Healthy relationships: Key to business and personal success
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Succeed by attracting, keeping loyal customers
“Service economy” not as it should be
Customer Service, 5e
Paul R. Timm 2
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

What Happened to the Service Economy?
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Ignoring customers
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Unmet promises
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Incomprehensible customer service people
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Jargon instead of answers
Customer Service, 5e
Paul R. Timm 3
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Ockham’s razor
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Wal-Mart vs. K-mart
Customer Service, 5e
Paul R. Timm 4
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Satisfied customers lead to success
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K-mart sales about $50 Billion/yr
Wal-Mart sales about $400 Billion/yr
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But they sell the same stuff for about the same prices from the same type stores in the same locations . . .
Same, same, same . . . DIFFERENT
Customer Service, 5e
Paul R. Timm 5
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

A “customer” is someone with whom we exchange value
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Money for a product or service
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Work for wages
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Time as a volunteer
Customer Service, 5e
Paul R. Timm 6
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

No one succeeds without loyal customers
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External customers: transactions involving an exchange of money
Internal customers: employees and coworkers
Customer Service, 5e
Paul R. Timm 7
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Relationships with customers can become partnerships
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Ongoing relationships
Service intimacy
Generosity, trust
Share joint purpose
Speak truth with compassion and care
Pursue equality with grace
Customer Service, 5e
Paul R. Timm 8
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Positive word of mouth gets and keeps customers
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Cost of getting a new customer
A friends’ advice or recommendation
Turbocharge with email, blogs, or other electronic communication
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“word of mouse”
Customer Service, 5e
Paul R. Timm 9
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

How do you calculate the cost of a lost customer?
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10-30% loss of customers per year
Customer retention programs= profits jump
25-100%
Ripple effects
Customer Service, 5e
Paul R. Timm 10
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

What are the numbers behind an unhappy customer?
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An upset customer tells 10-20 other people
These tell five more
The total number affected by one poor experience = 50 to 100!
Customer Service, 5e
Paul R. Timm 11
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

How much does it cost to replace the unhappy customer?
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Five to six times more than keeping existing one
About $118 to get a new customer
About $19 to keep one
Customer Service, 5e
Paul R. Timm 12
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Some key change in the diverse nature of customers
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Most diverse customer base ever
Wider age range of employees and customers
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More 60+ customers
Broader globalization means customers from all around the world
More work/life balance
Customer Service, 5e
Paul R. Timm 13
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Few companies fully back their promise with strategy that
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Makes customer satisfaction/loyalty key strategic goal
Trains all employees to use behaviors that make customer feel important
Translates slogans into actions that convey caring to customers
Customer Service, 5e
Paul R. Timm 14
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Your number one task, regardless of your job title, will always be to attract, satisfy, and preserve loyal customers.
Customer Service, 5e
Paul R. Timm 15
© 2011, 2008, 2005, 2001 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.