People talk about customer service almost as much as they do about the weather. In both cases you might feel that not enough is being done about it. The cartoon below is perhaps typical of how some companies feel about customer service.
Cartoon originally appeared on CustomersAreAlways
Customer service is hardly a new topic, however it is becoming much more critical to success in this Internet age. This article will explain why.
If we’re about to talk about New Marketing, you might well ask what was Old Marketing. For that we can turn to Marketing Basics: The Four P’s Are As Relevant Today As Ever. There you will find:
- Product: Quality, branding and packaging play a part.
- Price: Includes discounts and credit terms.
- Place: Where the product is sold and how distribution channels work.
- Promotion: Covers sales, ads, marketing and public relations.
The idea is that businesses simply have to make those four decisions, says Philip Kotler, a professor of international marketing at Northwestern University’s Kellogg School of Management. The theory was developed by him in the early 1960s, but is as valid as ever.
It’s certainly true that it is still valid. However it’s not the whole picture. To an extent it was explaining how companies could pursue their prospects and sell them products. The supplier was in control. The customer was the target. As the Internet has come into play in the last 10 years, another view of the supplier/customer relationship has developed.
The old view might be called a product-driven view. A company strived to make the best possible product it could for its potential market, based on its perception of market needs. The new view is what is called a customer-centric view. This accepts that the customer is in control. One can only develop and sell what the customer really wants. Everything should be viewed from the customer’s perspective. That can be difficult to do in practice given old habits, even if a company accepts that it’s the right point of view in theory.
WHAT IS CUSTOMER SERVICE?
Customer service can be costly and that is why some companies try to do the minimum. However the underlying principles have been clear for over a hundred years. The following quotations provide a good round up of how different people have seen it:
- A customer is the most important visitor on our premises. He is not dependent on us – we are dependent on him.
- If we don’t take care of our customers, someone else will.
- There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
- Sam Walton, Wal-Mart
- Here is a simple but powerful rule: always give people more than what they expect to get.
- Nelson Boswell
- Be everywhere, do everything, and never fail to astonish the customer.
- Macy’s Motto
- Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.
- Peter Drucker
- If the shopper feels like it was poor service, then it was poor service. We are in the customer perception business.
- Mark Perrault, Rally Stores
- Every great business is built on friendship.
- JC Penney
- Your most unhappy customers are your greatest source of learning.
- Bill Gates
- In the world of Internet Customer Service, it’s important to remember your competitor is only one mouse click away.
- Doug Warner
Quotations are taken from Customer Service Quotations: 50+ Free Quips, Questions, and Comments to Inspire and Motivate by BusinessTrainingWorks.
WHY DO SOME COMPANIES DO THE MINIMUM?
There are some very strong reasons why companies should do more Customer Service. However many seem to regard it only as a cost item. It is true that making products and supplying services are very different in nature. Here are some of the reasons:
|Making Products||Supplying Services|
|Manufacturer designs||Customer demands|
|Costs can be reduced||Sometimes costly|
|Can make and store||Usually done when required|
|Production People planning is easier||Service People planning is harder|
|Must have features||Nice to have benefits|
|Product driven||Customer centric|
|Manufacturer is in control||Customer is in control|
Cutting corners and costs on customer service may not immediately impact on sales unless there is very strong reaction by customers. Any manager hoping to be a short-term hero may decide to go for the economies created by minimal customer service. If only she had appreciated the sales generating capacity of customer service, the decision might have been very different.
WHEN IS CUSTOMER SERVICE SATISFACTORY?
What then is the right level of customer service? Who should determine that? If Customer Service is only seen as a relief valve that irate customers can use, then the manager will decide how much he can live with.
If customer service means what it says, then clearly only customers can say whether the level is satisfactory. It needs to be said that this does not mean that every last customer will agree that customer service is to their liking. However the majority of customers are reasonable people and certainly the majority should speak favourably about the company’s customer service.
WHY IS CUSTOMER SERVICE SO POWERFUL?
Customer service should not be seen as some kind of charity activity done for the benefit of customers. There are a number of reasons why customer service is now a powerful lever on sales.
The new factor is the emergence of the Internet. As the previous newsletter described, it is important to have an Internet mindset and realize that the world has changed dramatically. With respect to customer service this has a number of important outcomes:
- The customer is now much more in control and has ready access to product information and to other competitors.
