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Cts Ebook 7 Secret Customer Service Techniques 1st Edition
Cts Ebook 7 Secret Customer Service Techniques 1st Edition
Copyright 2012 IntenseFence Management Solutions, LLC. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without prior written permission of the copyright owner. Applications for such permission, with a statement of the purpose and extent of the reproduction, should be addressed to IntenseFence Management Solutions, LLC in writing at info@customersthatstick.com.
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7 Secret Customer Service Techniques Every Expert Knows 1st Edition | September 24, 2012
Whats Inside...
Introduction ...................................................................................... #1: They Know Consistency is the Greatest Wow of All .............................. #2: They Believe in Invisible Systems ..................................................... #3: They Hire for Personality Over Skill .................................................. #4: They Prepare for What Will Go Wrong ............................................... #5: They Prevent Problem Customers From Hogging Resources .................... #6: They Understand the Power of Brand Deposits .................................... #7: They Value Relationships Over Transactions ....................................... How to Implement the Secrets Techniques in Your Business ....................... Thank You! ...................................................................................... About the Author ............................................................................... Photo Credits .................................................................................... Citations ..........................................................................................
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Introduction
What is the biggest hurdle to achieving hero-class customer service? For most, it is knowing where to start. We all know what great service is in the abstract. We know it when we see it; we know it when we receive it. What we do not always know is how the company made it happen. Sure, the world is full of customer service platitudes that are supposed to help: Customer service is not a department, its an attitude Empowered employees are engaged employees If we dont take care of our customers, someone else will and the list goes on. But bumper sticker-style slogans do not help us take our organizations from average to excellent. Techniques do. That is why I wrote 7 Secret Customer Service Techniques Every Expert Knows.
Managers
I refer to organizations or businesses a lot in this book, but almost every piece of advice will pertain to departments or divisions. While ofce politics, organizational bureaucracy, xed budgets and corporate policies will add unique variables to implementation, the majority of techniques will be effective in departments or divisions of larger companies.
Employees
While this book is written for leaders in charge of implementing change, it contains incredible value for employees and, in particular, customer facing professionals. Want to make change in your company? Want to stand out as exceptional? Be the person who brings one great idea from this book back to your boss. Plus, if you are reading this book, my guess is that you are going to be an owner or manager one day anyway!
Buzzwords and catchphrases are everywhere in the customer service eld. We want our service to be Above and Beyond We want to Amaze and Delight our customers We want to create WOW moments ... and each one of those concepts is important! Every time we can exceed expectations, every time we can WOW our customer, we differentiate ourselves from the competition and make strides towards earning a lifetime customer. But heres the catch: WOWs come in many different stripes.
Here are some WOWs that you might not want to hear... WOW, that was a lot different than the last time we ate here. WOW, I usually have great service here, I wonder what happened. WOW, every time I place an order with them, its like a game of Russian Roulette You see, the only thing worse than an average customer experience is an inconsistent customer experience.
In any team sport, the best teams have consistency and chemistry.
Roger Staubach
The executives we spoke with at companies that have achieved sustainable strategic service believe that instead of trying to generate individual wow! experiences for thousands of customers, the better approach is to consistently meet their customers high expectations. From The Empathy Engine (pdf -pg. 11)
The results reveal that the consistency of the trustees previous behavior is the most important element in engendering cognitive-based trust When it comes to relationships with your customers, the consistency of your companys previous behavior is the most important aspect in whether customers trust you or not. And that trust is crucial to developing relationships with your customers. Put simply, people do not do business, particularly repeat business, with companies they do not trust. So, if creating consistency is a top organizational imperative, where do we start?
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Systems Once you know what your customers expect your brand promise consistent execution begins with having systems in place to support that basic delivery of service. How does McDonalds serve millions of meals a day, hot and fast, across languages and cultures? Systems. McDonalds has systems to deliver their basic product consistently and as expected. Training Systems are a beginning, but they are only as good as the people executing them. Are cold fries and inaccurate orders served every day at McDonalds? Sure. Are there poorly run franchise locations that do not live up to McDonalds standards? Of course. Once you have the systems in place, your team must be trained to make the system work and to work the system. Team members must understand the importance of consistent execution. Consistency is the base for everything else we do in customer service. Start by establishing the service levels that must always be achieved. What are the deliverables that customers can expect every time they interact with your business? For instance... The phone is always answered in three rings The meal is always served in 15 minutes The customer is always greeted by their rst name
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Consistency is the rst secret technique because it is not ashy. No one gets inspired talking about consistency; yet it is one of the most important and fundamental aspects of great service. Oscar Wilde might have disdained consistency, but he never ran a retail store or a fulllment department.
