Henry Ford said 'The only foundation of real business is service'. In many companies, the customer service function sits outside of the sales channel as it is seen in some way inferior to sales. Yet customer service is integral to sales success. Without good customer service there will be no repeat sales, and repeat sales are the most profitable revenue any company can generate.
The selling process is not complete merely because the customer has stated that he or she will buy your products or services. Throughout the entire selling process, the maintenance of goodwill is important, but even more so after the purchase. Regardless of your customer's previous feeling towards your company, the experience they have after they have bought will have a significant impact on future sales. Customer service doesn't complete the sale; it reignites the sales cycle. A worthwhile maxim to adopt is: 'a customer cannot be regarded as satisfied until we get their next order.'
Whilst customer service represents the last element in many standard sales processes it could also be argued that it is the first element in a recurring sales Klantenservice uitbesteden process. Ask yourself:
- Did I ensure that the agreements reached with the customer actually happened?
- Did I attempt to up-sell?
- Did I ask for a referral?
- What records are kept and maintained?
- What feedback did I get about how the customer benefited from my product/ service?
- How could customer service be improved?
Why Is Customer Service Important?
There are a number of empirical studies on the value of customer service and the effect of repeat business on the bottom line. Frederick Reicheld and Earl Sasser said that 'if companies knew how much it really costs to lose a customer, they would be able to make accurate evaluations of investments designed to retain customers'. They found that customers become more profitable over time as increased sales; reduced costs of distribution; referrals; and the opportunity to up-sell all add to the bottom line.
Heskett, Sasser, and Scheslinger collaborated on a training programme to assist managers in understanding the lifetime value of customers and in addition advised on the importance of developing a culture whereby employees are engaged to contribute to the value chain. They postulated that employee satisfaction leads to service value which produces customer satisfaction and which in turn results in profits and growth. It is hardly surprising that happen employees produce happy customers.
What is Customer Service?
Is it just about smiling and being nice to customers? It's a good place to start but it can't just be about that.
It is generally accepted that it is very difficult to deliver high standards of customer service. Some say we have not been educated for it - it is not our tradition. This observation is often justified by stating that since late Victorian and early Edwardian times fewer and fewer people have worked in 'service'. What was a major employment sector in those days has now dwindled to almost nothing.
While this has happened, employment has increased in manufacturing, sales, administration, information technology, and social sciences. Through the years 'working in service' came to be regarded as a dead end job that nobody wanted and would only take as a last resort. As a result, the label 'service' has almost fallen into disrepute, and many people see giving service as something beneath them that lesser mortals do.
However, the truth is that everybody likes and appreciates good service.
Difference between Good & Poor Service
An often quoted but unattributed statistic is that where people have been asked the question - 'what would you say was the main difference between somewhere where you received good service and somewhere you received poor service' - in 70 percent of cases the response has been - 'the attitude and behaviour of the person delivering the service'. Whether true or not, it seems probable that if we receive poor service from somewhere we are unlikely to buy from that source again.
It is therefore reasonable to assume that good customer service does not involve the quality of the product (unless you have advertised a product as being something it is not) but the quality of the people delivering the product or service, and the experience the customer has of buying your product or service.
It is also reasonable to assume that you yourself know the difference between good and poor service and can put yourself in the customer's shoes when buying your product or service.
It should be relatively easy to establish a list of thing you have purchased in the last couple of months and determine whether the experience you had of buying was good, bad or indifferent. Obviously a lot of buying and selling these days happens without the interaction of people (e.g. buying on the web) and for the purposes of this exercise perhaps you should record those activities separately. Although it might appear simple, an appraisal of your own experience, coupled with putting yourself in the customer's shoes should provide you with a wealth of information regarding the difference between good and poor service.
Analysing Good Customer Service
Ask the customer
A simple yet highly effective way of establishing the quality of your customer service is to ask the customer. Attached is an example of a Klantenservice uitbesteden questionnaire used in a car distributor showroom (customer service questionnaire).
You might check out the set of customer service standards as determined by the Institute of Customer Service. In 2007 they conducted some research into what they believe customers wanted. The top ten responses were as follows:
- Overall quality of the products/ service
- Friendliness of staff
- Handling of problems and complaints
- Speed of service
- Helpfulness of staff
- Handling enquiries
- Being treated as a valued customer
- Competence of staff
- Ease of doing business
- Being kept informed
In 2004 the Institute of Leadership published the results of a survey with staff regarding the reasons for poor customer service. The top four reasons given were:
- 60% of staff believe that the main contributing factor contributing to poor customer service was bad line management
- 45% claim that their relationship with their line manager impacted significantly on the service they provide to the customer
- 60% felt they were not praised enough for good customer service, and
- 10% said they never receive any praise for a job well done
I have defined customer service as being:
A set of business behaviours which seek to provide superior service to existing and prospective customers; build customer loyalty and repeat business; and influence the acquisition of new customers.