- A customer expects more respect and information from a supplier.
- Contact with others is now very much easier via the Internet so information from justifiably dissatisfied customers spreads rapidly and they can easily form action groups, if they so wish.
It is important to maintain a dialogue with customers. Here are some of the reasons:
- The company will be more aware when customers are looking for new products or product benefits.
- The company is constantly knowledgeable on customers’ likes and dislikes.
- Customers can be contacted to sell related products to them (cross selling).
- Customers can be informed about upgrades or new versions of the products (up selling).
- If a customer is dissatisfied, more information can be obtained on what caused that.
It is interesting to note that merely selling a product does not create much of a chance for this dialogue. It is only when services are offered that the opportunities to communicate multiply rapidly.
Another reason why customer service is so powerful can be explained by the theories of Robert Cialdini, a social psychologist who is an expert in the systematic study of persuasion, compliance and negotiation. His number one weapon of influence is what he calls Reciprocation. This is a feature noted in many societies where the act of giving creates an obligation to return the favour. The generally poor level of customer service means that customers grow to expect poor customer service. When a customer finds that the company seems to give so generously through a proactive customer service program, then this almost appears like a bonus, a gift. According to Cialdini, the customer may well feel that at some point in time they should return the favour. This may be by telling all their friends about the company or by making their next purchase from the same company.
DO YOU SELL A PRODUCT OR A PRODUCT/SERVICES PACKAGE?
Many companies develop and sell fine products. Some of them can be rated as stars. However if a customer buys a product off the shelf, no communication is established. Some companies realizing this ask the customer to register the product with them by completing a postcard and mailing it. Sometimes there is an implied threat that this is necessary to ensure the warranty applies. Needless to say this cannot be regarded as customer service. Rather it appears perhaps justifiably as something the company is demanding.
Products do have certain features that are useful to the purchaser. However the buyer does not buy only the features. Probably he or she is concerned to receive the benefits to be obtained by having and using the product. Some of the benefits are not created by what is in the box holding the product. They only come by some service that can easily be provided by the company.
This does not necessarily mean contact with a human representative of the company. It can be by interacting with a company website holding product knowledge for example. A successful product/services package will meet most of the needs of most reasonable customers. It can be envisaged as a total shell that comes with a product to create complete satisfaction. When a company provides this full package, it can more easily charge premium prices and can make sure it wins and retains more customers.
It should be mentioned that full service does not necessarily imply high costs. Some services that the customer values highly can often be supplied with minimum cost. All it takes is to try to see everything from the customer’s viewpoint. Just work a little harder and do some thinking. A useful checklist here is to consider all phases of the product life cycle. They are:
- Exploration before purchase
- Product Life (maintenance and repair)
- Product Death (recycling)
What services can the company provide during each of these phases? What is the cheapest and most effective way of providing each of these services? Remember that these are not just the icing on the cake for the customer. Your customer chose your company. It’s a shame to turn them against you by not easily providing some service they really need.
WHAT HAPPENS WHEN CUSTOMER SERVICE ISN’T
If a company does not see the benefits in company service, then perhaps a look at the damage that poor customer service can create will do some convincing. Just do a Google search on poor customer service and you’ll find many examples of companies that seem to be known for this. Some of them are listed in a companion blog post, Customers Speak Out In The Internet Age. If you wish to let others know of some frustrating customer service situation and haven’t done so yet, then why not go there and add your comment.
The climate of opinion that this creates can have unfortunate consequences for the companies involved. The three major cell phones suppliers in Canada, Bell, Rogers and Telus, provide a clear illustration. Their high prices and complex rate plans do alienate customers and unfortunately their customer service functions receive a good deal of criticism. Not surprisingly the politicians, wishing to take popular decisions, are most happy to open up the Canadian cell phone market to more competition.
Remember that the Internet has changed the playing field. The customer is much more in control and the competition is all around and standing by. Although Marketing used to be about the 4 P’s, it’s highly likely that Customer Service is now much more influential than the P for Promotion. Customer Service should be planned thinking Full Service rather than Partial Service. Make sure that your product/services package includes all that a reasonable customer might expect. It can even be Self Service but it’s certainly not the time for mere Lip Service.