“Good will is the one and only asset that the competition cannot undersell or destroy.”
Marshall Field

Dr. Alan Zimmerman’s Personal Commentary:

When it comes to starting a business or growing a business, nothing … and I do mean NOTHING … is more important than your customers and the service you give them. According to an article in “US News and World Report,” of all the customers you lose, 82% of them will stop doing business with you because of a customer service issue. Indeed, they said, price may be the least of your worries when it comes to keeping your customers.

And keeping your customers is a big deal … A REALLY BIG DEAL. According to the “Harvard Business Review,” if you could retain a mere 5% of your lost customers, your profits would increase by 25%.

To keep your customers and to keep them happy, I’ve discovered several strategies … all of which I discuss in my new book, “The Service Payoff: How Customer Service Champions Outserve And Outlast The Competition.” For starters, let me suggest the following.

1. You must understand WHO your competitors are.

Of course, you may think that’s a rather silly strategy. You may think your competitors are more than obvious. But I beg to differ. Most people have no idea who their competitors are.

For example, if you’re a manager who reads management publications, and if only read articles describing practices in organizations similar to your own, you DON’T understand WHO your competitors are. If you think you’re wasting your time reading articles describing different kinds of businesses and what works for them, you DON’T understand WHO your competitors are.

Your competitors are NOT limited to companies in your industry, of a similar size, in your geographic area. Actually, YOU’RE COMPETING WITH EVERY SINGLE COMPANY OUT THERE.

Yes, Disney, L.L. Bean, State Farm, your state government, the Mayo Clinic, FedEx, Southwest Airlines, GE, and every other organization are your competitors.

“How can that be?” you wonder. Simple. Your competition is ANYONE WHO RAISES YOUR CUSTOMERS’ OR YOUR EMPLOYEES’ EXPECTATIONS. Any organization that satisfies its customers or employees better than you do, no matter what type of business it’s in, MAKES YOU LOOK BAD BY COMPARISON.

For example, customers who call Land’s End to order a shirt just before they call you expect your company to react with equal courtesy and efficiency. And employees who learn how Levi’s Inc. treats its staff expect you to provide the same type of opportunities for them.

The fundamental nature of competition is changing. It’s no longer limited to the other bank in your neighborhood or a comparable store in the next town. Your competition is ANYONE YOUR CUSTOMERS OR EMPLOYEES COMPARES YOU WITH.

In today’s global economy, information is being exchanged at a very rapid speed. Your present customers and your potential customers can obtain access to a wide variety of competing products and services with the click of a button. And many times these goods can be delivered faster and cheaper than your business can offer. The only way to compete in this kind of marketplace is through excellent service that is coupled with a unique and positive EXPERIENCE.

So…

2. You must give your customers an EXPERIENCE.

In their book on “Authenticity,” Gilmore and Pine write, “Goods and services are no longer enough; what consumers want today are experiences — memorable events that engage them in an inherently personal way.”

That being the case, it is critically important that you and your company are always looking for new ways to enhance your customer’s experience in doing business with you. In fact, the better the experience you provide, the more loyal your customer will become.

Forrester proved that when he asked customers to rate their experiences with various companies. He asked them if their experiences were: 1) Useful … they got their needs met, 2) Easy … they did not experience any hassles in the interaction, and 3) Enjoyable … they did not feel frustrated or disappointed in the interaction. Forrester concluded … that regardless of the industry … customers buy more and stay more loyal when they scored higher on his customer experience index.

Starbucks seems to be one organization that has mastered these three elements of a great customer experience … Useful, Easy, and Enjoyable. That’s why so many customers purchase their coffee at a Starbucks store rather than the gas station across the street. The result is an extraordinary buying experience that customers cannot get at the gas station. So they don’t mind paying a much higher price just as long as they get the Starbucks experience along with their coffee.

Starbucks takes pride in creating an amazing buying experience for their customers. Sometimes, this experience comes in the form of new product offerings … encouraging their patrons to sample some of the new items instead of their regular orders. However, their employees are also quick to detect when customers do not enjoy a new item and are very comfortable in allowing them to exchange the unfamiliar product – even before their customers express their dislike of it.

Starbucks’ dedication to exemplary customer service … and providing a unique and positive buying experience … has, without a doubt, been a leading cause for their growth and profitability. Their service is also part of the reason why Starbucks has single-handedly changed the way coffee is served around the world, and it’s part of the overall business concept that has been duplicated by many other coffee shops and businesses in various sectors.

But even in the best of businesses offering the best in customer service, there will be complaints.

