they have a dedicated line (‘press nine for immediate departures’) to avoid this problem? I can (almost) excuse inadequate manning of phones for low value consumer goods, but for an expensive flight, where time is likely to be key, surely they could do a bit better?
For the record, I did manage to change my flight and I did get to Bangkok, and our daughter is now fully recovered. But another time I would like to find an airline that relieves rather than compounds the stress. Or maybe I’ll just forbid gap year roaming.
Alison Knocker is Operations Director at BHP Information Solutions, publisher of the Donuts.
Are your customer systems helping or hindering? What's your advice for keeping it personal?
Sorry, we are not prepared to serve you...
Not something you hear often at the moment. But it’s coming.
Several things struck me recently and they were all brought about by the magnificent example of the Massachusetts sisters, as reported by Helen Edwards at Passionbrand earlier this year. In essence, two sisters had returned an “incredible amount of items” through the store’s generous returns policy. The company, Value City Department Stores, simply could not afford to deal with them anymore, so the retailer drew the relationship to an end. “Given your history of excessive returns and chronic unhappiness with our service we have decided that this is the best way of avoiding any further problems with you.”
Now this is unusual, but for how much longer?
When you consider most aspects of our lives, we need a lot of good behaviour to get by. If I misbehave on an aeroplane then the airlines share information on me and I won’t be able to fly. If I can’t get car insurance I can’t drive, as insurers share information. Want a mortgage? You’d better hope your credit score is good, they’ll look. Renting: well, landlords now have a site where “problem” tenants are logged. How long will it be before someone sets up an “individual human behavioural log monitor thing”? All of our past misdemeanours, late payments and broken promises, all in one place. Ouch.
But for the most part at the moment, the customer is still king. And when companies get things wrong, they find their failures will be plastered over social media sites. Not good.
So why would a brand want to divorce a customer? Some things are obvious. If the company was, frankly, being taken for a ride – such as in the case of the sisters – then it makes perfect sense to cut its losses.
But protecting brand value in the longer term is also a motivator. After all, look at what it has cost Burberry in time and money to reposition the brand and shake off the chavs and football hooligans who’d ruined its premium image. Right now Cyprus is attempting to reposition itself as an upmarket family resort, playing down the Ayia Napa image of a party capital. You could argue both Cyprus and Burberry have taken action to “divorce” customers who threaten future brand value. It has certainly paid off for Burberry.
So which customers will be refused service next? I believe it’s not a long way off when serial “unfair” complainers and bloggers will find themselves with fewer and fewer choices of product and service. And if they do find someone who will “take them and their custom” they will pay a big premium. Financial Services already has this one covered! Big APRs for customers with poor credit histories.
So that’s my point. Many companies really are offering great service and value, and are really on top of customer relationships. I think, as customers, we all need to start considering how we deal with our selected favourite suppliers and companies. We really do need to start to value them more.
It will not be long before our track record is scrutinised in huge detail, and yes, we may get the call that says our custom is not wanted. How’s that going to feel?
Read more about problem customers in our article on An Awkward Customer.