2012 Cambridge Business & Economics Conference ISBN : 9780974211428
Customer Service In Eastern Europe: Does it matter who is asked?
By:
Aaron Martin, Indiana Wesleyan University
Joshua R. Millage
Shawn M. Carraher
Sarah C. Carraher
For our research paper we decided to examine the importance of customer service for any entrepreneur or small business owner in any location or field. Because “businesses, large or small, industrial or retail, new or established, can't survive without customers.”[1] And having good customer service is essential for small businesses in gaining those customers. Also discussed will be the need for small businesses to create life-time customers opposed to one-time customers. No matter how trendy, efficient, or useful your product or service is, you will go nowhere if your customers are not satisfied. And if your customers are not satisfied you can be sure that you will not have too many customers.
Customer service seems to be a lost art in much of today’s business world. Many companies seem to be “out of stock” when it comes to good customer service. But “customers are smart enough to know it is not "out of stock" everywhere. Some company has what they are looking for, and they will find it.”[2] From personal experience I have seen companies more concerned with cutting cost than the happiness of their customers. If owners would train their employees in customer service, it could take their small business a long way. Customer service is very valuable and becoming more of a rarity today. If more owners would apply the old rule, “the customer is always right,” to their business plan, it would take their business and possible the economy, a long way. This can be hard, because if small businesses are honest, there are some times that the problem is caused solely by the customer. But if businesses want to have good customer service they still must do all they can do to satisfy the customer. [3] In this research paper we hope to explain why customer service is so important to small businesses and why more owners of these businesses need to focus on this topic when determining how to treat customers.
The first questions that must be answered when doing this research paper is “What is good customer service?” and “What are some examples of good customer service?” Customer service used to be defined simply as “the customer is always right,” but today some innovative businesses are “doing their best to figure out what the customer wants and to provide it before any questions or problems arise.”[4] Some businesses today are even saying customer service isn’t most important anymore! They believe that “customer service brings them in the store the first time. Customer satisfaction brings them back."[5] But for this paper we will assume that good customer service equals customer satisfaction.
No discussed will be some general statistics from 2011 on the topic of customer service in the business world. These statistics show just how important customer service still is, such as the fact that even in this poor economy, 60% of customers will often or always pay more for a better experience. This statistic really shows how much customer service is a lost art, because people will actually pay more money for the same thing just to enjoy better customer service. This is bad overall, but can be good if a small business owner is one of those businesses that provides good customer service and can differentiate themselves in that way. This also explains why “80% of firms would like to use customer experience as a form of differentiation.”[6] Since nobody is doing it anymore, it can be used to stand out in the crowd of small businesses. And “81% of companies with strong capabilities and competencies for delivering customer experience excellence are outperforming their competition!”[7] This means that customer service can actually help small businesses earn more money and a higher percentage of the customer base by being better than the competition
Another eye-opening statistic about customer service is that “70% of customer experience management best in class adopters use customer feedback to make strategic decision. 50% of industry-average organizations and 29% of laggards do.”[8] This means that the businesses that are focusing on customer service are growing and adapting to the world better than those businesses that do not focus on customer service. So if a small business wants to experience growth, a good step to achieve this would be to work on having superior customer service. Having good customer service is also a key way to gain and keep customers because “a dissatisfied consumer will tell between 9 and 15 people about their experience.” And “for every customer complaint, there are 26 other customers who have remained silent .”[9] So if a small business has poor customer service, the customer may will most likely tell many other people about the experience, and not even let the business know!
The next staggering statistic is that “86% of consumers quit doing business with a company because of a bad customer experience, up from 59% 4 years ago!” and “91% of unhappy customers will not willingly do business with your organization again.”[10]
On average “It takes 12 positive service experiences to make up for one negative experience.”[11] This is why first impressions are so important with new customers, because if a small business owner messes up once, it takes a lot of time to make things right. And the fact that “attracting a new customer costs 5 times as much as keeping an existing one” solidifies the importance of creating life-long instead of one time customers. If small businesses are successful at creating life-long customers due to customer service, they will enjoy the benefits, because “happy customers who get their issue resolved tell about 4 to 6 people about their experience.”[12]
There are many things that can justify good customer service, but next I will simply highlight eight rules that can be followed by small business owners to improve their customer service. The first rule that a business owner can do is simply answer the phone when it rings. When people call a business they want to “talk to a live person, not a fake recorded robot.”[13] The second rule that can be done to help insure good customer service is, “don’t make promises unless you can keep them.”[14] If a small business owner isn’t sure whether or not they can do something by a deadline, they shouldn’t say that can. Nothing annoys customers more than a broken promise. Customers would rather be told that a small business cannot do something than they would want to be disappointed by a false promise.
The third rule is to actually “listen to your customers.”[15] When customers talk, small business workers need to listen and respond appropriately. This is especially true when the customer has to interact with a worker. In these cases, “the interaction between customers and service workers offers a potential means by which a firm can achieve true customer loyalty.”[16] They need to respond by trying to fix the problem, not by ignoring what the customer says completely. The previous idea ties into the fourth rule of good customer service which is to “deal with complaints.”[17] Instead of saying that you can’t always please everybody, small businesses need to have the attitude that they may be able to help each and every single customer, or at least make a valiant effort to show that they tried their hardest. Even if a specific problem of a customer cannot be resolved, and earnest effort to solve the problem looks a whole lot better for a small business than not trying to do anything at all.
The fifth rule in having good customer service is that small business owners need to “be helpful – even if there’s no immediate profit.”[18] We found a true story that perfectly represents why small businesses should do this, and how it could create profit later.
“The other day I popped into a local watch shop because I had lost the small piece that clips the pieces of our watch band together. When I explained the problem, the proprietor said that he thought he might have one lying around. He found it, attached it to our watch band – and charged me nothing! Where do you think I'll go when I need a new watch band or even a new watch? And how many people do you think I've told this story to?” - Susan Ward - [19]
This type of thing can happen in any small business if they are helpful and provide good customer service. Businesses must look for consistent long-term profit, and not be after short-term one-time profit. The sixth rule to insure good customer service is to “train your staff (if you have any) to be always helpful, courteous, and knowledgeable.”[20] A small business owner can be very committed to having good customer service, but if they do not train their workers to be just as concerned the business will not have good service. