In This Chapter

True or false: good customer service starts with how you treat your employees.

It’s true. Engaged, mission-driven, motivated employees are the key to providing outstanding customer service. This fact assumes tremendous importance when you realize that, for many small businesses, the quality of the customer service is all they have to compete on!

Today, we see huge companies such as Comcast using Twitter to improve relationships with customers. Using the Twitter handle @ComcastCares, a team of employees at Comcast monitor Twitter for all conversations about Comcast. The minute a complaint or problem arises, a Comcast rep jumps in to help resolve the problem. Comcast—and countless other companies—also join in the general conversation using Twitter and other social media tools, thereby creating a personal connection with their followers.

In this chapter, you will learn that best practices in customer service are not just about managing individual problems when they arise but also and most importantly, building a team that truly cares about maintaining good relationships with your customers.

Herb Keller, the former CEO of Southwest Airlines, knew all about the importance of the team. He once commented:

Too often, businesses lose sight of the fact that an unhappy employee eventually transfers that unhappiness to everyone he or she comes in contact with—including customers. When customers call or walk in the door, they expect to be treated with consideration and respect and encounter a polite and friendly person on the other end of the phone or across the counter. Whether we realize it or not, the most meaningful customer service training our employees receive for these interactions comes from their own interactions with us.

If you do not treat your employees well, how can you expect them to treat your customers well? If you take care of your employees, they will take care of your customers. If you don’t, they won’t. It’s really that simple.

Your employees are a direct connection to your customers. If you have not made and followed through on meaningful commitments to them, they will not be committed to your customers. It follows that you must treat your employees in exactly the same attentive and respectful way you want them to treat your customers.

Above all, you must be ethical, honest, and aboveboard in your interactions with your employees. The ability of your employees to interact ethically (and legally!) with customers is directly tied to your own personal character and to the way you handle the various judgment calls that arise within your team. Whatever issues arise internally, once your team learns that you will address those issues fairly, ethically, and honestly, that standard will carry over to your employees and to your company’s relationships with customers.

Establish a vision of customer service for your employees. Your vision of how you treat your employees—how you will serve them—should include the following elements:

As a best practice, survey your employees regularly to ensure that you (and other managers in your organization) are meeting their needs. If an employee brings a problem to you, treat it as seriously as you would if you heard about a problem from an external customer.

As a small business owner, it is much easier for you to keep your employees engaged and to recognize issues that could turn into major problems for your business than it is for larger businesses. Keep that personal connection with your employees, regardless of how large you grow your business.

We know of one small business owner who treated his employees poorly. He denied vacation requests, talked about employees to other employees, bullied employees who weren’t working to his satisfaction, and generally took every opportunity to display disdain for the people who worked for him. Needless to say, this attitude carried over to his employees’ interactions with customers.

On one occasion, the business owner cut back on the quality of a product. He then told employees that, if a question came from a customer on product quality, they should tell the customer no changes had been made! We know of at least one employee who specifically told a customer he wouldn’t buy the product himself because the quality was poor. The company eventually went out of business.

That business’s failure was, before anything else, a failure to serve the company’s internal customers: its employees. Don’t let that happen to your organization!

As a best practice, consider brainstorming with your team to draft a written agreement. This should be an agreement between you and your employees that identifies exactly what employees can expect from you and what you expect from them.

Good customer service in any given situation is not instinctive. It must be learned and practiced. Provide your employees with training on how to interact with customers and handle stressful customer situations. Empower your employees to make decisions for the benefit of the customer. When employees can make some decisions on their own, they will become more confident in dealing with customers.

One best practice you can adapt from the hospitality industry is to give each frontline employee a certain dollar limit within which he or she can operate autonomously to make good decisions on behalf of the customer. You and your team must identify what that limit is, but for the sake of argument, let’s say it’s $300. That means that your employee has the discretion to improvise a solution to solve any customer issue, as long as doing so costs less than $300. Solutions with higher price tags must be approved by the employee’s manager.

Your vision of customer service must be the same as the customer’s vision. By working with customers directly and understanding their needs and their expectations in working with your business, you and your employees will be better able to determine expectations around customer service and align your organization with those expectations.

Your company’s stated mission must emphasize the values that support your customers. The more customer-service focused your business, the more likely you are to step ahead of the competition.

Let’s look at an example. The online retailer Zappos is well regarded as having excellent customer service. They provide a 365-day return policy and offer free shipping for returns. On its website, the firm talks about Zappos Family Core Values (http://about.zappos.com/our-unique-culture/zappos-core-values) which includes “Deliver WOW Through Service.”

Zappos regularly trains its employees in customer service and rewards them publicly for a job well done. The company empowers employees to resolve as many customer problems as possible on the spot without going to a higher level.

The result: Zappos continues to grow and prosper, and their customers are loyal, often referring other customers. Nothing Zappos is doing or has done is exclusive to larger businesses. You can build the same core values into your business regardless of its size. It’s all a question of relationships, internal values, and your own willingness to communicate.

