Service excellence is rocket science!
For the past six months, I have been talking about how poor customer service is throughout the English-speaking
world. Studies show customers are not just disappointed, they are outraged by the way they are treated.
As one New Zealander said in a recent survey, “You can understand how people become violent!”
What is staggering is not what upsets customers but the number who are upset. For example, 77% of
all British consumers had at least one major problem with a product or service they purchased last year.
Eighty-three percent complained and 90% were unhappy with the way the complaint was handle! Similarly,
a New Zealand banking survey by customer service expert Paul Linnell found that approximately half of
all bank customers had a problem with their bank last year and of those who complained, 58% were dissatisfied
with the response to their complaint. Forty-four percent said their problem was still not resolved.
For one bank, the figure was 68%!
Companies should worry about these results. In the UK and USA, 50% of customers change at least one
major supplier every year because of poor service and in New Zealand, the figure is 42%. When customers
cannot get through on the telephone, 31% hang up and try another company and 24% give up altogether.
One study found poor experience with a contact centre caused 56% of callers to stop doing business with
that company. Customer service also impacts on the bottom-line as overseas research shows there is a
direct link between service quality and the prices people will pay. In New Zealand, Paul Linnell estimates
that the problems Kiwis have with their banks puts 29% of banking customers at risk of defecting, creates
a 23% drop in customer loyalty and puts between 8% and 12% of a bank’s profits at risk.
After hearing how badly customers believe they are being treated, managers often come up to me a forlorn
look on their faces. “But it’s not rocket science,” they say shaking their heads. “Why
are companies providing such poor service?” Because service excellence is rocket science! There
is far more to being able to create a great experience for our customers than getting staff to smile
and be friendly. And much of what needs to be done takes place behind the scenes.
Based on research I have just completed (see www.ianbrooks.com/servicenz), I believe there are 17
activities that drive service excellence and doing these well is essential to competing effectively
in today’s marketplace. My study suggests five of these activities are done well by 50% or
more of the New Zealand organisations I reviewed:
1. Make your customers feel welcome and comfortable.
2. Help them decide what to buy so they get the best value.
3. Manage the sales and purchase transaction well.
4. Look after your staff so they are willing and able to look after your customers.
5. Understand your customers’ needs.
Of the 50 companies studied, 71% excelled in the first three activities, 59% were good at looking
after their staff and only 57% excelled at understanding their customers’ needs. The last finding
is of concern given this is one of the most basic components of business success.
Clearly, these are important activities to get right. Nevertheless, they are what is traditionally
considered to be good customer service and are nothing more than what all customers would expect to
see. If you do not get the right, you are not in the game.
My research also suggests that 12 key drivers of service excellence are being done poorly by 40% or
more of the companies studied.
- Eighty-one percent do not tell their customers the kind of experience they will have when
they do business with the company. Consequently, their customers have no idea of what to expect thus
increasing and the chances of them being disappointed.
- Fifty-nine percent do not tell their staff how their customers wish to be treated therefore
making it difficult for staff to know how to behave. This increases the chances customers will be
dissatisfied.
- Fifty percent do not have policies, processes and procedures that enable staff to create
the experience their customers expect. This is probably the major reason why customers are so outraged
and staff feel helpless to do anything about it.
- Forty-five percent do a poor job of inducting new staff. If staff do not understand the
products and services they are selling or how their company operates, customers will be dissatisfied.
- Forty-three per cent of companies are poor at putting themselves in the customers’ shoes.
In most companies, people think about the customer not like the customer. Imagine what would happen
if business managers and staff put themselves in the customers’ shoes before they allocated
resources, set policy, made decisions, took action or even opened their mouths!
- Forty-one percent of companies are poor at following up to check the customer is happy.
An after-sales follow up call is smart business. It allows you to correct any problems the customer
has
had and it shows you care. It also helps you stay in touch and strengthens the relationship you have
with your customer.
- Forty-one percent are poor at ensuring their staff meet the needs of their internal customers.
For the paying customer to have a great customer experience, you need a structured and disciplined
approach to providing excellent internal customer service.
- Forty-one percent are poor at involving staff in improving the business. Staff have good
ideas and people who deal with customers know what customers want. Smart companies make use of this
knowledge.
In my view, companies are weak in these areas because they know little about their customers. In a
survey by the National Association of Purchasing Managers in the USA, 75% of their members said their
suppliers do not understand their business. Can same can be said about customer preferences and expectations?
In my experience, companies are focused on internal issues and spend very little time in their customers’ world.
Thus they cannot put themselves in their customers’ shoes and have policies and business processes
prevent staff from delighting customers.
The biggest opportunity companies have to gain a competitive advantage is to get to know their customers
better. Companies need to learn about their customers’ businesses and to understand how their
customers want to be treated. It is not hard to do. Your customers will tell you everything you need
to know. Just ask the right questions, listen to the answers and then do something with what you have
learned.
Once you understand your customers, turn your attention inwards to ensure you are hiring the right
kind of people and inducting them properly; that your policies and processes enable your staff to delight
your customers; and that internal customers are looked after properly.
Is all of this worth doing?
Yes, because 100% of your profits come from your customers!
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