The true measure of a customer centric organization is not how well they treat you while you’re a customer, but how they treat you when you no longer wish to be a customer. Making it difficult to cancel will not win you points with already disgruntled customers. (I’m looking at you RCN and TiVo!)
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Fast Company takes a look at some customer service practices that drive customers, like comedian Lewis Black, nuts. The article includes a chart on how automated telephone systems are driving customers up a wall:
One thing is clear…the quicker you give customers access to a live agent, the less inhumane they perceive the transaction.
How important is customer service? In-store shoppers find that specialized service can make all the difference between stores gaining a customer and losing one.
According to this story from the Arizona Republic:
• One in four shoppers said they walked out of a store because of poor customer service, according to a poll conducted last weekend by America’s Research Group, a consumer-behavior research firm.
• More than half – 58 percent – of shoppers polled told the same group in November that they planned to avoid stores they perceive as understaffed.
Now, the challenge for online retailers is compounded by the fact that customers don’t even have to exert any energy to leave their stores…they just need to click a button. So what are you doing to assure online customers your store is able to accommodate their service needs?
If you’re afraid you may not be delivering the customer service experience your customers demand, now might be a good time to review these customer experience resolutions for 2008.
Baltimore Sun columnist Jay Hancock writes a provocative piece today on "The high cost of savings" where he states that providing great customer service simply isn’t enough of an incentive for consumers to stick with a brand, and that most businesses realize this and choose not to deliver quality service as a result. He writes, "What shoppers really want is a low price, and they’re prepared to put up with huge amounts of grief to get it. In the language of economics, the marginal utility of more, cheap stuff is greater for the average American than gracious service in obtaining it. Yet we reserve the right to whine."
Hancock makes an interesting argument, but there’s no shortage of evidence contradicting his main thesis. Consumers, according to a number of surveys, are in fact concerned about more than just price. And, customer service goes a long way towards securing the long-term loyalty and value of an individual.
Just yesterday, Nielsen Online released a study that finds convenience trumps price for online holiday shoppers, while a recent Harris Interactive poll found that 80 percent of U.S. adults who have had a negative experience with a company say they will never go back to that company again, up from 68 percent in 2006.
However, as Hancock points out, customer intent and customer action aren’t always the same. According to Hancock, customers often say they’ll abandon a brand after a poor service experience, only to be drawn back by low prices or promotions. Seventy percent of people keep patronizing a brand or store even after they have had a bad experience, says Richard Feinberg, director of Purdue University’s Center for Customer-Driven Quality.
Does this mean that companies should forget about even trying to provide good service? Presumably, only if they’re not concerned about the other 30 percent of consumers.
Interestingly enough, while Feinberg mentions consumer apathy as a main contributor to why companies continue to get away with poor service, his own organization cites several sources that find poor service is indeed an influencer in consumers switching their shopping behavior.
Some of the highlights include:
Seventy-two percent of the consumers who switch to a competitor did so because of customer service problems.
A study by The Forum Corporation
Only two percent of unhappy customers complain, while thirty-four percent of all dissatisfied customers penalized the manufacturer by quietly switching brands.
The study by The A.C. Nielsen Company
Sixty-eight percent of customers switch suppliers because of the indifference shown them by customer service personnel.
Tom Peters, U.S. News and World Report
Other industries have also found that there is a tie between profitability and customer satisfaction.
While there are various sides of this argument, the question remains, even if consumers don’t initially act on their impulses to abandon a brand after a poor service experience, how long can companies continue to get away with poor service before consumers actually do something about it?
And, if and/or when that happens, which companies will be in the best position to capitalize on that revolt? Those that have consistently offered quality service, or those that have taken their customers for granted by not offering good service?
Seth Godin shares a story about his struggle to resolve a customer service issue over the phone. The system at the company he was dealing with seemed designed to have him give up and get him off the phone as quickly as possible without actually solving his problem. He writes, "Most customer service organizations are architected around a simple idea: interacting with customers is expensive, driving costs down is a good thing, thus getting people to go away is beneficial."
Unfortunately, in this case, the end result was Seth feeling like he’d done something wrong, when in fact he had not.
According to Godin, "Do people who go through process and manage to prove that they are not criminals end up doing more business with us as a result of the way we treated them?" If the answer is no, you’re probably doing it wrong.
