1. Speed is critical. Customers expect a 24 hour response time. They are delighted by hearing from you within 6 hours and amazed by a 1 hour response. The faster you respond to your customers the easier it becomes to close a sale or solve a problem. Failure to return a call or email is inexcusable.
2. If you don’t have an immediate answer, quickly inform the customer that you are working on their inquiry and will get back to them soon. Then do it!
3. When responding to a customer complaint always begin by assuring the customer that you will fix their problem. This immediately removes the adversarial relationship that can lead to messy and expensive confrontations.
4. Always offer the customer choices. This is particularly important in problem situations. If you offer your customer three or more possible solutions they will feel included in the eventual resolution. Also, you will be surprised at how often the solution selected is not as expensive or burdensome as the one you thought they would demand.
5. Never answer a question by telling a customer something is “company policy.” All responses must make logical sense to both you and the customer. If you can’t reasonably explain the company policy either you need more information or the company policy needs to be changed.
6. The object of problem resolution is not to “satisfy” the customer but to “amaze” them by going above and beyond their expectations.
7. Mistakes and problems always result in opportunities to create long-term loyal customers by exceeding expectations.
8. Transforming an “angry” customer into an enthusiastic advocate is always worth the cost.
9. The resentment felt by an inconvenienced or frustrated customer can be transformed into gratitude and long-term loyalty with a small compensation offer – especially when the customer realizes that the circumstances were beyond your control.
10. Unhappy employees cannot create delighted customers.
Jeff
100% satisfaction is pareto-inefficient for most Cos. As satisfaction increases beyond a certain percentage each incremental improvement becomes progressively more expensive to achieve. In other words, 100% satisfaction is a goal that is not only very hard to achieve, but also economically wasteful. It is silly not worth it.
Whilst your ten suggestions are mostly great (un)common sense, some of them are downright dangerous for most Cos’ health. For example, #1 Response Speed has been shown not to be universally true as different customers require different responsiveness. Over-responsiveness can be as damaging as under-responsiveness. #6 Amaze the Customer has also been disproved as it creates both economically unsustainable expectations in customers and heightens boundary-role stress in front-line staff. And #8 is obviously not always the case. As anyone who has ever worked in a call-centre will tell you, not all customers are worth the effort.
Whilst I agree with the general gist of your post – Most Cos need to be more customer-focussed, not less – we really do have to move beyond simplistic management aphorisms if we are to be design and operate successful business models.
Graham Hill
@grahamhill
Graham,
The suggestions presented in this article are not theory. They are the actual principles that enabled my e-commerce furniture company to survive and thrive throughout a Recession when 40% of the American furniture industry shut its doors.
With that being said, these tips are not universally applicable. They are definitely more appropriate for start-ups and small businesses.
As the size of the company grows it becomes increasingly difficult to sustain the level of performance required. For example, take a look at Tip #10 “Unhappy employees cannot create delighted customers.” In a large call center it is virtually impossible to maintain a level of employee “happiness” and commitment that will do more than “satisfy” most customers.
The comment made regarding #6 touches upon an aspect which I had not addressed. Customer “amazement” is far more cost efficient to achieve when it is unexpected.
Once a company has reached the level of a Zappos or an Amazon where perfection is “expected” every time, the company is operating under an entirely different paradigm.
Regarding response time (Tip #1) my experience has indicated over and over again that (from a customer viewpoint) there is no such thing as “over-responsiveness.” I have never heard a customer complain that we were “too quick” in our response and I am virtually certain that Amazon has never heard that type of complaint either.
Jeff Frank, Owner
Simplicity Sofas
Hi Graham,
I completely agree with everything you say. Unfortunately I did not have the luxury of time or finances to experiment.
At the time we launched in 2007 no investors were financing new furniture manufacturers anywhere in the U.S.
Since U.S. production costs were significantly higher than those of overseas competitors,we were unable to sell our products through the conventional retail and wholesale distribution channels. As a result our only option was to establish an e-commerce website to sell directly to consumers.
E-commerce websites typically sell competitively priced, well-established brand names that are familiar to consumers and can usually be viewed in brick and mortar locations.
Simplicity Sofas’ e-commerce challenge was different. The brand was completely unknown. Our unusual custom-built furniture designs were considerably more expensive than competing products with similar functionality. There was no place customers could go to see or try out our furniture before purchasing.
We did have one very significant ace in the hole — a very unique product line that targeted a substantial market void that no other furniture company had ever been able to address.
Successfully marketing a new type of product is generally achieved through heavy advertising. That was not an option for us.
