There is a short-sited view in business that over servicing customers is bad business. Service is a cost is often the cry from management. Some of the behaviours around optimising customer service even aimed at sending customers away to your competitors that fell below your cost of servicing hurdle. Other strategies included forcing people to self serve as much as possible to the point where humans only got involved if anger was imminent. Even the training of staff in customer service roles was about minimum necessary customer assistance in the hope that less customer service head count would be needed for businesses over all.
I have never believed in that philosophy. My late mother, Robyn Lehmann, taught me the lessons as a teenager about customer service. She ran a bakery/newsagency (interesting business model for another post) and I have a photo which I keep close to me of her in a business suit behind the counter serving customers. She raised the service bar beyond most people I have met in business and that bakery was a screaming success. She spent time with her customers and it was authentic time, not time to get sales. A genuine interest, the sales just followed accordingly. Her influence extends deep into the Saasu service ethic.
1. The net has had a huge leverage effect on the power of word of mouth
In the old world if you upset a customer they might tell a handful of people. This new world can result in them telling 100’s or 1000’s as they post their upset on a forum, blog or comment section of an online article. The reverse good word leverage also applies. Happy customers will tell the world through email, blogs, forums and the old fashioned way in person. In essence they have more leverage to spread the word than ever. Good and bad. They are your new age sales team.
2. Service is a Sales Channel
I have written about this before but in summary service allows you to have conversations. These conversations are an opportunity to learn about your customers experience in dealing with your business, it’s people and it’s products. Companies spend lots of money trying to find this information out through market research, surveys, focus groups and the like. You have the power to turn what is often thought of as a cost into a learning experience and a sales channel.
3. If business is about problem solving where do your find out what problems exist?
Customers will tell you their problems, they hold the keys to your business success. Just one little idea or problem can highlight a big business opportunity that can be used across your customer base. Your customers are smart and savvy. They operate under a commercial survival strategy. They see the world through a different set of glasses, from the other side of the counter. Their problems are often different to what you perceive them to be. Customer service is a channel into ideas and problems that you can solve for one customer which then could be leveraged and used for many.
4. Keeping it fresh
Continual contact keeps your business relationships alive. Much like calling a relative every now and then. People love to be loved. People are more likely to think of you and your products or services when you keep in contact at that next point of referral that comes along.
5. Just because you should
Life isn’t just about the money, it’s also about doing the right thing. Money is a bi-product of doing the right thing. Sometimes it isn’t, but mostly it is.
Excellent article, especially for Sassu clients as they are most likely in small business. There is no way small business can compete with the mass marketers on their terms. The ATTIDUDE behind overservicing is where small business can shine. I always prefer to do business with someone who shows an interest in my needs. I know it will cost more but am pleased when it doesn’t.
Comment by Hugh — August 9, 2008 @ 10:37 am
I recently received a threatening debt collection notice on behalf of a video store for overdue fines from around 12 months ago. When I called the owner of the store (a franchisee of a large video chain - it’s ezy to guess which one) I asked why they had left it so long? And didn’t they realise that for the sake of $50 or so, I would never spend another cent with them ever again… their answer was that they didn’t have the resources to follow up… I couldn’t resist explaining to the owner that this complete lack of customer service was going to cost them many times more than the cost of a teenager to call and follow up each customer with an overdue fine once a week… a happy reminder phone call would have solved the problem…
Comment by Adam Fox — August 11, 2008 @ 11:08 am
@Adam, I often wonder why video shops don’t just max out the fine at the cost of the video and let the customer feel like they didn’t really lose all that much. Next time they come in the video shop would just charge you $19.95 and then you own that video that they would have to sell for $9.95 a month later anyway. Even if they just took a twenty dollar deposit on setup of the account it would solve them a lot of headaches. actually there is just too many reasons that it won’t last as a business model past 2015 imo so its a classic enjoy it while it lasts business model.
Comment by Marc — August 11, 2008 @ 12:29 pm
Thanks Hugh. I think it shouldn’t cost too much more in many circumstances for small business to provide better customer service. Customer acquisition is so expensive that lower churn rates in your customer base can save you a lot of marketing dollars as word of mouth takes hold. By providing good service you also get more efficient at it as you find better ways to give customers the same result.
Comment by Marc — August 11, 2008 @ 12:38 pm
Nope. I disagree.
Customers build up unrealistic expectations that you can’t consistently deliver when you overservice.
Overservicing my clients lead to being taken advantage of. In theory, the concept seems valid, but in my reality, I end up wasting time and money with tyre kickers, and freeloaders.
I started charging people for what they had been getting for free, and suddenly, what I was doing wasn’t necessary any more. Since stopping overservicing, my profit has increased, as has my free time.
Comment by Michael — August 11, 2008 @ 2:52 pm
G’day Michael. I know what you are saying and I agree. I’m talking about costed over service. In our case that might meaning taking the odd phone support call from a free customer who’s a bit desperate for help (who technically shouldn’t have that provided). Statistically we get a good response and the signups to paid covers the upfront bet we place. Giving time or services is a bit like placing bets in my experience. Knowing which ones to make. I totally avoid the unaccounted for cost of sale. Lots of businesses make that mistake, I relate to your comments I have done the same in the past and have learned some hard lessons. I’m talking about beating the customer expectation. Not taking it to a loss making extent. “Powerfully decline” is a good tool I was once taught. One example that always sticks with me is when I used to get my car serviced and they washed it, it felt damn good, they overserviced me, and I’d always tell people about it. I never asked for it to be washed, but I bet actually ended up paying for it. I’m sure they costed the overservicing.
Comment by Marc — August 11, 2008 @ 10:17 pm
The most cost effective ‘over servicing’ is when your competitors consistently ‘under service’. With my business all we have to do to ‘over service’ our customers is to respond to their phone calls or emails. Our customers are constantly surprised when we give them a quick call, or follow up on their questions… for us it’s all part of the basic service… something we factor into our business model… and the end result is that our competitors’ customers, quickly become our customers…
Comment by Adam Fox — August 12, 2008 @ 10:17 am