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.