Consistency is the rst step in competitive advantage and is the base upon which all of the other secret customer service techniques rest. Once you and your team have embraced the idea of consistency, then you are ready to take a look at systems with...
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How did they have our favorite wine at the table when we sat down? How did they know it was our anniversary? How did they remember to put a humidier in the room? Moments like these are almost always the result of invisible systems.
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base by implementing simple ideas that provide customer service that will be remembered. By managing the systems, companies turn most customer encounters into a surprisingly pleasant experience for the customer. The result is that repeat business is insured, more dollars are spent, and many referrals are gained. Invisible systems make personalized moments (like having wine chilled at your table when you arrive) possible. Invisible systems help operations run smoothly and facilitate personalization and WOW moments like we received on a vacation a few years back. An invisible system creates experiences for customers without the customer seeing the processes that led to the experience.
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We had mentioned my wifes birthday when booking the reservation over a month before. We had not asked for anything special, other than a room with a view, and did not really make a big deal about the birthday at all. We mentioned it, and that was about it. When we arrived in our room, we were greeted by this picture: My wife was blown away by the gesture, and it provided and incredible start to a wonderful weekend! (For the full version of the story, click here.) How did the Hotel Indigo manage to create such a timely and perfect impression? Systems. The hotel staff obviously had the capability to note the birthday during the reservation process and had systems in place to make sure that information was reviewed prior to our arrival at the hotel.
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You can create effective invisible systems in your organization by focusing on two important concepts: 1. Decide What You Want Your Customers to Experience Create simple wins for your business that you would like to deliver to your customers. For instance, the Hotel Indigo team might have said that they wanted a way to track their guests special occasions so that they could provide surprises that make those special days even more special. What would you like to do in your business? Do you want to know a customers order history the minute they call so that you can refer back to every transaction and customize your responses? Do you want your staff to greet your customers by their rst name the minute they walk in the door? Do you have a certain type of customer, such as VIPs, that you want to treat differently? Begin with determining your dream WOWs, then 2. Analyze Your Current Systems and Technological Capabilities Understanding your current systems is the rst step to developing hidden systems that complement them. As mentioned, we are not discussing a wholesale system redesign in this book but instead nding ways to enhance the customer experience through quick tweaks to your existing processes. In analyzing your system, ask the following questions: What capabilities does your system have that you are not using? If you are using a digital customer relationship management (CRM) system, there might be a number of features you are not currently using, for instance, tracking customer birthdays or high frequency buyers.
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Do side systems1 already exist that you are not using? Perhaps you use a digital CRM but have the ability to create a side system by color coding your customers paper les. Are there side systems that you can purchase that will complement your current systems? If your current system leaves a lot to be desired, its possible that one of the many online, inexpensive CRM systems can be of use as a side system to work invisible customer magic. Once you have analyzed what you want your customers to experience and the capabilities available to you, the next step is simple (though not always easy): gure out how to use your current capabilities to deliver those experiences to your customers. Once you have gured out how to create invisible systems to knock your customers socks off, then you just need to remember
A side system is any system outside our your primary customer relationship management system.
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had not worked. In the midst of that call, the mother struck up a conversation with the Zappos rep and relayed the story of her medical condition. The conversation struck a chord with the Zappos employee. Two days later the mother received a bouquet of owers and a get well soon card from Zappos. Needless to say, the gesture made an impression on the entire family (who, by the way, were later upgraded to Zappos VIP Members). Of course, this is not just a case of a superb Zappos employee going above and beyond. Stories like this from Zappos are commonplace because Zappos has the systems in place that allow front line associates to not only make decisions like this for customers but also to execute them. In some companies, an enterprising employee who wanted to make this kind of customer service gesture would have to ll out a requisition form that needed to be approved by three different departments. At Zappos, the systems are in place to make it happen. Customer service experts know that invisible systems are a secret weapon to amaze and delight customers. No matter what the current state of your organization is, focusing on creating invisible systems that deliver value consistently and WOW moments regularly is an investment that pays substantial dividends. Begin with the customer, gure out the systems, and then hire and train the right people to implement them. Because even the best system needs good people, as do the best organizations. And it is this belief that leads us to Secret Technique #3
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Think back on your work history. When was the last time someone took a low-energy, unhappy subordinate or coworker and changed them into an energetic, joyous employee. Its never happened, right? Im not talking about shaking someone out of a funk or lifting them out of a bad day. Im talking about trying to motivate the apathetic and trying to energize the zombied. Some people are just not built for customer facing jobs.
