Encyclopedia of Leadership

12.9

THE ESSENTIALS OF CUSTOMER SERVICE

Inspired by many authors, including William Davidow and Bro Uttal.

Understanding and satisfying customers’ needs should be a top priority for leaders. Just con-

sider:

✔ Customers are more likely to switch service providers because of poor service rather

than price.

✔ A dissatisfied customer will inform seven or eight other potential customers of poor ser-

vice.

✔ The majority of customers will do business with you again if you resolve their com-

plaints.

✔ It costs five times as much to gain a new customer as it does to keep a current customer.

Two pitfalls for customer providers are:

✘ for a physical product, overrelying on its technical attributes to sell the product;

✘ for less tangible human services, realizing these cannot be standardized; each service

delivery is a unique experience, dependent upon the service provider’s skills, knowl-

edge, and motivation.

This tool will acquaint you with some essentials of customer service, and provide sugges-

tions on customer service delivery.

SECTION 12 TOOLS FORLEADINGRELATIONSHIPS 387

Determine who

are your best cus-

tomers.

Understand your

customer’s point

of view.

Manage customer

expectations.

Manage customer

impressions.

✔ Stretching to satisfy every market segment may result in providing low-quality service to all

customers. Group your customers in a logical way for your business (e.g., demographics, age).

Rank customer groups by their value to your business, and determine the cost and benefit of

customer service to each type of customer. Probably, 20 percent of your customers or

customer groups produce 80 percent of your results. [☛3.1 Strategy, 3.6 Strategic

Relationships, 5.7 Stakeholder Groups]

✔ Good service is defined from the customer’s point of view. Take steps to:

• Understand your customers’ long-term goals (think from their point of view).


• Develop long-term relationships (favor customer needs over your product or service).


• Do the little things for your customers (strive to do things right the first time).


• Invest in processes to determine the level of customer satisfaction.
  ✔ Not all customers need the same service, but you need to deliver what was promised.
  ✔ Keep customer expectations slightly below the level of service that you intend to provide
  (underpromise and overdeliver).
  ✔ Provide too little service (or the wrong kind), and your customer may leave; provide too
  much service, and your company will price itself out of the market.
  ✔ Impressions rise and fall based upon how customers see service providers working with them.
  Provide tangible evidence that a service has been performed (e.g., a service report).
  ✔ Manage the climate for service, including such seemingly minor factors as uniforms,
  brochures, employees’ appearance, and condition of lobby, office, grounds, vehicles, and so
  on.