Quality Digest Magazine Article - Mike Albert
Regardless of what business you’re in -- manufacturing, retail, hospitality, or the service industries -- you have customers. Because customers have free will and can do business anywhere, creating a pleasing customer experience is paramount to customer retention. Stellar service, however, should go beyond that. It should create customer advocates and valuable word-of-mouth advertising, which translates to more customers, repeat business, higher sales frequency, and the satisfying license to charge a premium over your competitors. How do you achieve stellar customer service? By following five easy steps.
But first, let’s talk about the so-called "customer experience." Experience is the key word here. It encompasses a number of events and encounters. My company conducts thousands of quality and service evaluations every month in a variety of industries, and we often inquire about consumers’ attitudes. What we’ve learned is that consumers’ expectations are low. They feel that if they can get through a purchase process or have a meal and return home without being too badly abused, they’ve had a pretty good day. What an opportunity for you! Offering even the slightest positive service experience to your customers comes across as a big thing, and if you do a big thing, people can’t stop talking about you to others.
Let’s use the restaurant or hospitality industries as an example. If the process of greeting and welcoming you into a restaurant or hotel property is done really well -- a big smile; genuine, interesting conversation; and a courteous pause to allow you to get comfortably seated before giving you the menu -- you truly feel like a guest. Adding to the special experience are spot-free doors, a clean floor, no litter on your path into and through the restaurant, and music set at a comfortable level.
You can see where I’m going with this: All these elements contribute to the experience. They’ve been just right, so you’re unperturbed if it takes the server a little longer than it should to get to your table. Why? Because the quality of the initial experience convinced you that your expectations would be exceeded, not just met. Smart operators in all types of industries are catching on to this and practicing it.
Another example I like that demonstrates going above and beyond is in helping customers find what they need (the customer service desk, for instance) in your place of business. The usual response is, "In the corner, next to appliances." A better response would be, "Come with me, and I’ll show you." Courteous assistance happens like that from time to time in a hospitality environment, but I was shocked when it happened to me recently in one of the two national home-supply stores. This opportunity to exceed low expectations is open to all businesses at all times. Of course, there are those businesses that provide a great experience, but they’re the exception. However, they’re the ones at the top of consumers’ minds when they need that particular service, and they’re the ones that consumers rave about to others.
So now let’s look at those five steps of customer service in greater detail.
Do you know how much your customers are worth? More important, do your front-line employees know? If a family spends $100 per week at its favorite grocery store for the next 20 years, they’re worth $104,000 to that place of business. Losing just 10 customers can mean losing more than a $1 million. To determine what loyal customers are worth, calculate their average purchase amount and how often they shop with you during the year. Service companies should figure out how often they bill for services rendered per year. Then calculate what amount these customers are worth during the next 20 years. A customer’s experience is made up of many small things, each of which adds up either to a happy, loyal customer or one who is lost. Because companies can no longer compete on price or location alone, customer experience is the ultimate differentiator and can mean millions to your bottom line.
To establish and maintain stellar customer service, your company must first make a top-down commitment to a measure-and-monitor program, regardless of whether it’s developed and maintained internally or externally. Just establishing the standards that will be held as the company’s gold mark and communicating these to the troops won’t ingrain them in everyone’s behavior. Employees tend to do more of what you inspect rather than expect. A continuous monitoring effort shows management’s commitment to customer service, gives employees the practice needed to ingrain the new behaviors, and ensures that benchmarks will be upheld even through employee turnover. Here are some factors to consider by industry:
• Retail, restaurant, and hospitality. For these industries, the customer comes to your place of business, unless your business is Internet retail. Therefore, it’s important to walk through the purchasing process to get a feel for what’s working and what isn’t from a customer’s perspective. Do this a number of times in several locations. Are you greeted within 30 seconds of arrival? Is the space clean and tidy? Do employees mention the current special or promotion? Are you thanked for your purchase? Was the interaction genuine, or was the dialogue rote and emotionless, leaving you feeling like another number? Are signage and promotional material on display in the right spots? Your experience while walking through your customers’ purchasing process will clearly dictate the parameters that should be built into your customized customer-service evaluation program. Remember, customers shop where they feel good. As you walk through your process, consider what could have been done to make you feel better or more like a valued customer, and what would make the shopping experience easier or quicker.
