Guest Blogger – Jalene Nemec

customer-service-bookcover

Have you ever had an unpleasant experience related to customer service, perhaps at a home improvement store or with your local cable company? How did that experience affect your overall impression of the company? Were you encouraged to take your business elsewhere?

As a consumer during hard economic times, you want to spend your money where you feel valued. You want to interact with associates who are friendly, knowledgeable about their business and who want to help you. Unfortunately, many companies today have allowed their customer service to become nearly extinct. Furthermore, they have failed to provide recognition to their employees for a job well done. Businesses once understood that by valuing all employees that company’s success would continue.

Employees felt responsibility for their actions because they felt respect, value, and self-worth. The businesses strived for continuous improvement. Employees were loyal to these companies and retired with them. In recent times, employees feel less and less appreciated.

They don’t feel important to their employers. As a result, they have made a conscious decision to stop caring about elements such as customer service. Workers have lost faith that they will be able to climb the professional ladder, leaving almost zero incentive to stay with the same company.

Instead, employees move up in their career by increasingly changing jobs and switching companies. Everyone is negatively affected by this cycle. In lieu of progressing, businesses resemble a wheel spinning in mud. Companies receive mediocre staff support, employees give poor customer service, clients purchase less, businesses see reduced profits, and employees get hit with layoffs, pay cuts, and poor benefits.

The customer service aspect of these companies has seen the most drastic decline. It has been carelessly devalued. Contrary to popular belief, customer service is not just about solving problems. It is about being the “face of the company.”

Managers have further endangered the myth of customer service by outsourcing client support to low-cost countries. They have eliminated receptionists and replaced them with recordings. They have almost entirely erased the need for training.

Finally, to show efforts that they still care about their customer service performance, the same businesses continue to send out surveys. Many clients not only consider the surveys annoying, but the company fails to make them worthwhile by ignoring complaints. All of this is done in an effort to save money.

Businesses today must change this mindset if they want to grow their business successfully. In my book titled “Great Customer Service: The Definitive Handbook for Today’s Successful Businesses” and co-authored by Dr. Green, I focus on five key characteristics that together lead to good customer service. Those characteristics are attitude, awareness, accountability, action and affability (friendliness).

For a company to improve their customer service they must accept change. Change begins with the right attitude. Before a company can change their customer service, they must establish a mission to provide quality service. Furthermore, the company should be aware of the current state of the service they provide.

Change cannot be made without understanding the situation at hand. A business may question, has there been a noticeable decline in sales? If so, could it be a result of the customer service?

The best way to kick-start change is to hold employees and managers accountable. Without effectively maintaining accountability for everyone involved, people will not see a reason to change their behavior and the business will suffer. Holding personnel accountable is the first part of taking action. Unless a company makes a conscious decision to actively improve, change will be temporary or non-existent.

Finally, the last characteristic is affability. It seems like a minor detail, but consider some of your past consumer experiences? There were probably a few instances where an employee helped you in an “I have to” way, and there were times where you were helped in an “I want to” way. The latter is much better.

Throughout the book, I also focus on how to build a more profitable business, how to increase good sustainable customer service, how to inspire workers toward greater organizational performance, and how to inspire today’s demanding customers. 

While I could continue on about how these five characteristics impact the other topics covered in my book, I would rather hear from you. As consumers, professionals and MBA students, use what you have experienced and learned to explain how you believe these characteristics impact profitability, sustainability, performance and inspiration. There are no perfect answers. Good customer service is not necessarily cut and dry, it is all in the eye of the beholder!

Please share your thoughts on this topic. 

About the Guest Blogger

Jalene Nemec, author and industry expert

Jalene Nemec, MBA, is the author of the upcoming book, Great Customer Service. She is also one of the brightest business thinkers in the world, having both extensive customer service and leadership experience.  She is a former Lincoln Memorial University MBA graduate.

Guest Blogger – Jalene Nemec

We face unprecedented economic times in a globalized marketplace where purchasing from places as far away as China are just a click away. As a direct result companies have had to review, refocus and revamp their business scope to compete and sustain their livelihood.

