Coffee Love

Estimated read time: 15 minutes

“Customers are our top priority!” It’s a phrase you hear all the time, but do you always believe it?

As a business owner, you probably “get” that having mind-blowing customer service is a great way to keep up your brand’s reputation. The sad reality however, is that many don’t realize it’s also the cheapest way to grow your business. In this post you will learn 4 surefire steps to create (and maintain) customers for life.

Losing a Customer

First, let’s briefly address how losing a customer can empty your wallet according to Score:

  • The average wronged customer will tell 8 to 16 people (about 10 percent will tell more than 20 people).
  • 91 percent of unhappy customers will never buy good or services from you again.
  • It costs about 5 times as much to attract your new customer as it does to keep your existing one.

Let me just restate that last point:

It costs about 5 times as much to attract your new customer as it does to keep your existing one.

If you are a business owner or entrepreneur, here is some practical advice (case studies included) to reverse the trend.

4. Listen to Your Customers

Listening should never begin with a knee-jerk reaction to an existing problem. Outstanding customer service comes from companies that actively reach out to their customers, because they really want to know what they’re thinking.

Jet blue regularly reaches out to customers, with over 1,000,000 followers on Twitter. Inone example, a customer tweeted the following:

Leg #2 - Denver to Boston - JetBlue

Let’s remember that this is a company with exactly 1,645,183 Twitter followers of this writing. When Airlines are going bankrupt and losing revenue at record rates, JetBlue posted their highest revenue ever.

3. Be Genuine

Think of the last time you had a sales associate ask you if you needed help. How did you answer them?

You probably said no, because what they asked is a closed question with only a “yes” or “no” response - and usually a conversation killer.

You politely decline (as you’ve never been here before and aren’t sure what you’re looking for), and watch the sales associate immediately walk over to the corner to chat with co-workers.

Great customer service? Not so much.

Why is that? It isn’t the associate’s lack of greeting you. They welcomed you into the store! They asked if you needed help! Why do you still feel frustrated?

The problem is simple. They weren’t acting genuine and you knew it.

Apple 5th Avenue Store

Consider Apple Retail. In just 10 years time Apple has grown from one store in the USA, to over 331 Internationally. This is a company selling computers and gadgets that has ahigher revenue per square foot then the incredibly expensive Tiffany Jewelry.

How did Apple do it? Genuine customer service.

Employees are not supposed to sell products, just help customers. A quote from the training manual:

Your job is to understand all of your customers’ needs—some of which they may not even realize they have.

Apple’s strategy on “how to be genuine” can easily be described in its A.P.P.L.E. steps of service:

"Approach customers with a personalized warm welcome."

"Probe politely to understand all the customer’s needs."

"Present a solution for the customer to take home today."

"Listen for and resolve any issues or concerns."

"End with a fond farewell and an invitation to return."

A warm welcome? That means while a traditional sales associate as might ask if you need help in a painfully closed way (you can only respond with a ‘yes” or “no”), an Apple associate might walk up to you when you’re playing with an iPad and ask, “What do you think of that iPad? What made you come in here and want to play with one?”

It starts a genuine conversation, where a prospect quickly turns into a customer, and often morphs into a self-promoter of Apple products.

This simple step can have profound results on your balance sheet.

2. Empower Your Employees

Customer service doesn’t just start with fixing broken customers. Great customer service envelopes an entire organization.

You don’t have to own or run an international powerhouse like JetBlue or Apple to have great relationships with your customers. If you’re an entrepreneur, you can still deliver exceptional customer service without the cash, marketing, or reach that the other guys have.

How?

Instill the notion in all of your employees that customer service isn’t a department.

Nordstrom has done an incredible job instilling this notion in their employees. Here’s a quote from the official Nordstrom Employee Handbook:

Nordstrom Rules: Rule #1: Use best judgment in all situations. There will be no additional rules.

Please feel free to ask your department manager, store manager, or division general manager any question at any time.

This means employees can have free reign to do what they wish to help customers. Some business owners might think this is nuts, but to quote entrepreneur Tim Ferriss:

It’s amazing how someone’s IQ seems to double as soon as you give them responsibility and indicate that you trust them.

1. Don’t Cave. Set Boundaries with Your Customers

I know I’m going to get a lot of flack from this, but here goes nothing. Put your coffee mug down. Sit up in your chair. Hold tight.

The customer is not always right.

"But Lee, you have just been saying throughout this entire article that the customer deserves attention and praise… yada yada…"

I know, I know. Let me correct course for a moment to explain.

There are hundreds or even thousands of decisions that you have to make in business every single day (even with the earlier step in mind). Do you always have every fact or detail about your decision available to you? Can you read the future?

If the answer to both of those earlier questions is a resounding “no”, then we can only assume that you make assumptions based on your life experience. We can further assume that most people tend to make decisions they find reasonable. Agreed? Good.

A Cautionary Tale

Now let’s look at the reverse side of things. Here is a story from when I worked at an Apple Store during college.

A customer, annoyed with his broken iPod, and came into the store. After he arrived, the greeter told him to check into the Genius Bar queue and wait for his repair appointment. The customer was clearly frustrated. After two solid hours of sitting in line, a technician called his name.

You could sense this was only going to end badly.

He approached the service bar only to learn that his iPod was unrepairable due to water damage.

The customer demanded to speak with a manager.

When the manager came out and refused his repair, he threw his iPod (yes - this really happened) and shouted obscenities and his intentions to buy a Zune.

Hindsight

Did he really want a Zune? Of course not! He was full of emotion because no one attempted to reason with him. Every person he met told him “no”.

Let’s start by asking the obvious. Why didn’t the manager just give in and give him a new iPod?

If the manager just gave in, they would be setting a terrible precedent for the future. This customer would expect whatever they wanted, no matter how unreasonable, and others could follow.

This whole situation is easily avoided with a few simple actions taken on part of the employees, while still acknowledging that the customer isn’t always right.

  1. The greeter who checked in his appointment should save him from waiting, acknowledge that the iPod was unrepairable, and explain options for recycling or refurbished discounts.
  2. The technician should explain the recycling policy further, or the refurbished iPod option to replace the iPod at a lower cost than buying a new one.
  3. The manager should acknowledge the customer’s frustration, and offer options the technician didn’t provide.

If all else fails, two points are clear.

  • The average customer is reasonable by nature.
  • Treat customers the same way you would want to be treated.

If the “unreasonable” iPod owner was given the alternate options at the earliest stage, then they would have remained reasonable while interacting with the employees, and ended up happier in the end.

End

We’re looking for great customer service stories to share on the blog! Share your stories in the comments below, or just let us know what you think!

And remember, you can’t grow your client base or improve your business if you can’t understand your customers!

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