Superior service pays off. It leads to increased revenue, increased pricing power, word-of-mouth advertising and happy clients who praise rather than badmouth your reputation.
“On average, research shows that a 1 percent improvement in customer satisfaction is associated with a 4.6 percent increase in a firm’s market value,” said Dr. Claes Fornell, an international expert on customer satisfaction and creator of the American Consumer Satisfaction Index.
The University of Michigan professor continues: “In business, you have to quantify your satisfaction rate by customer retention. Define your yearly percentage of repeat customers and work on improving that. Once you figure out the average revenue per job, you can approximately predict future revenue from your investment in improved customer satisfaction. In addition, there is value and pricing power in a good reputation — to a certain point.”
Here is an example of an immediate conflict — serving Mrs. Fussbucket. She is a picky customer, but winning her over has many benefits.
I remember working on a Colonial for “Mrs. Fussbucket.” She was turning the job into a loser quickly, so I decided to agree with her verbally but not deliver on my promises. I became focused only on getting paid.
She quickly figured out I was just paying her “lip service,” and she was very ticked off.
“A contractor has to remember that a dissatisfied customer is powerful — more [powerful] than a satisfied one,” Fornell said. “And is more likely to tell someone about their [bad] experience. When you add in that the contractor is working on probably the most treasured asset of a person’s life — their home — there is a stronger dimension to the dissatisfaction compared to buying a tire or a sweater.”
Of course, I lost Mrs. Fussbucket as a repeat customer. But my biggest loss was that I did not get a job in that neighborhood for years. Industry experts say an unhappy customer will tell 22 people on average and a happy one will tell seven. Mrs. Fussbucket was unhappy and possibly told up to 22 neighbors and friends. Surely those 22 would never hire our firm. One customer’s badmouthing trashed our reputation and diminished future profits.
I paid lip service to quality rather than truly serving a customer well. I learned a big lesson from that experience — lip service may seem to be an easy way to manage difficult customers, but substandard service hurt my business in the long run.
Eight Tips for Delivering Superior Service
1. Excellent customer service begins with high standards, so take the time to define the level of service you aim to deliver to all your customers and remember to set the bar high.
2. View customer concerns as an opportunity to build relationships, not as problems that you need to defend yourself against. Every company makes mistakes, but superior ones respond better to complaints and use problems to find smart solutions and lavish the customer with service. If you do this right, the customer will remember that you fixed the problem, not the problem itself.
3. Customers want to see accountability in everything you do. Don’t mince words about a misstep. Few words disarm a negative situation more quickly than “I’m accountable” and “this is unacceptable.”
4. Passionate customer service is a way of life. If you find service easy, then you probably are not committed enough. High customer service is time-consuming and challenging.
5. Exceptional customer service requires that every staff member, not only supervisors and the owner, be committed to the concept.
6. When in doubt, live by the rule that gray areas always should be gifted to the customer.
7. Give customers multiple opportunities and avenues to communicate their concerns to you directly rather than posting complaints on the Internet for all to see.
8. Service after the sale is essential. Most successful businesses have some type of guarantee. Do not view this as a cost, but rather as a means to build your relationship with the customer.
Who Is Working for Whom?
Zig Ziglar, a famous marketing guru, refers to “having satisfied customers constantly out in the field actually working as unpaid part-time sales reps referring you to others.”
In other words, the ideal situation is to earn Mrs. Fussbucket’s trust, so much so that she refers you to her friends. Word-of-mouth advertising is more effective than paid advertising. Even better, Mrs. Fussbucket’s neighbors probably know she is particular. If she is happy, then that’s a major badge of honor for you to get a profitable order from her neighbor.
So, center your efforts on service, communicate and listen, be accountable and fix any mistakes, and your customers will partner with you to help build a profitable business. The alternatives — poor service and losses — are unacceptable.
Robert Fortune Jr. is co-owner and co-founder of Fortune Restoration, a painting, masonry and carpentry company in Chicago.
This article was provide by Multibriefs.