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How to Improve Customer Service in Your Business & Make It Great

By Michael Lewis

customer satisfactionWhen was the last time you enjoyed a truly superb shopping experience? According to research, less than 10% of consumers are satisfied with the customer service they receive, whether purchasing a new television or staying in a luxury hotel.

Access to worldwide products, improved logistics, new technologies, and similar business philosophies and strategies have created a standardized, homogenized marketplace in consumers’ minds. While the rewards of being an industry leader are great, the risks of a wrong decision can be disastrous. As a consequence, few in management are willing to “think outside the box” or try new approaches to create a robust link between themselves and their customers. The result is a lack of differentiation that creates an environment where consumers are indifferent about the companies from whom they buy goods and services, viewing each as offering similar, if not identical, benefits as the others.

At the same time, market and consumer surveys have consistently shown that those people who have a superior customer experience are more likely to return to the same supplier for additional purchases. Furthermore, they are less likely to consider the appeal of competitive sources, and have a high likelihood of recommending the business to their friends and colleagues. The resulting benefits – additional revenues, less marketing and sales costs, stronger competitive position – are available to every business owner without substantial cost, lengthy implementation, or extraordinary management skills.

Do You Know Your Customers’ Expectations?

Even though research indicates that only 8% of customers believe they had a “superior experience” with their purchases, 80% of the companies queried believe they deliver exceptional service to their customers. This disconnect illustrates the difficulty of making real change in the customer/business relationship.

If you don’t know the reasons your customers buy your products or service, it is virtually impossible to improve their experiences in any meaningful way. For example, the largest retailer in the world, Walmart, is renowned for its low prices and product selection. Yet, how many times have you heard someone recommend Walmart to their friends? Their failure to deliver a superb customer experience stems from either an inability to understand the importance of customer service, or a hubris that their low prices outweigh any customer dissatisfaction.

offer exceptional service

What Influences Customer Experience?

Winning in the marketplace requires that you continuously and consistently meet and exceed your prospective customers’ expectations each and every time they come into contact with your business regarding:

  • The products you carry
  • The services you offer
  • The design and appearance of your facilities
  • The appearance and content of signage, advertising, and promotion literature
  • The appearance and conduct of your employees
  • The quality and pricing of your products or services
  • Warranty issues, complaint resolutions, and other communications

Failure to review every point of contact and deliver a consistent message across the company can lead to a poor bottom line.

Restaurants in every community have failed due to the appearance of their bathrooms or the sanitation in their kitchens, not the cost or taste of their food. Similarly, long lines to check-out or an inventory shortage can ruin an otherwise positive shopping experience. A poorly designed website or telephone system can be so irritating that some prospective buyers never make a second attempt at communication.

How Are Customer Expectations Set?

All experiences are the combination of conscious and subconscious perceptions, which collectively create a set of expectations for similar events in the future. The quality of an experience – bad, neutral, good, or excellent – is determined by a comparison of the most recent experience with those expectations.

1. Collective Consumer Experience

Historical experiences with vendors and businesses have improved. Therefore, the set of expectations of the consumer has grown more demanding.

For example, travelers prior to 1953 depended upon independent roadside motels and boarding houses for lodging during overnight trips. Accommodations varied greatly from one motel to another, and often included dirty linen, bedbugs, and unclean facilities. Wary consumers, expecting the worst, would inspect each room before agreeing to pay the rental fee to spend the night. As a consequence of the low expectations for motel rooms in general, a motel owner with clean linen had an advantage over his less fastidious competitors.

2. Innovation

The introduction and growth of the Holiday Inn chain of motels changed travelers’ expectations for all time. Tourists began to expect comfortable, sanitary, attractive accommodations from every hotel or motel owner; providing such was no longer a competitive advantage, but a competitive necessity.

The customer experience of finding and renting overnight accommodations continued to improve over the years with the additions of swimming pools, dining areas, and nationwide reservations. Each of these elements, once considered a luxury, have become standard in the lodging industry, and no longer guarantee an exceptional customer experience.

do you customers give you high marks?

Meeting or Beating Your Customers’ Expectations

Delivering a superior customer experience requires that you first know the standard perceptions of the services being offered by your competitors. What is extraordinary and what is not?

Even though the bar will be continually raised in the future, particularly in those industries which are rapidly expanding into new markets with consistent year-to-year unit growth, you must first establish a target set of customer experience measures which you intend to achieve. You cannot compete successfully against any competitors unless you can meet and exceed the prospective customer’s expectations based upon his or her current experiences.

Your Employees’ Role in a Customer Experience

While it is a management clich√© to state that “employees are our most important asset,” the statement is true in assessing the outcome of a customer’s experience with the company.

Company employees reside in the crucible of customer contact, with measurable consequences depending on their success or failure. They are often the first and only contact with prospective, current, or disgruntled customers, and interactions are frequently colored by misconceptions, skepticism, disappointment, and even anger.