The process of helping your customers with their buying decisions can also lead to higher ticket sales if you incorporate suggestive selling into your program. When buying a high-end stereo, a buyer may want to know about additional components that can enhance the system. The add-on sales are typically where the greater profit margin lies (e.g., in the consumer electronics industry, a large-screen television has compressed margins, maybe 5 percent to 10 percent, while the speakers, cables, and wall mounts, or a home-theater package, have up to a 60-percent profit margin).
Consider your restaurant patron, who may have chosen a premium liquor had it been offered by name. If your employees routinely suggest that customers try new products or in-store promotional items or, for instance, make hotel guests aware of on-site spa services, the incremental revenues can be enormous. Do you know what moving your suggestive selling percentages from 8 percent of the time to 98 percent of the time companywide can mean in revenues?
I’ve patronized a restaurant for years because of the quality of the food and service. I recently learned that their chefs make their own New York-style cheesecake. Despite all the years that I’ve gone to that restaurant, no one had ever told me that. Sure, I’d been asked if I’d like dessert, but no one ever said, "Would you like to try our homemade New York-style cheesecake? It’s out of this world!" (And it really is that good.)
• Manufacturing . If your company manufactures a product, it’s critical to know how your product is presented to the customer. With millions of dollars spent on research and development, production, advertising, packaging, shipping, and so forth, it doesn’t make sense not to know what happens once the product finally ends up on the shelf. Are your resellers’ employees knowledgeable about your product, and can they easily describe its features and benefits? What percentage of the time do they recommend your product rather than your competitors’? Do they make consumers aware of your additional components or products that complement their purchase? All these should be built into a customer-service evaluation program for your resellers.
To analyze resellers’ customer-service habits, we use an open-ended approach. This means we go to a reseller and ask to see, for instance, a big-screen TV without mentioning a brand preference, and see where they take us. From this, we learn what brands they advocate. As an example, we’ve learned through thousands of evaluations at a variety of resellers that Bose is recommended in the audio field significantly more often than any other audio manufacturer.
Again, using the consumer-electronics manufacturer as an example, if we take a predisposed approach to purchase a big-screen TV (i.e., we go to a reseller and inquire about a specific brand of TV), we get a different picture on how the reseller handles that product. This approach gives the salesperson the opportunity either to be an advocate for the asked-for brand and tell us all about its features and how it’s different or better than other brands, or they may say, "That’s a good choice, but have you seen brand Z? It’s way over the top because…"
The predisposed approach tells you if this particular reseller is turning customers away from the requested brand, for whatever reason. It could be that the training hasn’t trickled down to the staff level. Examining the trend analysis from the accumulation of data and sorting by reseller, a manufacturer learns if it’s just an issue in that particular reseller, a specific group of a particular reseller’s locations, or if it’s a universal problem. Through data that you accumulate from a well-managed and -organized program of measuring and monitoring the customer experience, you gain insight that you can identify, quantify, and put into an action plan to address and resolve customer-service issues.
• Service industries. Whether your company offers a business-to-business or business-to-consumer service, the operative word to keep in mind is "service." To define the standards by which your service should adhere, again, it’s important to walk through your customers’ experience. Doing this a number of times with a variety of your front-line employees, whether by telephone or face-to-face, will give you an idea of how to improve your service and the benchmarks to include in your customer-service evaluation program.
Always communicate to all employees and resellers of your product the standards that you’ll be measuring. This may sound like a no-brainer, but I’ve encountered many companies that want to secret-shop their employees simply to catch them doing something wrong. Recognizing or even rewarding positive behavior makes it happen more often and is a much better approach. Many companies foster company pride and healthy competition between employees by presenting year-end awards to those who consistently score high on all parameters. Making a big deal of the top performers goes a long way toward communicating top-down support for superior service.
How extensive or technical your customer-service standards are will determine whether the means of conveying your program’s standards to the troops should be a simple memo, print directives combined with in-person communication, or possibly training.