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Customer service experts know to hire for personality rst, skills second, because skills can be taught, but personality cannot be changed. 2
Of course, with the proper motivation, people can and do change their personality. However, external job motivation is rarely the spark that lights that re.
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And we recruit employees with such different backgrounds--teachers, musicians, artists, engineers--that there's a lot they can teach us. We've learned how to value a magnetic personality just as much as prociency. How to look for intelligence but give just as much weight to kindness. How to nd people who want a career, not a job. And we've found that when we hire the right people, we can lead rather than manage. Why have we learned to be so selective? So careful? Because our people are the soul of the Apple Stores. And together, our team is the strongest ever seen in retail. As beautiful and iconic as our stores may be, the people who create and staff those stores are what matters most.
Apple understands that it has the product, systems and training to turn the right people into great representatives for the company. Apple knows that the persons underlying personality will be a better determinant of the ability to work the Genius bar than any other factor. While your business or department might not have a line of applicants out the door like a typical Apple store, if you believe in providing hero-class customer service, embracing Apples focus on hiring for attitude as well as aptitude can make a signicant difference.
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Who would you rather have handle your most difcult client?
Someone who is patient and able to see the long term value of the client. Someone who has experience with a similar large account but thinks the clients requests are ridiculous.
Who would you rather have talking to fellow employees at the water cooler?
Someone who talks about their exciting plans for the weekend.
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Of course, the dream candidate possesses a surfeit of personality and applicable skills. Another way to look at it is
For anyone interacting directly with customers, people skills are a job skill!
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Multiple Interviewers Call it group dynamics; call it personality meshing whatever you call it, people react differently to different people. When using multiple interviews, make sure to vary who is involved in the interview process. First, this approach helps with time management for senior leaders, who should usually be brought in for the nal interview. Second, varying who is asking the questions and who is observing the interaction gives different perspectives on the interview. An important aspect of using multiple interviewers is that there should be one interviewer who is present for all of the interviews (usually the person who will be the applicants direct report). This person needs to be able to see the different ways the applicant has behaved across the multiple encounters. This is often (but not always) the person who will have the best read on the applicant when making the nal decision. Role Playing Description is not the same as action. Hearing you tell me how you will do something is not the same as seeing you actually do it. Role playing is not perfect, and it is certainly not reality. However, it is a lot closer to reality than asking what someone would do in a certain situation. Sprinkle various role playing questions into the different interview stages. You will have the chance to observe your applicants skill set in a way that description will just not accomplish. If time permits, repeat one of the role play exercises. This will show you not only if the applicant has consistency but also if the applicant gave any thought to the original interview after it was over.
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There are so many techniques to help better identify potential candidates including selective peer-involvement in the hiring process and repetitive questioning across interviews, that it is easy to get mired down. Start simply, and begin with the three techniques above. Implement them now; they can can make a HUGE difference. Are multiple interviews and interviewers time consuming and expensive? Absolutely. But it is a pittance compared to the cost of training employees who rapidly turnover. If you can cut your turnover rate in half by implementing these techniques what would that be worth? Of course, you dont have to do it alone. Numerous companies provide employment testing services and some of these companies have fairly strong records. Whether those companies are a good t for your business and are able to predict the personality traits you need to deliver hero-class service, only you can decide. For now, try the three steps above and help align the mindset of everyone involved in HR in your organization to look past the rsum and nd the person beneath the interview mask. If you hire the smile, creating a culture of great service can be easier than you think, and a culture like that is what you will need when you try to tackle Chapter 4
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If you ask any business owner or department manager, are you perfect? Is your team perfect? Is your organization perfect? They will give the obvious answer: NO. Yet, they will manage their customer service programs as if they are going to execute awlessly in each encounter. It isnt going to happen. The secret every customer service professional knows is to plan in advance for what will go wrong. How do you do this? Employ the Pareto Principle (see sidebar). The Pareto Principle tells us that the majority of our customer service issues likely come from a small minority of problems. Can you name the three to ve problems that create the majority of customer service issues in your organization? Of course you can. The Pareto Principle The Pareto Principle is also widely known as the 80/20 rule. Named after Italian economist Vilfredo Pareto, this rule of estimates that 80% of the effects come from 20% of the causes.! In 1906, Pareto observed that 20% of Italys population owned 80% of the countrys wealth.! The principle can be applied to many elds and does not always conform to a perfect 80/20 split. The Pareto principle can also represent ratios such as 90/10 or 95/5; however, the key principle remains the same that a minority of inputs results in a majority of outcomes.