The future of the consumer/company relationship often rests upon numerous facets of the employee’s behavior:

  • The Employee’s Willingness to Become Involved. Poorly motivated employees, employees who are not committed to the company’s success, and employees who don’t understand their role in delivering a superior customer experience will rarely interact successfully with customers. Taking the time to explain to employees why the customer’s impressions are important and how they affect the financial success of your business – especially how superb experiences create the opportunity for higher salaries and benefits – is well worth the time and effort required. Actively monitor and review the results of customer interactions; compliment those employees who do a good job, and re-train or terminate those employees who are unwilling to be a member of your team.
  • The Employee’s Ability to Be Empathetic. In some cases, it will be impossible to meet a customer’s demands or deliver a superior experience. Nevertheless, an employee’s recognition of a customer’s wants or frustrations is essential in arriving at a solution which retains his or her loyalty to your business. For example, when a customer wants to purchase an item that is out of stock, the employee could offer to notify him or her when the next shipment is available, and set a unit aside for the next visit. A disgruntled customer can be mollified by an offer to rescind the transaction or an extra discount on the next purchase. People generally respond favorably when they feel the listener understands them. Never underestimate the power of “I’m sorry,” or “thank you.”
  • The Employee’s Training. When customers trade with you, they expect you to know all aspects of your business. You are the expert to whom they turn for a solution. If your employees don’t understand the basic elements of your business and are not taught solutions to the most common problems, you will not retain customers, and your service or product is less likely to be recommended. Maintain a regular training program and test your employees’ knowledge frequently. Establish a communication program to keep them up-to-date on the latest happenings in the industry, new product features, and new uses for your products. Don’t assume that your employees will be able to get such information on their own. If you discover a need for new training, don’t blame the employee – review your methods and presentations on how to make the lessons more effective.
  • The Employee’s Authority to Deliver a Favorable Result. Whether resolving a difficulty or extending a creative solution to close a sale, be sure that those employees who are on the firing line understand the extent of their authority and the procedures or approvals necessary to take action. Customer problems grow worse with time as frustrations increase. Understanding that the company is trying to quickly find a fair solution when there is a conflict defuses most situations, and gives you the time to resolve a complicated issue. In today’s world of declining customer service, consumer expectations are generally low, particularly when they have problems. Being attentive and solving those problems can quickly turn a bad customer experience into a superior customer experience.

happy customers are the cornerstone of a successful business

Final Word

Delivering an exceptional customer experience is akin to the two hikers attempting to outrun a bear. One hiker says to his companion, “I don’t have to beat the bear, I just need to run faster than you.”

The measure of a superb customer experience relates directly to the extent your company can exceed the competition when it comes to your mutual customers’ expectations. Being a little bit better gives you an edge, but it’s an advantage that can be quickly lost as competitors copy your lead.¬†However, recreating a superior customer experience and continually improving that experience creates a gap between you and your competitors that will be difficult to overcome.

For example, the loyalty of Apple customers is legendary among all industries. Southwest Airlines has become an industry leader with growing revenues and profits when other airlines are contracting and going bankrupt. In every community, there are local businesses that compete successfully with much larger, financially stronger national operations by providing an unmatched customer experience.

Walk a mile in your customer’s shoes, and bring your employees on the walk. Change your business to deliver a superb customer experience, and you’ll be surprised and happy with the results.

Have you had a superb customer experience? What other factors contribute to great customer service?

(photo credit: Shutterstock)

Michael Lewis
Michael R. Lewis is a retired corporate executive and entrepreneur. During his 40+ year career, Lewis created and sold ten different companies ranging from oil exploration to healthcare software. He has also been a Registered Investment Adviser with the SEC, a Principal of one of the larger management consulting firms in the country, and a Senior Vice President of the largest not-for-profit health insurer in the United States. Mike's articles on personal investments, business management, and the economy are available on several online publications. He's a father and grandfather, who also writes non-fiction and biographical pieces about growing up in the plains of West Texas - including The Storm.

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  • http://www.manhattansgreatest.blogspot.com/ Dennis The Menace

    I work in retail and the thing about customer service is this Retail is about customer service but many retailers do not place as high a priority on customer service as they claim. Very often tasks take precedent over service. By tasks I mean very essential functions that need to be done in a retail store on a daily basis. Many retail stores are staffed at help yourself levels and thats why the service is often subpar. Not because the sales associates are not concerned about helping the customers. But very often they have insufficient time to do so. It’s much easier and much more interesting doing customer service than stocking shelves.

    • Michael Lewis

      Dennis, I too have experience in retail and I agree that spectacular, even adequate customer service is unusual when trying to “out Wal-Mart Wal-Mart.” Competing on low prices alone is a very risky strategy unless you have the financial muscle, system infrastructure, and a robust employee recruitment and training program in place to truly be a low cost leader. In many, if not most retail companies, entry level jobs are poorly-paid (at or above minimum wage), the work is tedious and physically demanding, and turnover is high. Yet these same employees are the ones who deal with customers day in and day out.
      I believe there are other ways to compete even in low price markets which can be successful and more fulfilling for employees than the strategy commonly in place today. I’ll be adding an additional article in the next few weeks “Competing in a Low Price Retail Market” you might find interesting.

  • http://www.manhattansgreatest.blogspot.com/ Dennis The Menace

    I work in retail and the thing about customer service is this Retail is about customer service but many retailers do not place as high a priority on customer service as they claim. Very often tasks take precedent over service. By tasks I mean very essential functions that need to be done in a retail store on a daily basis. Many retail stores are staffed at help yourself levels and thats why the service is often subpar. Not because the sales associates are not concerned about helping the customers. But very often they have insufficient time to do so. It’s much easier and much more interesting doing customer service than stocking shelves.

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