The Follow-up of a Sale
A major life insurance company revealed that in nearly 60% of all life insurance lapses, the policy terminated after the second premium payment. The same company pointed out that after a policyholder makes four premium payments, lapses are negligible. The significance of these statistics is that customers must remain convinced that their buying decisions were correct or repeat purchases are likely to stop. You, through the final step in the selling process - the follow up - can influence the satisfaction your customers derive from their purchases.
Consider one of your customers whose purchases have been poor during the past year and are not likely to increase significantly in the future. Also assume that you have one highly profitable account whose purchases amount to nearly 25% of the total volume of your business. What sort of follow-up and service should you provide to each? Naturally the larger, more profitable account would probably receive greater attention on your part.
For all customers, you should analyse how extensive your follow-up should be. For most accounts, an occasional email, letter or telephone call should suffice. For more active customers you might need to make in-person calls every week or so. Customers who have made or are likely to make large purchases at some time in the future certainly deserve the best personal service you can provide.
Many salespeople are fond of quoting the Pareto Principle in regard to sales, saying that around 80% of their customers provide them with only about 20% of the total sales volume in their territories. Conversely, about 80% of total sales volume comes from only 20% of their customers.
Your principal responsibility as a salesperson is to sell products or services profitably. This should be your rule of thumb when servicing accounts. Your time is limited, but time spent with customers is often an investment in greater sales and future profits. Even accounts that are semi-active or lacking in potential might become high volume purchasers if service and follow-up activities can improve their attitudes toward you and your company.
Follow-up activities vary substantially by industry and product. At one extreme, it is unlikely that a Scout selling raffle tickets house to house during his annual fundraising will make any follow-up calls during the year. On the other hand, a retail merchant buying household products for re-sale may require regular assistance from their supplier such as inventory maintenance, merchandise displays, and co-operative advertising programmes that can be part of the follow-up. Even the Scout group will need to deliver the prizes and should publish a list of winners.
Ideas for Follow-up
Thank you communication
You are far more likely to get repeat orders if you develop an amicable relationship with your customers. Any activity that helps to cement this relationship, from a simple 'thank you' to hand delivering a substantial order, can benefit both you and your customer. A simple goodwill builder, but one far too frequently overlooked, is sending a thank you letter, card, or email soon after a sales call has been made.
You can develop a few formats and then modify to suit each specific customer and specific occasions such as moving to new premises, or even more personal such as birthdays or recovering from accident/illness. The cost and the time expended are minimal compared to the goodwill that a 'thank you' can create.
After-Sales Service & Assistance
Even if the product is not delivered in person, a telephone call or an in-person visit may enable you to help your customer with the proper use of your products. Customers who do not know how to use a purchase may blame you or the product for their frustrations and problems. Besides instructing your customers on the proper use of your products, you may also be able to point out additional uses for the items. Sometimes there may be minor repairs or adjustments resulting from faulty installation that you can correct or arrange service for. In some cases, you may create goodwill just by checking with customers to make certain that their orders were fulfilled and delivered as directed on purchase orders. You might find some of these suggestions regarding follow-up activities useful:
- Make a follow-up 'goodwill building' visit to your customers within a week after delivery of the product to make certain that the order was fulfilled properly.
- Make certain that the product is satisfactory and is being used properly.
- Offer suggestions to the customer on ways to make more effective or additional use of the product.
- Use the follow-up visit as an opportunity to obtain new prospects i.e. ask for referrals.
- Handle any complaints or misunderstandings as soon as possible and with a positive and courteous attitude.
When you make in-person follow up visits, be sure they are not 'waste-of-time calls'. Before making the call, ask yourself 'How is my customer likely to benefit from this call? What do I want to achieve?'
In some instances, you might be able to develop more satisfied customers by delivering your product in person. For example, life insurance agents frequently deliver policies in-person as soon as the contract is prepared and returned from head office. Five major reasons for this type of in-person delivery are:
- To review the features of the policy
- To reassure the client that a wise purchase was made
- To remind the client when the next premium is due in order to make the sale stay solid
- To promote the sale of additional life insurance in the future
- To solicit referred leads.
There is a double reason for after-sale selling. Firstly, the existing buyer is, and always has been, a great referral source. Secondly, some sort of professional friendship is developed which can be a future useful testimonial to a new prospective customer.