3. Don’t trivialize complaints.

Many companies do. They’ll say, “We don’t get that many complaints.” Well, of course not. The research has well established that only 2% of your unhappy customers will actually tell you about their complaint. The other 98% simply slip off to the competition.

And is that a big deal? You bet. Take a big company with 4 million customers, for example, where each customer spends $100 per year, giving the company a projected revenue of $4 billion. Industry standards show that approximately 30% of a company’s customers (or more) have poor experiences, and many of them will defect to the competition. In conservative terms, that means that company will lose hundreds of millions of dollars each year in revenue that they will have to make up somewhere else.

You can prevent many of those defections if you DON’T trivialize customer complaints. Etiquette expert Miss Manners (a.k.a. Judith Martin) says this phrase should be written and mounted by every cash register, every telephone, and every internet connection in the business world. Miss Manners says there are two reactions customer service reps can give to any complaint they hear. “The first is, ‘This is an outrage. I can’t understand how this could happen. I want something done about it right away.’ The second is, ‘There, there. Mistakes happen. It’s really quite all right.’”

As Miss Manners goes on to say, “If a business says the first thing, the customer will say the second. But if a business takes role number 2, the customer will take role number 1.” In essence, customers take complaints in stride when a business reacts strongly. They become outraged when a business trivializes their complaints.

Of course, every business is bound to have its share of bleak moments where they have fallen short in the area of customer service. However, the great companies embrace the criticism and change accordingly.

Joseph Michelli tells of some of these moments in his book “The Starbucks Experience.” During the terrorist attacks on the World Trade Center on September 11, 2001, a Starbucks store in the area took a payment of $130 for three cases of bottled water that an ambulance worker was trying to get for the survivors of the attack. An e-mail circulated shortly thereafter, criticizing the store for taking payment in such debilitating circumstances.

When the e-mail reached Orin Smith, the Starbucks president and CEO, he immediately issued a $130 check to the ambulance worker and called the ambulance company to personally apologize. Independently, Starbucks stores in the Ground Zero vicinity operated around the clock providing free beverages and pastries to the Ground Zero volunteers and rescue workers.

The company could have made an excuse by highlighting the fact that it had already made millions of dollars’ worth of donations at the corporate level towards the September 11th catastrophe. Or it could have made a scapegoat out of the employee who rang up the register transaction for the $130 worth of bottled water. Instead, Starbucks owned the mistake and was determined to fix it in the most positive way imaginable.

One final thought: As the quality of products and services becomes more and more standardized by customer demands, as price points inch toward an even balance between competitors, customer service becomes one of the few things that is still left to set you ahead of the competition.

Action:

How can you make your customer service a TRUE EXPERIENCE?

Make every day your payoff day!

Dr. Alan Zimmerman
Tel: 800-621-7881
E-mail: Alan@DrZimmerman.com

Posted by Special Nodes on 13 September 2010

NB: This series is a guest post by Mark Tiden, co-founder of Conducive Technology and a creator of FlightStats.

It seems that every other press release these days is about another corporate travel agency announcing a mobile itinerary strategy.

Agencies are under enormous competitive pressure to “check the box” of a mobile itinerary strategy as their customers increasingly expect mobile capability.

While even the simplest mobile itinerary viewer offers some benefit to the traveler, many of these partnerships appear to be more of a tactical reaction by the agency to the competitive pressure instead of an integrated customer service strategy that includes a smart mobile offering.

In some cases, re-branded or co-branded consumer itinerary applications may actually do more harm than good for the agency.

Many applications rely on confirmation email parsing that makes itinerary changes difficult to handle. Most don’t include any significant reporting capability, and may even encourage out-of-policy booking behavior.

In addition, these applications usually don’t do much to improve customer service and offer no opportunity to the agency for incremental revenue.

However, if they are part of an integrated customer service strategy, smart phones and mobile itinerary applications represent a real strategic opportunity to dramatically increase the agency’s relevance and value on the day of travel as well as before and after the trip.

An integrated strategy can help minimize leakage, promote policy compliance, encourage productive engagement with the traveler, and provide full global visibility and reporting to the agency and corporate travel manager both during and after the trip.

A strategy that addresses these key components would be a success by any measure.

However, smart mobile devices also offer an opportunity to deliver new high-value services on the day of travel that create new revenue opportunities for the agency.

So what does an integrated customer service strategy that incorporates mobile look like?

Of course, there will be differences between agencies and corporate customers, but let’s consider a few common elements of such a strategy.

Part One – Direct itinerary capture and processing

Integrating a mobile device into the overall customer service strategy begins with reliable and efficient itinerary capture and change management.

