I am a Customer. We all are. And we all can tell the difference between good and bad customer service.
Bad customer service takes a toll on companies. It may not be evident right away, hidden underneath internally driven metrics, but it will eventually impact the bottom line. In the long run, it may result in loss of market share, even if revenues grow due to an expanding market, or it may surface in the cost of serving Customers, or become evident in increased product returns. However it may manifest itself, it will show exactly where it hurts the most: the profit.
When companies don’t fix customer service issues, Customers simply bring their business to competition. By the time the company actually feels the pain, frequently it is too late to learn from mistakes and engage the lost Customer, so what's left is attempts to rationalize what happened. Too often, this leads to the implementation of internally driven corrective actions that, eventually, lead to further Customer alienation.
While Customers leave when exposed to bad customer service, they don’t necessarily stay when service is merely good: loyalty can only be built on superior Customer service.
So what is the difference between bad, good and superior customer service?
Bad customer service frequently is the results of lack of process and demotivated customer service reps. We all experienced frustration with customer service reps being unable and/or unwilling to understand and resolve an issue with defective product, incorrect billing or any other issues that inevitably happen in any company and any industry. Bad customer service is frustrating and sometimes plain enraging.
Good customer service is built on process, and it often starts with a script that customers service representatives read off their computer screens. Those scripts are not enough, though. When the phone rings, some other key elements must in place and ready to be deployed:
Active listening – The Customer has an “issue” that needs to be addressed. I like to call it a “question”. A question needs an answer. An answer is built on understanding. Understanding needs active listening. Active listening means paying attention to what the Customer has to say and engaging in clarifying questions and answers, until both parties have a common understanding of the situation.
"Bad customer service takes a toll on companies. It may not be evident right away, hidden underneath internally driven metrics, but it will eventually impact the bottom line."
Technical knowledge and empowerment – The customer service representative must be capable and empowered to address most “questions” right away, during the first call. For many companies, even the ones with sophisticated technology offers, 80% of the calls are about known and recurring situations. For that 80%, a strong knowledge base at the fingertips of the customer service rep is a must. Technical knowledge and empowerment allows the customer service rep to immediately find a path to resolution. A clear understanding of “what” will be done and “by when” immediately alleviate some of the Customer apprehension. Some Customers are technically savvy or curious enough to also want to know exactly “how” their needs will be addressed. Regardless of the Customer's expertise, most can tell if a customer service representative is knowledgeable and has the authority to address the issue. The remaining 20% of new or rarely occurring situations should be immediately identified and transferred to a level II customer service. And it has to be one transfer, not a game of bouncing across level II, III, IV and V over a period of days or weeks.
Level II customer service must be an expert who knows both the offer and the specific application. Besides addressing the issue at hand, level II is the best opportunity for a company to engage the Customer in developing exactly what is needed, by learning how the product functions in every day use. There really shouldn't be level III and beyond, as too many layers alienate the Customer.
Delivery and follow up – Once the resolution is in place, the “what” and the “by when” create clear accountability to deliver on the promise. And there absolutely has to be a simple follow up call. While email or any other form of indirect communication are good in non-problematic Customer service interactions, they miss the opportunity to engage and delight a Customer whose issue has been resolved. Differently, a call allows full understanding of whether the Customer is happy, and therefore brings positive closure.
This is good customer service: a sophisticated, yet streamlined back-office process that helps the customer service reps to consistently deliver what the Customer needs through an engaging, swift, comprehensive and conclusive interaction.
Superior Customer service is much harder to identify, as it requires a deep understanding about how Customers think.
Several years ago I was planning a visit to a Customer. As always, I pulled out the stats to see what our performance was. All our numbers were good, except for our share of wallet: the Customer was bringing the bulk of his growth elsewhere. With a room full of friendly smiling faces, the meeting started on a positive note. After all, our sales were up and new products were flying off the shelves. At some point, I candidly asked the question: why was our share of their business going down? The room froze. I had broken the pleasant atmosphere, but it had to be done.
