Customers do notice and reward service

American Express and the National Retail Federation (NRF) conduct a Customers’ Choice survey to determine the top ten retailers for service.  The survey’s purpose is to recognize excellent customer service and to promote best customer service practices for retail operations.

The ten finalists were:

  • Amazon.com
  • Coldwater Creek
  • HSN
  • JC Penney
  • Kohl’s
  • Land’s End
  • LL Bean
  • Nordstrom
  • Overstock.com
  • QVC
  • Zappos

The number one retailer was determined to be LL Bean,  an award the company has received for the past three years.  Among the many customer service qualities that LL Bean has is its commitment to make it 100% right. You can return any merchandise that you are not 100% satisfied with.

Awards like this one are helpful because they shine the spotlight on the need for best practices in customer service and they highlight the companies that are doing it right.

Do you agree with this survey? Have you had good experiences with these retailers?

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How important is it to set up a customer service department?

Imagine that you are a new company. You are selling an electric gadget. You’ve already set up a pricing scheme and distribution network. You have marketing in place and a couple of reviewers really liked your product.  Should you set up a customer service department?

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The answer is yes, you should. What will inevitably happen is that someone will not be happy with your product. Or a product will be defective. If you do not have a way to address these issues, potential customers will be turned off.  One unhappy customer can lead to an unhappy review, which then can generate negative word of mouth. Companies need to be able to address  and try to correct any issues.

This situation is being played out right now. As you may have heard, Google just released a new smart phone, the Nexus One. However, Google is not a company that has ever put out a physical product before. Up to now, their product has been online advertising, and other Internet  offerings.

As the Times of the Internet reports in the article Google  Nexus One Reviews Coming In-Does Google Have Customer Service:

Google Inc has made it’s money through automation, not through providing hands-on customer service.

That’s one big weakness that Google will have to address if they plan on dominating a technological product like a SmartPhone.

Clearly, with a physical (and complicated) product, Google will have to deal with customers who have questions or complaints. Will email be enough?

The spirit of Christmas

The spirit of Christmas is one of cheer, one of helping out those in need, of forgiveness. Customer service can be the spirit of Christmas all year long.

In today’s Washington Post, there is a story of a city worker who went above and beyond to help someone have a merrier Christmas.  After a neighborhood was snowed in, Toran Felder from the DC Department of Public Works was helping the plows do their job. He heard a neighbor saying she was going to have a hard time getting a Christmas tress because of the snow, and he went to get it for her himself.  Mr. Felder says he is prone to random acts of charity.  Here’s a cheer for you Mr. Felder!

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In the spirit of the season, ARMA wishes you a very Merry Christmas!

If your product is excellent, shouldn’t your service be too?

Some stores are known for their exceptional customer service. These stores are generally higher-end, where people are spending more money, and therefore expect the utmost in service. One such store is Neiman-Marcus, which has developed a reputation for having outstanding customer service.  The website Luxist, has nominated the chain for a Reader’s Choice Award for Best Department Store.

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The truth is that if your offering is in the luxury category you cannot afford to have penny customer service. When people pay for a luxury offering, they are also paying for an experience. Can you imagine having a gold-standard product, and then not providing any type of customer service and/or experience?

A good example of this may be hotels. When you check into a Mandarin Oriental or a Ritz-Carlton, the service expectation is high. You expect a perfect room, with a wide range of amenities. You expect respectful, quick check-in, and you expect to be shown to your room. If you have any problem, hotel related or not, you expect that there is someone who will help you (concierge to book dinner reservations, for instance). On the other hand, when you check into a Motel6, you expect a clean room.  Period.  You know you won’t be getting much in the way of service.

This is not to say that if your product is not a luxury offering that you should feel free to provide lousy customer service. What we are saying is that you cannot afford to have a luxury offering without luxury service.

Your thoughts? Have you ever paid a luxury price to receive bad service?

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.

 

 

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?

 

It really is simple

Is  business success simple? Not completely. Anyone who runs a business can talk about the myriad issues that come up. But perhaps the strategies for business success are simple. According to a review by Guy Kawasaki published in Open Forum, that is the gist of John Spence’s new book: Awesomely Simple: Essential Business Strategies for Turning Ideas into Action.

The six essential business strategies can be summarized as follows:

  1. A strong vision
  2. Quality team made up of the best people
  3. Transparency and strong communications
  4. A culture where the most important things are done immediately
  5. Disciplined execution
  6. Extreme customer focus

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Please note the last one: extreme customer focus. As Kawasaki says,

At the end of the day, the only critic whose opinion counts is the customer’s, and the company that owns the “voice of the customer,” owns the marketplace.

Focusing on the customer is a simple business strategy that will pay off in market share. It really is that simple. Keep your customers in mind at all times.

To implement this strategy you should start with the question: What will keep my customers happy? Then ask yourself, Is my company structured in a way that will make it easy to keep customers happy?