But heres where the magic happens. What if you could prepare for 80-90% of your customer challenges by focusing on that small set of problems? What if your team was thoroughly trained to expect and react to these challenges in an optimal way when they occurred. You just trained your team to handle 80% or more of your challenges by focusing on a few pivotal issues.
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Rule Accretion: Rule accretion occurs when a rule is devised to x problems in an organization - no matter the qualitative impact or relative frequency of the problems. The problem with Rule Accretion is that the policies that result usually shackle employees so much that they often create more problems than the obscure circumstances they are designed to prevent. This is not to say that creating policies for an unlikely circumstance is never called for. If the issue is one of liability or safety, than the policy might be called for even if the circumstances are rare. It is a question then of balancing risk and reward. However, the tendency to overreact and create a rule for every problem should be guarded against; otherwise, you end up with bloated policies that become organizational shackles. Preparing for what will go wrong is about making choices and focusing on the few efforts that create the greatest results. The rst step is admitting that things will go wrong and that our organizations will drop the ball on occasion. The next step is guring out how we can prepare for these eventualities. If we handle them with speed and grace, we create big WINS for the customers who are looking for help. Now, lets use the Pareto principle to help us with Vampire customers in...
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Vampire customers exist in every organization. Vampire customers are the customers that suck the life out of your organization they are excessively needy, excessively demanding, and often excessively unpleasant. If your organization is like most others, than Im willing to bet that a small handful of problem customers are responsible for most of your challenges (the Pareto principle in action again). What is most damaging about these Vampire customers is not only are they often unprotable to deal with, not only do they take an immense psychological toll on your team, but they also hog organizational resources and lessen the quality of service you deliver to your best customers. Before identifying your problem customers, you rst need to know how big a challenge they pose.
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Pick a one week period to evaluate and see how close your answers are to those two questions. If your organization is like most, you will nd that it spends most of its time in reactive mode, putting out res and dealing with ringing phones. In fact, for many businesses, one of the most telling metrics in this area for most businesses is the number of inbound calls versus the number of outbound calls. The exercise is almost always illuminating. Once you see how much time is spent in reactive mode, try to take a stab at the ultimate mix for your business. Then, map out a strategy to move in that direction. The next step is to determine how much time you spend in reactive mode dealing with customer issues and how much of your reactive time is due to a small minority of Vampire customers.
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Once you have identied the customers that are draining resources and affecting your delivery of service to the rest of your customer, you need look at each case and to ask two fundamental questions: 1. Is this customer such a drain on resources that you would rather not have their business than continue the relationship in its current form? If the answer is yes, then this customer is part of the Pareto minority creating the majority of problems. 2. Why is this relationship a challenge? It is important to know how much of the problem stems from the organization and how much the customer. Of course, the analysis is usually much more nuanced than such an either/or proposition. Conuences of events, bad personality matches and other mitigating factors can all dramatically be at the heart of customer challenges and are rarely the failure of any one party.
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1. Help Guide Them to a Happier Path Your customer is stuck on a road of bad experiences, combative interactions, and habitual frustration; if the customer has the potential to be a truly happy customer, you might need to go the extra mile (which you should be doing anyways) to break the cycle they are in. 2. Try a Little Tough Love I remember reading a piece about movie stars once. The author posited that there was no universal rule and that some actors maintained power in Hollywood by saying no, others by saying yes, and others by saying maybe. Similarly, some of our customers have learned that being courteous and nice is the way to get what they want. Others have learned that being rude or bullying is the best way. The latter customers will often test you until you nally step in and put a stop to it. These relationships can be fruitful but often it takes drawing clear lines and setting rm expectations to keep the relationship from devolving into something unproductive.