Some have opted to accomplish this by changing their product line, cutting costs, slashing prices, removing excess overhead and reducing pay. All these options can prove successful and have. But there is a better solution. Improve your customer service and earn loyal customers!

Customer service by definition is to provide assistance with courtesy those who patronize a business. [1] A company that provides great customer service over their competitors creates loyal customers who will patronize their business year over year.  

The direct result of this is increased profits. Customers become loyal when they know they can trust your company to take care of their needs, even their most frivolous complaints and to do it with kindnesses.

To illustrate this, John Goodman used a simple calculation for getting customers to complain and then satisfying them. The assumption in this example is that a customer is worth at least $30 in profit over a year’s time.

The cost of handling a complaint is about $5 and at least 75% of callers are satisfied. To quantify the payoff of soliciting and handling complaints, it’s critical to know the prevalence rate of non-complainants and their loyalty, as well as the loyalty of those who complain and are not satisfied. The calculation for moving a customer with a problem from non-complainant to satisfied complainant is provided.

Payoff due to improved loyalty – Typically, moving a customer with a problem from non-complainant to complainant to a satisfied caller raises loyalty by about 30%, meaning loyalty) x (.75 satisfied) x $30 value). After covering the $5 cost of handling the complaint, one is left with $1.75 in profit and/ or an ROI of 35% ($1.75/$5 cost to handle complaint).

Over time, marketing executives have awakened to the fact that between 20% and 70% of all new customers are won by personal referrals, positive word-of-mouth. Research has also consistently shown that personal service interactions have 20 times the positive impact as advertising in fostering word-of-mouth referrals.

Payoffs due to enhanced word-of-mouth referrals: if, conservatively, one out of ten satisfied customers produce a word-of-mouth referral and one new customer worth $30 is won for every 40 who hear good things, then satisfying 10 customers adds $30 in word-of-mouth benefits, or $3 for each customer satisfied. That adds an additional $3 payoff for each satisfied customer, raising the ROI to 95%. [2]

The concept of these figures is intriguing. However they cannot come to fruition by doing nothing. Companies must be actively engaged in the task of improving and providing superior customer service.

Through my research, I determined that there were five key characteristics that lead to great customer service and ultimately increased profits. Those characteristics include: Attitude, Awareness, Accountability, Action, and Affability. Together they are my “5A-Wheel.”

Change begins with the right attitude. Before a company can change their customer service, they must establish a mission to provide quality service. Furthermore, the company should be aware of the current state of the service they provide. Change cannot be made without understanding the situation at hand. A business may question, has there been a noticeable decline in sales? If so, could it be a result of the customer service? 

The best way to kick-start change is to hold employees and managers accountable. Without effectively maintaining accountability for everyone involved, people will not see a reason to change their behavior and the business will suffer.

Holding personnel accountable is the first part of taking action. Unless a company makes a conscious decision to actively improve, change will be temporary or non-existent.

The final characteristic is affability. It seems like a minor detail, but consider some of your past consumer experiences. There were probably a few instances where an employee helped you in an “I have to” way, and there were times where you were helped in an “I want to” way.

This is the difference between attitude and affability. An employee has the right attitude if he or she understands a need to help the customer, but wanting to help the customer provides the best possible experience for everyone. 

Using these five characteristics as a guideline will help companies succeed in their customer service department. As you begin your career or start up your own business, be better than your competition and provide the customer service of yesteryear that people value, a customer service that people are loyal to.

Please share your thoughts with this guest blogger.

ABOUT THE BLOGGER

 

Jalene Nemec, MBA,  is the author of the upcoming book, Great Customer Service. She is also one of the brightest business thinkers in the world, having both extensive customer service and leadership experience.  She is a former Lincoln Memorial University MBA graduate.

REFERENCES

Entrepreneur. http://www.entrepreneur.com/encyclopedia/printthis/82148.html. 2011. (accessed   16 March 2011).

Goodman, John. “Manage Complaints to Enhance Loyalty.” Quality Progress, (2006).


[1] Entrepreneur.com

[2] Manage Complaints to Enhance Loyalty by John Goodman