Chapter 1
Know Why Service Matters:
Recognizing the Role of
Customer Service in Your
Career Success
Satisfactory customer service isn’t
a differentiator; it’s an expectation
in any successful organization.
Only consistently exceptional
service can distinguish one
organization from others.
In today’s world of high
interconnectivity, poor service
experiences are quickly shared in
cyberspace. True, we can tell
people about good and bad service,
but it’s the bad experiences that are
most likely to trigger a posting
online.
Occasionally it’s because of
dramatically better prices or
convenience. But, in most cases our
repeat business stems from our
service experience.
The bottom line: satisfied, loyal
customers make for successful
organizations.
What If You Don’t Work with
“Customers”?
In its broadest sense a customer is
someone with whom we exchange
value.
Principles of good customer service
can be applied to all kinds of
relationships.
The ideal goal in most businesses is
to create partnerships with
customers.
Is it possible to have a business
that doesn’t need to build
relationships?
Getting new customers and
replacing those lost is an expensive
part of any business.
In this age of technology and
ubiquitous communication, there
are few secrets. Customers will get
the word out about your company’s
service. The challenge is to make
that the good word.
The Damaging cost of a lost
customer
If dissatisfied, they walk
(sometimes run) to another
provider—a competitor. When
customers don’t have a choice—
such as in dealing with public
utilities or government agencies—
they’ll use their feet for something
else: They’ll kick back.
What happens when poor service
causes a customer to quit being a
customer?
Ripple effects happen when upset
customers tell other people. Studies
show that an upset customer tells on
average between 10 and 20 other
people about an unhappy experience.
How much will it cost to replace
these customers?
Customer service research says that
it costs about five to six times as
much to attract a new customer
(mostly advertising and promotion
costs) as it costs to keep an existing
one.
Core competencies are the key
skills a business encompasses to
provide a service to the customer
that are not easily reproduced by
others.
Six major core competencies
provide a foundation for delivering
superior service:
• The Ability to Communicate
Effectively
One warning: Do not promise
something you are not able to
deliver on and always state what
you “can do” not what you “can’t
do.”
• Acceptance of Ownership
• The Ability to Use
Empowerment
• The Ability to Manage
Knowledge
• The Ability to Manage Change
• Predisposition for Continuous
Improvement
A prerequisite to any rational
improvement is feedback—from
customers, employees, and the
marketplace. If we don’t know
how we’re doing now, how can we
possible improve?
The ultimate goal of customer
service is to create customer
loyalty. Understanding loyalty—what
makes your customer loyal and how
to measure this—enables a
company or person to improve
customer-driven service quality.
To best understand what customer loyalty
is it is useful to first recognize what it is not.
Customer loyalty is sometimes mistaken
for:
• Customer satisfaction alone.
Satisfaction is a necessary component,
but a customer maybe satisfied today
but not necessarily loyal to you in the
future.
• A response to some trial offer or special
incentive. You can’t buy loyalty; you must
earn it.
• Large share of the market. You may have
a large percentage of the customers for a
particular product or service for reasons
other than customer loyalty to you.
• Repeat buying alone. Some people buy
as a result of habit, convenience, or price
but would be quick to defect to an
alternative.
Considerable empirical research
concludes that customer loyalty is best
defined as a composite of three
important characteristics:
• It reflects overall satisfaction.
• It involves a commitment on the part
of the customer to make a sustained
investment in an ongoing relationship
with a company.
• It manifests in customer behaviors,
including
a. repeat buying (or the intention to
do so as needed)
b. willingness to recommend the
company to others
c. a commitment to the company
demonstrated by a resistance to
switch to a competitor
An emotional connection with
customers is crucial to building
loyal relationships. Customer
loyalty achieved through
establishing positive relationships
is the highest goal of our service
efforts.