Everyone in business knows that it is far more efficient to market to existing customers than to find new ones. Simplicity Sofas took that principle several steps further than usual.
The concept is simple. Simplicity Sofas does not have salespeople or showrooms. What it does have, as a result of its “extreme” customer service approach, are enthusiastic and fanatically loyal customers who are so passionate about the company that they actively volunteer to help the company grow and prosper.
For example, since the company’s products cannot be viewed in retail stores, former customers volunteer to show off the Simplicity Sofas furniture in their homes to prospective new purchasers, and to discuss their experiences.
Volunteers are now available nationwide for 75% of prospective purchasers within one hour of their homes.
More than 50% of prospective new customers who see the furniture in the home of a volunteer eventually become purchasers.
Customer loyalty and enthusiasm has a direct and substantial financial impact on the company’s operations. At all other furniture companies, customer service is an expense, a cost of doing business. At Simplicity Sofas it is a marketing investment.
Viewing customer service as a marketing investment turns the entire approach to business on its head. For example, if a customer calls up with a complaint that her 5 year old cushions are no longer comfortable the typical furniture company (looking to minimize costs) would either refuse to do anything or try to sell new cushions.
Simplicity Sofas’ approach to this (real life) situation is to send the customer a new set of cushions at no charge. The reasoning behind this investment decision is straightforward. The cost of a new set of cushions is approximately $150. The average sale is approximately $2000. If that customer returns to make an additional purchase or refers one or more other customers who buy from us in the future the company will have generated a very healthy Return on Investment.
Regarding your question about how we are able to continue to “amaze” our returning customers — basically our “everyday” customer service level is well beyond industry standards. In addition we are very proactive in encouraging continuing communication with our customers.
It begins immediately after delivery. We are the only furniture company that contacts each of its customers within 24 hours of delivery to ask 1) How do you like the furniture? 2)What do you think of the customer service? and 3)Are there any problems that need to be taken care of immediately.
We continue to contact our customers on a regular basis. Every month we send our customers an email or blog highlighting recent awards, new products or special promotions. Many of our customers also follow our Facebook page.
There are also special discounts available just for our former customers (and for new customers referred to us by former customers.) The amount of these special discounts is small (usually $50) but very much appreciated.
One of the many advantages of our Word-of-Mouth marketing approach and “extreme” customer service is that we do not need to heavily discount our furniture. Our typical “sale” discount is approximately 10% in an industry in which 50% – 70% off discounts are not unusual.
Jeff Frank
Hi Jeff
I am pleased that your furniture business has prospered at a time when many others have failed. People should be free to reap the fruits of their hard work and risk taking. Hats off to you for that.
Unfortunately, you are hard-pressed to equate your success entirely to the things you have done. Without controlled managerial experimentation, for example handling different customers in different ways to see which way works best, it is simply not possible to know whether what you did led to the results, whether it was due to some other factor, e.g. to luck (http://vserver1.cscs.lsa.umich.edu/~spage/ONLINECOURSE/R15SkillandLuck.pdf) or indeed, whether you could have achieved even better results through a different approach. Post hoc ergo procter hoc as they say.
I agree with your comment about amazing customers. Indeed, surprise and over delivery are prerequisites for amazement. The larger question is what happens next time they contact you. Will they expect the same over-delivery? Will they be disappointed when they don’t receive it? Will you have made an amazement rod for your own back? Research suggest that amazement is not a sustainable strategy for most Cos.
Zappos and Amazon are interesting companies. Putting aside Amazon’s reputedly appalling treatment of its own ‘labour’ (as in the exploitation of land, labour and capital), both companies have excelled by making life so easy, fast and simple for customers that they have little need for customer service. Or for competitors. Most Cos do not have anywhere like the same level of underlying capabilities that Zappos and Amazon have developed over time and they are thus poor examples for other Cos to seek to emulate. It took Toyota over 50 years to develop the complex set of manufacturing capabilities that is the Toyota Production System. Despite Ford spending many millions of US$ trying to copy it and a manufacturing joint venture with GM, both Ford and GM failed to emulate the efficiency and effectiveness of TPS in their own manufacturing, to their (and in GM’s case, temporarily to the US taxpayer’s) great cost.
Once I gain I salute your success. But I don’t think you are in the position to equate it entirely to the ten principles you propose, nor to suggest that they apply to other Cos. To do that you would have to develop the next level of controlled managerial experimentation.
Graham Hill
@grahamhill
Jeff,
Thank you for posting these 10 tips. I completely agree with all of them.
Our team is what makes our company, not our products. Impress them with SERVICE.
Thanks!
Rupesh
Founder at SmartGuests.com
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