FROM THE TRENCHES When I rst opened one of my retail businesses, I had a couple who patronized the business regularly. Within the rst few weeks, the complaints started. On the rst instance, I comped them for the bad experience. In the second instance, after doing my best to salvage the situation, I ended up comping them again. After the second experience, it was obvious that they were taking advantage. The problems were minor ones (if true at all). The business was brand new, and they could smell the uncertainty that accompanies fear of bad word of mouth for a new enterprise. The third problem was not long in coming. Nothing I did would resolve the issue for them, and it was obvious, they were going to keep pushing until they got something. I nally told them that I had done all I was willing to do in the situation. If they wished to continue doing business with us we would love to have them, but that I would be happy to move on if they did not feel we were able to provide the experience they were looking for. Once I drew the line in the sand, the tone changed, and we kept them as customers. They still required more attention than most, but they were no longer a major drain on resources. My staff received a few complaints over the years from these customers, but nothing that ever was elevated to my desk again.
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3. Say Goodbye As you can see from the story above I was prepared to re the customer. Firing a customer is never easy; in fact, sometimes you even have to re your good customers. The key to ring customers is to make it about your inability to serve them in a way that will make them happy. Approach the discussion from the perspective of how your business is just not setup to provide the service they are looking for, give reasons why this is true when possible, and emphasize that you only want to keep them as a customer if you can deliver an excellent customer experience consistently for them. Some will not respond to this they will kick and scream until they get what they want. In these cases, just end the relationship and move on. Your team and your other customers will be better for it.
Ridding your organization of Vampire customers is not a process with a dened end. In fact, you can never completely eliminate this dynamic from your customer service. To begin, you will always have other considerations. How big is this account? How important is this person in our industry? When you cannot eliminate these customers, you are left to do your best to mitigate their impact on your operational effectiveness. Additionally, there will always be a small group of customers that take more resources than many multiples of their number combined. What you can do is work on this group so that they do not paralyze your organization from delivering hero-class service. How do you know when you are succeeding?
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When your organization feels like a proactive business instead of a reactive one. When your organization actively lls the customers experience accountsof their best customers because it is no longer focused on the many problems of the few. And it is this idea that leads us to secret technique #6 and the concept of brand deposits...
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If you viewed the interactions your customers have with your company as deposits and withdrawals, what do you think your customers balance would be? Customer service experts understand the importance of brand deposits, often referred to as brand equity. The term brand deposits was coined by Steve Jobs. Here is an explanation from the book Insanely Simple: The Obsession That Drives Apples Success. He [Jobs] believed that a companys brand works like a bank account. When the company does good things, such as launch a hit product or a great campaign, it makes deposits in the brand bank. When a company experiences setbacks, like an embarrassing
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mouse or an overpriced computer, its making a withdrawal. When theres a healthy balance in the brand bank, customers are more willing to ride out the tough times. With a low balance, they might be more tempted to cut and run. Cult of Mac The following story, originally published in my August 2012 blog post, Are You Making Brand Deposits? gives a good sense of how brand deposits work in the real world:
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I have experienced loud music at Starbucks before, but never like this. My wife and I couldnt even have a conversation. Eventually, I nicely asked the Barista if she could turn down the music, telling her that we could hardly hear each other. Its hard to describe the tone of adolescent condescension with which the Barista replied, when I can, but it was pretty obnoxious. The short end to the story: After 15 more minutes or so of unchanged volume, we left. The community coffee shop experience that Starbucks tries so hard to create was ruined that day by a poor employee. As Starbucks experiences go, it was a pretty bad one.
Heres the beauty of brand deposits. Despite that experience, the very next day I was sitting at my desk drinking my morning Starbucks. After over a decade of patronizing Starbucks, the company has built up a lot of brand deposits with me. I have received great service and great products from Starbucks, and I have used their locations as culturally acceptable locations for business meetings. I have even written quite a few blog posts at those rounded, wooden tables. That is the essence of customer loyalty. Sure, Ive had bad experiences. Ive tasted my coffee after driving away, and it was wrong. Ive had a new Barista so logjam the morning rush that Ive been late to a meeting because of it. And Ive had the staff talking very loudly with each other while I tried to enjoy a quiet coffee. However, over the years Starbucks has delivered great value, both in product and services. They have made brand deposits day after day, from the smiling, friendly Baristas to the clean, well-lit (and usually quiet) environment.
