Happy Thanksgiving!

On this Thanksgiving Day, ARMA, Inc. would like  to express our thanks to you. We appreciate your interest and your support and we extend our best wishes for a Happy Thanksgiving!

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We will return next week with commentary, views and reports regarding customer service.

 

 

 

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Investment advice we can really support

How do you choose which stocks to buy? You and your broker probably have lots of issues and numbers you check before deciding where to invest your money, like performance, company health and return. That’s fine,  of course, but we think there is one issue that you should check when deciding where to invest: how well does the company do in customer service.

We just came across a post on the financial advice website Motley Fool, The Divine Comedy of Customer Service by Rich Duprey, where the author, suggests investors consider investing in companies known for their responsive customer service.  We at ARMA think this makes good sense. After all, as we have discussed on this blog, companies who are responsive to their customers are the companies that customers want to do business with. Conversely, companies who treat thier customers badly are those from which customers run away from and that are plagued by bad word of mouth to boot. Duprey talks about companies that have been in the news recently for looking to squeeze their customers of every last penny. That may help the companies’ bottom line in the short run, but it ends up hurting their reputation in the long run.

Case in point: this viewpoint column by Nursery Management & Production editor Kelli Rodda, who writes why she chose to stop giving business to a big box store because of its poor customer service performance.

Rodda writes:

By now you’ve surmised I’m big on customer service. I’m loyal to companies that provide the best service and I penalize those who treat me poorly.

She goes on to explain how she began shopping at a store that was more expensive because it gave her better service. She tells us that she is not alone:

The Strativity Group released its 2009 Customer Experience Consumer Study. The group surveyed 1,994 consumers this spring. More than 70 percent of consumers surveyed said they are willing to spend 10 percent or more with businesses if those companies “exceed their expectations.” More than one-third of consumers surveyed said they are willing to spend 25 percent or more if their expectations are exceeded.

A handful of those surveyed said they’d continue to do business with a company despite bad customer service, but only if products or services were discounted.

If you’re still trimming costs to help turn a profit, make sure you’re not making cuts that would result in an inferior customer experience.

Clearly, customers are impacted by the quality of customer service. That impacts the present and future bottom line of the company they do business with. It is wise to consider this when investing.

 

 

Customer service becomes more social

With the advent of social media — blogs, Twitter, Facebook — one customer’s experience can be broadcast quickly to many other potential customers. Recently, we wrote about a company who is using social media to their advantage: Zappos.

On Wednesday, USA Today published a story entitled “Social Media Like Twitter Change Customer Service.” The article quotes Pete Bradshaw, a Nielsen executive:

Social media is not a panacea,” says Blackshaw. “It is a catalyst for fresh thinking on how companies can improve customer service in the digital age.”

The bottom line is that even though customer service is a one-on-one interaction, a bad (or for that matter, a good) interaction can go out to many people, impacting the perception of the company.

For instance, a colleague of ours here recently tried to buy some furniture at an office supply store. The store was out of stock and did not offer to find the furniture at another store, or issue a raincheck. The problem was compounded by bad information and general lack of initiative among the employees. The colleague wrote about the situation on Twitter. The problem then becomes larger for the store.

What do you think? Is social media a good watchdog for customer service?

 

What is the customer’s experience?

Companies that seek to differentiate themselves from their competition may well ask their customers what kind of experience they have had in dealing with the company. In fact, this area is a key area of differentiation, and a place where companies can retain and gain customers. Good customer experiences lead to happy customers who will want to do business with the company again.

According to a survey commissioned by Vovici, called the CE IQ Study, customer experience is a key differentiator:

…more than half, or 55%, of respondents say that customer experience is a core differentiator that distinguishes their business from others in their market.  Customer experience has arrived, and is now as important as traditional differentiators such as quality, service and staff capabilities. Despite the global economic contraction, price was not frequently cited as a core differentiator (18%).

Read the article and analysis here.

The bottom line is simple: improve your dealings with customers and see your bottom line grow.  On that note, here is the list of top 10 retailers for customer service. On the list are Amazon.com, Zappos.com,  LL Bean and others. Have you shopped at any of these retailers? What has your experience been?

Is your customer service up to par?

Apparently, many customers feel that companies do not provide good customer service.  The Phoenix NBC affiliate, KPHO, reported about an online customer satisfaction survey regarding major businesses that showed the highest and lowest levels of customer satisfaction.

Bank of America and Sprint/Nextel were  among those with lowest customer satisfaction levels. And among those at the top was Whole Foods.  The story reports that Julie McGough, of Whole Foods, said the following:

(…)the company stresses good service just as much as good food, but the real key is hiring the right people.

Clearly, Whole Foods puts the emphasis on employees, since they are the first line in interacting with customers. It is a good strategy.

According to and article entitled “5 Ways to Flub Customer Service” on CIO/Insight, there are at least five reasons your customer service may not be up to par. These are:

  1. Outsourcing without understanding the implications (provider may not understand your business culture, for instance).
  2. Relying on incomplete metrics.
  3. Not using analytics enough.
  4. Taking existing customers for granted.
  5. Trying to be everything to everybody.

There are probably many more, including not properly training your customer service personnel, and having a business culture that does not appreciate customers.

If you own a business, ask yourself if you are providing the best customer service. If you aren’t, it is time to start focusing on it.

 

Improving customer service in a bad economy

Obviously, we think that customer service should always be a priority for business. In a bad economy, the tendency is to want to cut where you can.  However, maintaining a high level of customer service ultimately helps your bottom line.

We came across two articles that we’d like to share with you. This one, from the Idaho Business Review, interviews a business consultant, Rod Rohm about how to use technology to improve your business in this economy.

Getting your own house in order and communicating with key customers and suppliers are priorities, Rohm said. Technology can be an important tool to make that happen in a business environment that figures to run short on overall demand for a while, he said.

Rohm also:

… recommends giving cell phones to key customers and vendors, and giving them priority access to your business wireless phone. This helps business owners stay in the loop and capitalize on new opportunities quickly, especially if they take their business phones and networks with them in their vehicles, he said. Using e-mail saves time for all parties and allows people to streamline the flow of documents, he said.

Technology can also help you sound bigger than you are, according to this article in the Washington Post about Google Voice.

The article says:

Google Voice allows you to have an incoming call to the Google Voice number simultaneously ring on multiple phones. On an individual basis, calls could ring an office desk phone and a mobile phone at the same time to ensure important calls reach you no matter where you are.

Google Voice allows businesses to access sophisticated call features like forwarding and special ring tones for free:

The reason for its popularity isn’t hard to see. Google Voice provides a plethora of call handling features at a price that can’t be beat–free. For small and medium businesses, Google Voice is an opportunity to use advanced call management features typically reserved for expensive voice solutions in larger enterprises.

A free service that will help you stay in touch with your customers is definitely worth checking out!

Can you recommend other free or low cost technologies to help businesses with their customer service?  Please share.

Person to Person

In large part, customer service is about the personal touch. It is about people getting attention from other people.

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It stands to reason that certain businesses are more about personal relationships than others. For instance, this article from the British website Moneyfacts, reports that to British bank customers, personal service is still very important. Customers wanted to be able to go to a branch,  even more so than getting a good interest rate.

The article states:

Perhaps surprisingly, the level of service was the main consideration for 66 per cent of customers when choosing where to carry out their banking, compared to the 30 per cent of respondents who cited the place where they earn the highest level of interest as their main consideration.

Injecting the personal touch is a place where all businesses could find a competitive advantage. In an era where companies are cutting back on “live” help, and opting for automation, the truth remains that customers always prefer talking to a person, not a computer.

Your thoughts?