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Tuesday, February 20, 2007

Exceeding Customer Expectations

by Russ Peterson & Kevin Karschnik

“There is only one boss… the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” - Sam Walton

We have all had a great customer service experience, as well as a bad customer experience.  If you think back on what made each of those experiences either good or bad, we’ll bet that it can be summed up in one word…”expectations.”  When we ask our workshop attendees what made those customer service experiences so great…we get the same response 90% of the time…”they went above and beyond.”  While that may be an acceptable answer, we always like to ask the student a follow up question, “Above and beyond what?”  After some intent thinking, the response generally comes back…”they went above and beyond my expectations.”

The response is really no different from our students when we are focusing on their negative customer service experiences.  The customer was extremely dissatisfied because their expectations were not being met.  According to research, in these cases of poor customer service, it will now take up to 12 positive experiences to make up for the one negative experience.  These negative experiences can slowly destroy an organization through customer attrition.  In fact, according to The Gartner Group, 68% will eventually take their business elsewhere when they receive poor service.

Customer service, either good or bad all revolves around one thing…Expectations!  If you think about it, we’ll bet that you have gone to see a movie in the past based on the reviews you had heard from others.  “That is the funniest movie I have ever seen!  You HAVE to go see that movie!”  When your review comes in…you were less than impressed.  How can two people have such differing opinions?  In some cases it is nothing more than expectations.  The first movie-goer had either no or very low expectations.  The second movie-goer was planning on the funniest movie of all time.  Now that is a tough expectation to meet or beat!

So how do you deliver high caliber customer service that creates passionate advocates for your company?  The answer lies in their expectations!  Deliver top notch service to your customer that consistently meets or beats their expectations.  Studies show that when you consistently beat your customer’s expectations by going “above and beyond”, you will create not only loyal customers, but passionate advocates (salespeople!) for your organization.

So the next question is, “What makes up top notch service?”  Some may say, “I can’t define top quality service, but I know it when I see it.”  Based on his research at Texas A&M University in 1994, Dr. Leonard Berry describes five main service factors that contribute to customer satisfaction and loyalty. These are the key expectations of a customer when they contact your organization.

1)         Reliability (dependable)

2)         Responsiveness (willingness)

3)         Assurance (knowledgeable)

4)         Empathy (caring)

5)         Tangibles (appearance)

Why is top notch service so important?  Because it will increase revenues while decreasing costs.  Those are two goals that every business executive loves to hear about.  The statistics behind increasing revenues and decreasing costs with quality customer service can be quite an eye opener. 

§         It costs ten times as much to sell to a new customer as opposed to an existing customer. 

§         7 of 10 customers who switch to the competition do so because of poor service.

§         96 percent of unhappy customers will go to your competition and tell an average of 12 people.

§         Only 4 percent of unhappy customers will complain and give you the chance to keep them.

§         Resolving a customer concern creates a more loyal customer than if they had no problems.

§         Customers will spend a 15% percent premium for the same product or service with better service.

 

In summary, your company’s long term success will be dependent on your ability to deliver service that meets and beats your customer’s expectations.  Remember that Customer Service is a philosophy, not a department, a program or a policy.  It is a philosophy that must be radiated by all members of an organization.  By believing in the concept to consistently meet or beat expectations, you can create not only loyal customers, but passionate advocates that will happily sell for you by telling others about their WOW! experience with you!

 “When our customers rate us better or worse than someone else, it’s never very scientific … but it is always disastrous if you score low!” - Jack Welch

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