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Do more than is required. What is the distance between someone who achieves their goals consistently and those who spend their lives and careers merely following? The extra mile.
Gary Ryan Blair
Of course, Ive probably been to hundreds of Starbucks locations, and my transactions, without question, number in the thousands. The brand deposits created by Starbucks in those encounters are money in the bank for Starbucks, both literally and guratively. The brand deposits Starbucks has built up along the way by giving great experiences had accrued a positive balance in the metaphorical account. When the bad experience made a withdrawal, there were still plenty of funds left over, and I was drinking a Starbucks drink the very next day. That is the power of brand deposits.
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account. They might have expectations, they might even have second hand experiences, but they have yet to personally engage with your organization. That rst experience will determine whether the customers account has a positive or negative balance out of the gate. When the rst experience is not positive, then the customer begins the relationship with a negative balance and views your organization in a negative way. When I train team members, I refer to this as starting out in the hole. If you begin in the hole, then most of your effort goes towards climbing out of the hole. In the framework of customer deposits, your energy goes to getting back to neutral instead of to building up a positive balance. The good news for customer facing professionals everywhere is that the situation can and should be reversed. If you are able to ensure a great rst experience, if you are able to begin the relationship with a positive balance, then the true power of brand deposits can work for you.
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process, working with us as we shifted our food and audio/visual needs. Hotel Z over-communicated, making sure they answered every question and that all of the details were correct before we signed the contracts. After the contracts were signed and we had committed to the room, Hotel Z did not let up one bit. Their audio/ visual and catering staff were extra accommodating. As we approached the meeting date and questions arose, Hotel Z was lightning fast with their responses. Hotel Z provided a great meeting experience that proceed without a hitch throughout the entire morning. Then came the afternoon. The conference rooms were separated by your typical accordion-style dividers, which are not the most soundproof of wall partitions. Unfortunately, that afternoon, another group had taken the conference room next to ours. It was a group doing activities with young children with continuous cheering and screaming that interrupted our speaker. The hotel did what they could to mitigate the issue, but due to special circumstances, asking the other group to be quiet was not an option. Our hotel contact was as apologetic as she could be. They had clearly made a mistake putting the loud childrens group in the room next to a business conference. While we were not happy about how the day ended, we were not angry either. You see, Hotel Z had spent over a month building up a healthy account with us. They had been making brand deposits with us from our rst point of contact and continued to do so throughout our experience with them. We had already formed a belief that Hotel Z was a good organization that cared about us as customers, so when the noisy neighbor problem arose it was the rst bad experience in a series of good ones, and it was forgiven.
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In the language of our deposit metaphor, Hotel Z had made a lot of deposits and when there was nally a withdrawal, it only depleted the balance in the account a little bit, leaving a healthy, positive balance.
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It is so much easier to be nice, to be respectful, to put yourself in your customers' shoes and try to understand how you might help them before they ask for help, than it is to try to mend a broken customer relationship.
Mark Cuban
However, if you have no major difference between stages, focus on making your rst stage as killer as possible. Take a look at the rst aspects of the customer experience that you truly control and gure out how to WOW your customers at that stage, creating sizable brand deposits from the start.
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For instance, in the story of Hotel Z above. I was having a quick drink in the hotel bar with the speaker and some other colleagues after the event. When we asked for the check, the waiter told us that it was taken care of by our hotel contact. She had noticed us sitting in the bar, and even though she was on the banquet side of the business, she made sure our drinks were free. She found an opportunity to rell our account with a nice gesture.
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Organizations can approach customers with either a transactional or a relational outlook. Transactional approaches are most typied by the stereotype of the used car salesperson, someone who will do or say anything to extract as much advantage from a transaction as possible. The transactional view of the customer is not a view of the customer at all; it is a view of the sale itself a transaction that should be prot maximized without regard for the impact that will be felt outside of the sale. Transactional thinking is almost always short term thinking. Customer service experts know that a relational approach to customers creates bonds that are far more protable in the long run than simply maximizing the prot on a single sale. Why focus on relationships?
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Because the value of a customer is almost always never wholly realized within the connes of a transaction. Repeat customers are the lifeblood of almost every successful business. What about a business in which repeat customers are rare? Even in those cases, the customer has the potential to bring in new customers through word of mouth and, as such, has an economic value that transcends the single sale.