The Customer CEO smiled and took the lead. “I am glad you asked the question”, he said, “this means that you really care about our relationship”. The room was in a state of suspense. “Truth is, we are on a path to aggressive growth”, he continued, “and growth is tough. We need the best partners, the ones that care to go there with us”. He paused. It was a hot day, windows were open and two flies roaming around the room stopped and seemed to stare at him like the rest of us. I was not going to move on, until I got all of it. Even the flies knew that.
The CEO looked at me with resolution and said: “we do not feel that your company has that drive”. That was it. We were missing out on growth because our service was good but not great: we always delivered as expected, but, in his eyes, we were unfit for the difficult journey of aggressive growth.
Superior Customer service requires genuine willingness to go an extra mile. It starts with the process and all the key components of good Customer service, and it builds up with people who are truly interested in helping the Customer - people with strong emotional intelligence.
Interestingly, many companies try to bring process to emotional intelligence. And that just annoys Customers, to say the least. How many times have we heard infinitely apologetic customer service representatives that do not care about helping? They will use formulas and keywords like "I am sorry for the inconvenience this has caused you," without really meaning what they say.
"Superior Customer service is the ability to consistently deliver a memorable experience; the best companies know how to help the Customer when is mostly needed, every time."
In an effort of delivering a unique experience several years ago the Ritz-Carlton launched a Customer-focused campaign. Customers felt the difference immediately: within weeks from the launch of the program you could not meet an employee that would forget to say “my pleasure,” to everything they did for you. It was bizarre and felt rather artificial. After a while “my pleasure” became a subject for amusing conversations among patrons. That said, the campaign was largely successful, because with the words came the empowerment to address anything the Customer needed. “My pleasure,” takes a whole different meaning when the employees are empowered to show that they really care through their actions.
Once, after traveling for 24 hours I could not wait to check into my hotel room and rest. It was a nice Ritz-Carlton, people at the reception desk were welcoming and the room was great. After resting for a few minutes I realized that I had left my phone on the plane. Total panic hit me. It was just about the closest thing to the end of my world: the smartphone was practically attached to my body, and I probably could hardly function without it. I checked the time. It was 45 minutes after landing: the plane was probably being serviced before the next flight. I called the concierge. The employee listened, understood, planned a course of action, swiftly executed and closed the loop with me once the issue was resolved. That was good Customer service, right? There was something else that made it great - the fact that he showed me how much he cared.
The concierge understood how much the smart phone meant to me: my entire business life was there and I was traveling on business. He felt my apprehension and he cared not only to help me resolve the problem but also to make me feel good throughout the process, by keeping me informed through every step. He called when he was on his way to the airport, then when the airline located the phone, then again when the phone was securely in his hands. In less than two hours he personally delivered the phone to me, replying to my innumerable thanks with a smile and the usual “my pleasure." I replied with a big smile. I was speechless: I had just experienced superior Customer service in my moment of dire need.
As I rested, tightly holding the phone in my hand, I recalled the experience with my Customer’s CEO. His business was growing and he knew that it was not going to be easy, that something would happen along the way and that he needed a supplier to help him in the most difficult moments, every time.
Superior Customer service is the ability to consistently deliver a memorable experience; the best companies know how to help the Customer when is mostly needed, every time.
So, why is superior Customer service so important? Because it delivers higher profits. For example, Customer acquisition costs are frequently hidden, but are a high fixed upfront expense. Keeping Customers happy creates loyalty. The more loyal the Customer, the lower is the impact of the acquisition costs per transaction, which translates into a positive impact on margins.
I will always be thankful to the Customer that took the time to teach me this lesson and to the concierge that made me feel how true it is.
Sergio Corbo is a commercial senior executive who helps fortune 500 corporations serve the Customer and deliver measurable results to investors. You can follow his thought leadership at www.linkedin.com/in/sergiocorbo