Talk with your customers regularly to determine how well you are doing at serving them. Whenever possible, hold in-depth discussions with them, either in person or over the phone. If you have a storefront location, ask your customers at the point of sale (POS) if they received the assistance they needed. Ask if you can contact them later to inquire about their experience—and get their e-mail address or phone number.

Consider sending a customer satisfaction survey to your customers on a regular basis. Include questions asking how satisfied they are with …

In addition to finding out whether your customers are satisfied, you want to determine how loyal they are to your business. Loyal customers translate into increased profits. It requires a bigger investment to get a new customer than to sell to returning customers. That doesn’t mean you don’t need new customers, but don’t forget about your current customers. Additionally, customers who are happy with you and repeatedly purchase your products and services are more likely to refer you to someone else and are less likely to be enticed by special offers made by your competitors.

To determine customer loyalty, ask your customers in the satisfaction survey if they would buy from you again and why or why not. Also ask if they would recommend your products and services to others and whether they enjoyed the experience of working with your business.

Remember that just because a customer is satisfied does not mean the customer is loyal to your business. Satisfaction and loyalty is not the same thing. Remember the Zappos core value mentioned earlier: “Deliver WOW Through Service.” What are you doing in your business to stand out from other businesses offering similar products and services; what is the WOW you provide your customers?

Customer surveys, when done properly, provide you with a wealth of information, including the following:

We talk more about customer surveys in Chapter 19.

Consider creating a customer council consisting of a cross-section of your best customers and meeting with them at least twice a year. Use these meetings to learn what’s going on in your customer’s world, what new products or services they would like to see from you, and what processes need improving from their point of view. You can also use this time with your customers to tell them about what’s on the horizon for your organization. As with any good advisory group, you will want to ensure that what is discussed in your office stays in your office; you might want to have members of your council sign confidentiality agreements.

We look more closely at how to create and run such councils in Chapter 17.

Your formal customer service policies should include the following information:

On your business website, include a “Frequently Asked Questions” section that the customer can refer to. If possible, include a variety of ways for people to reach customer service representatives, including e-mail, phone, fax, or other methods.

Avoid outsourcing customer service functions to people who don’t understand or buy into your company’s mission or share its values. The person who answers your service line or responds to a customer e-mail can be located in Mumbai or Minnetonka, but he or she must be part of your team and share the same core values you are using to create a positive service experience, both internally and externally.

As part of your formal customer service policy, let your customers know they can expect easy access; respectful, courteous treatment; and a speedy resolution of issues.

Your customer service policy should be focused on ensuring that your customers’ needs are met in the most friendly, professional, efficient, and effective way possible. The better your customer service, the more likely you are to retain customers and get leads to other customers.

Consider having a customer relationship manager on your staff. Individuals in these roles need to be customer-focused people who are personable, friendly, helpful, and always have a good attitude. They should be employees who genuinely like other people and can handle stressful situations and upset customers.

A customer relationship manager may have the following responsibilities:

The customer relationship manager should be the main point of contact for your customers. The individual in this role should establish a close working relationship with customers. In this way, customers feel comfortable working with that person. When problems arise, customers will be more likely to bring them to the individual’s attention immediately (rather than letting the situation get worse) because they have established a relationship. Your best customer service person should be assigned this role.

You may want to offer special deals that help your customers to get to know you by trying out your product or service at a special first-time rate. However, be careful with such special deals so you don’t set any unwanted precedents on pricing or on discounting in general.

Let’s look at two situations based on real companies. Both are small training firms. In the first company, when the owner meets with a potential customer for the first time, he spends time learning about that customer and her challenges to determine if he can assist her in addressing those challenges. If he sees possibilities, he offers his services at a heavy discount for her to try without having a significant impact on her budget. For example, a potential new customer was considering offering some additional professional development workshops for employees. The owner of the training firm offered to run one of his professional development workshops—a three-day course of the customer’s choosing—at a 65 percent discount for up to 15 employees so they could try it out.

This business owner spends time with potential customers beforehand to ensure he understands what they want to get out of the workshop, thereby effectively customizing it for them. He makes it clear that this is a one-time offer to enable them to see how he works with his customers relatively risk-free. He has been very successful with this approach.

The other business does things a bit differently. This owner frequently feels pressure from competitors. Rather than selling new customers on the value of his professional development workshops and determining how he can best meet customers’ needs, he competes on price alone and will make customers an offer to run a workshop at a significant discount (sometimes up to 50 percent) if they will select his workshop over a competitor.

A few things happen regularly to this owner. One, the customer simply says no because they don’t see the value of his programs (he never talked about the value!); or two, they run the program and then never run another training program with him because it did not address their needs; or three, they run the program and then demand that same discount going forward to continue to do business. This is not a successful approach.

In Chapters 3 and 5 we discussed the need to understand your competition so that you effectively differentiate yourself and stand out from the crowd. This is not a one-time task.