While constructing the initial itinerary from parsed emails is simple (though somewhat unreliable) and doesn’t require virtually any IT investment, changes to the itinerary are difficult to manage—even when they are made by the agency.

All-too-common travel disruptions can often mean that the agency, the mobile device, and the actual travel itinerary are out of sync. In addition, a static itinerary viewer does nothing to help the traveler deal with these disruptions.

Consumer itinerary applications with email parsing often strip all agency branding from the itineraries as well, effectively cutting the agency out of the traveler’s day-of-travel experience.

Look for a solution that includes a direct connection to the agency’s mid-office or QC systems or to the GDS used by the agency.

An ideal system also makes it very easy for the traveler to report a change to the agency and have their agency itinerary updated outside of these systems.

Imagine a traveler being able to select an itinerary segment on the mobile itinerary application and generate a message directly within their itinerary application that informs their agency that the airline has re-protected the traveler on the selected segment.

The application picks up most of the relevant details including the date, origin and destination from the itinerary and all the traveler has to do is report the new flight number.

The system can then update the itinerary within the monitoring system to reflect the changes so that all monitoring and messaging is on the updated itinerary.

The agency remains in the loop and relevant, even when changes are made outside of the agency’s control.

In addition, security systems for traveler tracking can also receive the updates from the itinerary monitoring system so that travelers don’t fall “off the radar” when trip disruptions occur.

NB: This series is a guest post by Mark Tiden, co-founder of Conducive Technology and a creator of FlightStats.

If you do things right in social media than one can capture 1.5 million loyal followers (JetBlue on Twitter).

Yet, companies can also stub their toe in the world of social media as evidenced by the YouTube success of United Breaks Guitars and Kevin Smith’s quarrel with Southwest Airlines.

Some items are beyond your control no matter how good you are at social media. However, there are a few to steps give you the best chance for success in the social media travel world and to increase sales.

social media escalator

As showcased in the diagram, the four steps are:

1. Listen – to your customer and conversations around your brand.
2. Interact – Join the conversation.
3. React – Adjust your services based on feedback.
4. Sell – If you Listen, Interact, React, this will happen with less effort.

Companies often enter the social media fray and jump straight to step four, selling. This is the worst thing you can do, and it won’t be effective.

You need to start with step one, which is listening. Without listening, the other three steps won’t achieve any degree of success. As many have said before me, there’s a reason we have two ears and one mouth.

After listening, then you have the appropriate baseline and credibility to join the conversation.

Imagine if you were at a housewarming party and walked up to a group of four people who were already engaged in a conversation and said, “I’m not sure what you are talking about, but here is what I want to talk about.”

You don’t want to be “that girl” at the housewarming party and you don’t want to be “that girl or company” in the socialsphere.

Many get the listening and interacting correct, but then they commit a terrible crime. They don’t do anything (react) based on the suggestions and information gathered?

If 90% of the people complain about a certain aspect of your hotel, airline, etc, it’s imperative that the issue is resolved, and resolved promptly.

If 90% of the conversation is centered around certain aspects of the hotel or customer service that people love, then it’s imperative that this information is placed in the appropriate hands (PR, production, sales, customer service, etc.) – let’s make sure we do more of this! Everyone loves it.

We won’t touch on selling too much, because if you do the first three steps well (Listen, Interact, React), then the selling will happen with a proper push here and a prod there.

Notice in the diagram that the steps for the customer then happen in the reverse order of the company. This is huge. It’s these steps that the customer takes within social media that give an exponential return (good or bad).

If it makes it easier to grasp, you can consider the following as steps 5, 6, 7, 8. This is where the magic can really happen.

* Listen: The customer books the reservation from the selling company. The customer’s first step is to listen for what to expect (important expectation setting here). What is the value that will be delivered? What experience can I expect?
* Interact: The customer will then travel.
* React: During or after this interaction, the customer will react according to his or her experience (good/neutral/bad).
* Sell: The consumer’s reaction to the experience will determine if they sell for or against (the company/airline/hotel/cruise line). Keep in mind if it’s a negative reaction, you still have a chance to correct the situation by interacting and reacting.

That’s the beauty of social media. As a company, if you appropriately engage in the four steps, then the stairs in the diagram act more like an escalator (pun intended) rather than a traditional stairway (ie. Social Media Escalator).

It will create a positively circular motion, which, with the appropriate greasing (effort), will continue to take your travel offerings to the top. And that is the true beauty of Socialnomics.

The best strategy in social media is a simple one. Always remind yourself of the fundamentals.

NB: This article is written by Erik Qualman, author of Socialnomics. His book is available on Amazon.
as published in PAII Innfo Newsletter