Another way to look at the relational approach is to understand the concept of Customer Lifetime Value (CLV). As we discussed in Understanding Customer Lifetime Value: A Non-Geeks In an issue of Community Banker magazine, Michael Guide Henshaw of MCorp. Consulting of San Rafael, CA says, It costs 5 to 6 times more to attract a new customer Customer Lifetime Value (CLV) attempts to determine the than to retain an existing one. The average cost of economic value a customer brings over their lifetime with acquiring a new customer is around $325, and payback the business. At the heart of understanding CLV lies the takes about three years at average attrition rates. recognition that a customer does not represent a single transaction but a relationship that is far more valuable than any And if that is not scary enough, studies show 60% one-time exchange. to 80% of lost customers have described No matter whether you are part of a large or a small organization, themselves as satised or very it is important to have a sense of what your customers business is satised in surveys just prior worth over the average lifetime. The closer you can get to an actual to defecting. CLV, the more clearly you can know what your pain points are when
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handling customer service issues and incentives. However, if you do not know the CLV of your customer, you can simply begin by accepting that one exists and that your customer has value beyond the sale.
Known as one of the gold standards of customer service, the Ritz Carlton has been rightly studied and dissected over the years in an attempt to nd the secret Ritz sauce. Entire books have been written just on the Ritzs customer service. One aspect of the Ritzs service that has received a lot of coverage is the fact that the Ritz empowers its employees to spend up to $2,000 to solve any customer problems without asking for a manager. Yes, you read that right, RitzCarlton employees can spend up to $2,000 per incident, not per year, to rescue a guest experience. What is interesting about this famous number is that the majority of authors who mention it leave out an equally vital statistic. You see, the $2,000 is always mentioned in the context of how important employee empowerment is to great customer service as if empowering employees to excess is the key to a protable and successful business. What the authors often leave out is this: the average Ritz-Carlton customer will spend $250,000 with the Ritz over their lifetime. Like any smart, protable organization, the Ritz did not pull the $2,000 gure out of thin air. The Ritz has studied its customer base and understands the value of the relationship with their customers and what they are willing to do to maintain those relationships. Put in that context, the $2,000 does not seem so hard to conceive. The Ritz Carlton values relationships over transactions, and for anyone who has ever stayed at one of their properties, that is no secret.
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Knowing that your business probably doesnt have a $2,000 per-incident budget for service recovery, its important to focus on how your business can use the same principle to your advantage. It begins by embracing the idea of a relational approach over a transactional approach. When businesses do not approach customers transactionally, when they do not attempt to extract every possible advantage from their customers, those businesses are rewarded with loyalty and a customer relationship that is worth far more than any individual transaction. Far more. So, now that were all on the same page and agree that developing customer relationships is of the utmost importance, how do we get started?
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Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships.
H. Ross Perot
Onboarding should be a conscious choice about the experiences you want your customer to have in the early stages of the relationship with your business. For instance, in a retail business I own, when a customer signs up with our business, the following happens: 1. They are given a surprise gift bag on their rst return visit 2. They receive a handwritten thank you card from our client services manager within a few days 3. They often receive a second thank you card from the service provider within the rst few weeks 4. They receive a call a few weeks later to see if they have any questions and to make sure they have another appointment booked The onboarding process makes sure that we have touched the client multiple times in multiple ways in the rst weeks of their experience with us. The goal is to make the client feel valued and to open up the lines of
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communication so that questions or concerns can be addressed before they grow into something unhealthy for the relationship. If you are starting an onboarding process from scratch, do not go overboard right out of the gate. It is tempting to design elaborate processes where the customer receives an incredible amount of focus and attention. Resist this temptation. Remember, if you do not currently have an onboarding process, every step you add is something you are not currently doing and are going to have to nd the monetary and human resources to implement. Never forget, these are customer service lessons for the real world! Onboarding takes time and energy. Start small and build from there.
What Is Your Current Onboarding Process? To answer this question, you simply have to ask one: What happens when customers start doing business with my company? If your answer is something to the effect of they buy something then we hope they come back and buy something else you need to work on your onboarding process!