As your business continues to grow, you’ll need to continue to monitor the competition and determine where you stand in relation to your competitors. In running their own small businesses, the authors have found that they frequently learn about competitors from current customers.

For example, in one situation, one of us was talking to a prospect about his needs and asked about the details of the challenges he was facing. He remarked, “Wow—I feel confident already since XYZ Company [a competitor] never asked anything about my challenges. They just assumed they knew the answer to my problem!”

Learn as much as you can about your competitors’ customer service practices. You’ll find information on their website about their policies, but also be sure to keep your ears open for what you hear from customers and others. Additionally, set up Google Alerts or scan press releases for information about your competitors and what they are up to. When you survey your customers, ask them if there is anything else you can do to make their experience better; you’ll likely hear what others are doing that they appreciate.

New businesses need to prove themselves. It’s difficult to get customers to take a risk on a new business, and you need to get them to do that so they can see the value and benefits you bring with your products and services. Offering a trial of some sort—whether it is free samples or a heavy discount—helps to get others to try you out. Depending on your business, however, this may not be easy.

For instance, an information technology consulting firm may not be able to offer a free consulting job or a heavy discount; however, they may be able to prove themselves through writing case studies of work with their customers and by demonstrating their expertise by writing white papers and posting them on their website. They might also offer free one-hour planning sessions for potential customers.

Another option for any business to attract new customers is to use the knowledge you have about your competitors to position yourself as a better choice. For example, let’s say that you want to open a fast-food restaurant franchise in an area where a couple already exist. Don’t let that sway you from your plans. Eat at the other restaurants and learn about how they treat their customers—what’s working and what isn’t—and use that information to find a way to stand out when you open your restaurant. Maybe you notice that at the other restaurants the parents seem to feel hurried (and other customers annoyed) when kids start running around the restaurant. So for your restaurant, you decide to set aside an area for kids to gather (within the sight of their parents) to watch videos, play games, and otherwise be entertained; you might even hire a clown to entertain them!

Being the new kid on the block involves a lot of work, but with a bit of preparation you will find that you can make an impact with your business.

Don’t be afraid of established competitors who have a few years or more on your business. Every other business was once where you are today. Look at Facebook as an example. When it entered the market, one of its major entrenched competitors was MySpace. Facebook came in strong and offered features and benefits not offered by MySpace. Today, Facebook is the dominant social networking site.

Small businesses frequently need to compete against much larger companies. Your organization’s ability to deliver personalized customer service may be your best, and perhaps only, differentiator.

As a smaller business you can learn about your customers more easily and be on a first-name basis with them. Suppose you’re a retailer. The next time Mrs. Smith walks through the door to make a purchase, ask her about her grandchildren or whether she had a nice holiday. You really are building customer loyalty with such exchanges! If you can build strong enough relationships, you won’t need to compete on price.

Respond to your customers’ requests to carry certain items or place special orders for them and you will find you have a customer who will keep coming back. For example, if you run a specialty food store and you know that one of your customers likes to purchase fresh figs and olives, e-mail that customer as soon as you get some in and set aside some for him or her to pick up.

By being creative and innovative in your customer service and the products and services you offer your customers, you will find that you can hold your own against established competitors. Smaller businesses should consider a niche market to compete with the big chains. You may offer fewer, more unique products. For example, a small gift boutique may compete by offering handmade crafts from local artists and even courses taught by those artists.

By gaining customer loyalty, you can ensure your competitive positioning in the marketplace even if you are surrounded by competitors. While pricing may seem to be a big driver for many customers, as long as pricing is competitive, customers will factor in the quality of your and your competitions’ customer service when deciding where to spend their money.

Develop a positioning statement for your products and services that helps you to market, sell, and support your offerings to customers. You should create positioning statements for each new product or service you introduce into the marketplace.

Positioning statements are used to develop sales and marketing strategies, but they must also be well understood by everyone with front-line customer service responsibility. In essence, they represent your company’s promise to the customer. Keeping that promise must be a critical priority for your customer service people.

A position statement for an organic pet food store might sound like this:

Many people prefer positioning statements that are considerably shorter. For instance:

Some famous one-sentence positioning statements that have stuck in the minds of consumers include Timex’s “It takes a licking and keeps on ticking” and Ivory Soap’s “ percent pure.” Use these examples as inspiration for developing a catchy, concise positioning statement for your product or service.

When creating your positioning statement, call on employees to help in the process. Those employees who work with customers on a daily basis will be able to help you position a product to best meet your customers’ needs.

Positioning statements must be grounded in reality; they aren’t based on what you’d like to see but rather what actually is the case. Take these best practice steps to develop your positioning statement:

Remember that positioning statements are not static. As you update your products and services, move into new markets, and serve new customers, you’ll need to update and refresh your positioning statement. Southwest Airlines, for instance, has gone through many such statements. One was, “You are now free to move about the country.” FedEx is still generating a market advantage from a positioning statement that now applies only to one dimension of its multi-tiered business model: “When it absolutely, positively has to be there overnight.”