As we noted last week, many businesses are not following this advice because they feel they can get away with delivering poor service. However, it could only be a matter of time before those negative experiences pile up and force consumers to do business elsewhere.
Clearly, companies must find a balance between minimizing costs/improving efficiency and delivering quality experiences for customers that cross channels to do business.
Though somewhat under the radar, it appears as if Forrester Analyst Bruce Temkin recently launched a personal blog where he intends to cover customer experience and loyalty. His most recent entry offers some interesting suggestions on how to treat customers. As he suggests, it’s not always as black and white as the "customer is always right."
- “Right” is in the eyes of the beholder.
Enforcing a policy that’s in tiny print on the back of a sales slip may be legally correct, but that doesn’t make it “right.”
- It costs less to solve a problem than you think.
Firms build models to figure out how much they’re willing to spend to solve a customer’s problem. But these calculations typically do not factor in the downside associated with bad word of mouth and the upside associated with good word of mouth.
- The best resolution is a quick one.
If you’re going to fix a problem, you’ll get the most goodwill by doing it right away. Customer appreciate the pro-activeness and they don’t have to suffer through a period of anxiety.
- Not all customers are equal.
Don’t use the same rules for treating your most profitable customers that you apply to your less desirable ones.
- The customer is more often right than wrong.
If there’s any doubt; treat them like they’re right.
Bruce hits the nail right on the head, particularly with points 2 through 4. Oftentimes, companies do get more caught up in the immediate cost of handling customer inquiries without realizing the potential revenue or long-term impact that they could be losing by brushing off their customers. Also, identifying customer needs and status as soon as they connect with you goes a long way towards resolving their issues quickly, and delivering the right kind of service based on the individual customer’s profile and needs.
- “Right” is in the eyes of the beholder.
Multichannel integration continues to be the holy grail for most customer service organizations. However, despite recognizing this, most companies still operate their business units as individual silos that rarely intersect with one another. Why? The reasons vary. Sometimes it’s lack of resources. Sometimes it’s lack of ownership. Oftentimes, it’s the result of age-old online vs. offline turf wars. And like most wars, there can be innocent bystanders. In the case of e-commerce, it’s the customer.
At this week’s Frost & Sullivan Customer Contact Event, the challenges of integrating channels and breaking down silos are front and center. As 1to1 points out today, the challenges are ubiquitous, "from unsuccessfully disseminating information and not achieving a holistic view of the customer, to not obtaining cooperation in the culture and having the inability to optimize customer information from outside the organization.
When each channel is its own island, there’s little hope of delivering integrated customer service experiences that impact the bottomline. It’s not just a matter of changing technology, however, it’s a matter of evolving culture and process aswell. In many ways, businesses must start thinking the same way that consumers think.
Most customers don’t care about channels, they care about brands, products and services. If you offer them seamless cross-channel experiences that deliver on the brand promise they’ve come to expect, then you’re likely to have a customer for life. If you present a jarring experience that distracts customers from what they care about, then you are one step closer to losing them.
1to1 adds, "If a company’s communications channel is not integrated with the rest of the organization, then customer loyalty is at risk. Without integration, companies cannot deliver an experience to the customer that is tailored and one that they’ve come to expect."
Not long ago, Seth Godin commented on a buzzword that we’ve been guilty of using from time to time…"seamless." As Seth points out, there are certain instances where seams are important, like on a football. However, in some cases (like if you’re hanging wallpaper), seams can also be unsightly disturbances. In the case of customer experience, seams are the latter.
A study commissioned by British web hosting firm Fast Hosts was published last week, and claims that 9 out of 10 consumers say that slow or poor response from a company’s email customers service caused them anger or stress.
Unfortunately for those consumers, slow response rates are more common than you’d think. Last December, a leading research firm in the U.S. found that email response rates across a number of industries are low with 41% of sites taking three days or longer to respond to customer inquiries, or not responding at all.
While email is one approach to deflecting routine customer inquiries, lack of immediacy could not only anger your customers, but hurt your brand aswell. Creating frustrating experiences for your customers is the first step towards making them ex-customers. Avoiding frustrating your customers is the first step towards building loyalty.
As Seth Godin puts it, the first thing any customer-oriented business should be worried about is customer satisfaction.