Start with a program designed to achieve 10 goals. Once you’ve successfully achieved the 10 goals, then consider further improvement. The reason is simple: You’re trying to effect change for each location where it counts -- at the staff and management level. It’s unrealistic to ask people to accomplish 50 procedures at once with a degree of excellence. Having a detailed plan for execution is fine, but feed it to the troops in digestible portions. We’ve rarely persuaded a client to ask just 10 questions to start, but the few that did were wildly successful with their programs. Be realistic in your expectations; people respond to that. If they feel that the program isn’t doable, they may not even try. Set them up to succeed, recognize and reward success, and everybody wins.
Timely, frequent data monitoring is key to analyzing your company’s performance. If you have 100 evaluations of your process, you can be pretty sure that the resulting trend analysis is accurate. Shopping your front lines frequently will ensure accurate information that will provide the actionable data to make decisions with confidence. If you don’t have tens of thousands of shoppers to choose from, here’s a problem you may face: Your employees can get to know your secret shoppers and perform completely differently for them. I’ve heard funny stories of employees using certain codes over the intercom to alert co-workers that a secret shopper was in the building. So, you must use different evaluators all the time to ensure accurate results.
Timely information is important. We immediately e-mail notification of evaluations to managers and employees at all levels while the experience is still fresh in their minds so that the evaluation makes more sense to employees, and managers are aware of problem areas sooner. A good, aggregate backup reporting system is essential, too, so that you can look at the company’s overall averages for various time periods to monitor progress and even drill down to specific locations and employee performance. The resulting trend analysis is where you’ll derive meaning and your best actionable data. An individual evaluation is a moment in time. A trend analysis derived from many evaluations can, for example, inform you of the percentage of time, organizationwide or at one location, that your telephone is being answered in three rings or fewer.
Suppose your results are disappointing on a particular issue. Your reporting should be set up so that you can instantly determine the locations that are causing the poor results. Now you know where to go to address the opportunity. You may sense what’s going on at particular locations or have people telling you what they feel is going on, but a well-managed program validates what’s really happening.
With a reliable and real- time reporting system in place, it’s easy to give feedback to managers and employees when standards aren’t met. Communicating performance results and possibly providing more training create the feedback loop to front-line employees that will reinforce the desired behaviors and your company’s commitment to your gold standards for customer service.
It’s also important to share results when standards are met. Knowing that top-level management recognizes good store-level performance with accompanying kudos goes a long way to foster pride and solidarity with corporate’s service goals. We work with many chains that have established year-end awards for the locations and employees that have best met the customer-service standards. With a good reporting system, you’ll have the year-end data at your fingertips by location, general manager, time of day, and even by employee.
Traditional business thinking rewards management and hands out bonuses when profit-and-loss performance or projections are met. Having spent much of my life in the hospitality business, I know that it’s possible to manage profit and loss right down to the bottom line and achieve what is requested. What I might do in that process is to sacrifice customer service by sending staff home early to meet my payroll goals. To control food costs, I might serve an item that maybe should have been tossed. However, if managers must perform to a standard on the quality of food and service delivered to get a portion of that bonus money, and the standard is measured and monitored, then they’re forced to watch the quality as well as the profit side. That’s a good balance and can be achieved by having a program in place that’s as important to you as monitoring your profit-and-loss performance.
Always remember that knowledge of your customer’s experience is power. If you’ve been thinking about improving your company’s level of service, the rewards will come to your bottom line through customer retention and repeat business: Ten customers that love their experience and spend at least $50 each month for the next 10 years mean $60,000 to your business. You’ll also be rewarded with new business gained by word-of-mouth. Whenever people have a good experience, they like to share it with their friends. If 10 satisfied customers tell 10 people per year, results become exponential. That’s good business.
Mike Albert is the founder and CEO of Satisfaction Services Inc. (www.satisfactionservicesinc.com), a leading provider of quality and service evaluations. Based in Fort Lauderdale, Florida, the company employs tens of thousands of shoppers worldwide and has franchised offices in Houston; Germantown, Maryland; Knoxville, Tennessee.
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