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However, you can get very good results by adopting an 80/20 approach in this area. Where and when should you be contacting your customers to keep them engaged and feeling supported without becoming a bother? Are there key points in the customer experience where a follow up call is key? How long before a customer without contact begins to fade away, where you are not top of mind? An experience I had after moving to Florida shows how important regular and strategic customer contact is to forming a strong relationship: Soon after moving to Florida, I needed to nd both auto and renters insurance. Not knowing anyone in town, I went on the Internet and found a rm that was geographically close to me and that seemed legitimate enough. Well call it Teds Insurance. The owner of Teds and his staff were plenty nice, and I had no problems getting my insurance. But after the sale, I never heard from them again. They were there if I had a problem, but not once did they contact me proactively to see how I was doing or to check on my insurance needs. It was the textbook example of good customer service, not great customer service. A year later when I began opening multiple businesses and needing a host of insurance policies, I went with a company recommended by a business colleague in a similar business. Teds Insurance simply had not put in the effort to develop a strong relationship with me, and as a result, I went with the opportunity that was in front of me. Between multiple businesses and personal, Ive probably purchased 20 different insurance policies in the 6 years since I rst got my auto and renters from Teds Insurance, but I never bothered going back to Teds for a quote.
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Relationships must be formed, then they must be nurtured. That is where nding the optimum communication points and patterns can be essential.
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Sure, the staff at the Ritz could have spent $2,000 helping out Hurn and his son, but all it really took was some ingenuity and a willingness to make an effort to create an emotional WOW that left an indelible impression. (See more pictures of Joshie and watch Hurns video story here.) As this chapter demonstrates, customer relationships are incredibly important and can be formed and nurtured in a few simple steps. The power of relationships is our nal secret because strong, protable relationships represent the end goal that the 6 previous techniques hope to achieve. Now, that we are done with our 7 secret customer service techniques, lets gure out...
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#3 They Hire for Personality Over Skill #4 They Prepare For What Will Go Wrong #5 They Prevent Problem Customers from Hogging Resources #6 They Understand The Power of Brand Deposits #7 They Value Relationships Over Transactions Remember, just because you put a 1 by it does not mean you do not have room to improve and just because you put a 7 by something does not mean you are terrible at it. This discussion is all relative, which is why it is important to do
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Ease of implementation is key! For instance, say you want to use invisible systems to personalize some of your customer communication, but you work in the medical eld. You can do it, and you think it is important. However, due to privacy concerns, HIPAA protocols, and corporate policies you know that personalization is going to take a massive effort to implement. If that is the case, you might be better off focusing on another area for now. Analyze each idea through the lenses of organizational need and return on effort.
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Thank You!!!
I hope youve enjoyed this eBook and found as much value reading it as I found writing it. I know how busy you are, and I truly appreciate you taking time to welcome me and my ideas into your life. If you are a regular reader of Customers That Stick, I cannot thank you enough for your continued support. It means a lot to me. If this eBook is your rst exposure to our customer service content, I welcome you to the Customers That Stick community and hope that you will take the opportunities below to connect further with me and the great people who interact with our blog every week.
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If you would rather share your comments privately or have any questions on the material in the book, feel free to contact me directly at adam@customersthatstick.com Finally, please connect with me on social media, where I regularly share useful, relevant content on customer service and the customer experience.
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Thank you again for taking the time to read this eBook! I look forward to connecting with you further. Yours in service! Adam Toporek
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Photo Credits
Title page Copyright Page Chapter 1 Header Chapter 2 Header Chapter 2 Chapter 3 Header Chapter 3 Chapter 4 Header Chapter 5 Header Chapter 5 Chapter 5 Chapter 6 Header Chapter 7 Header Chapter 7 Thank You! Woman with short blonde hair Copyright mark Bellhop gentleman Women telling secrets Womens shoes Woman pointing Woman extending hand Cat Vampire man Man on cell phone Shackled hands Woman with money sign Male and Female business team Heart Electrical outlet
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Citations
Please note that these citations refer to text we could not cite using a live link. All other citations can be found throughout the body of the eBook via links. Secret Service is the implementation of hidden systems... John R. DiJulius III, Secret Service: Hidden Systems That Deliver Unforgettable Customer Service (New York: AMACOM, 2003), 1-2. It costs 5 to 6 times more to attract a new customer... Debra Cope, In Search of the Loyal Customer, Community Banker: Vol. 25 Issue 3. (2006): 24. Link to pdf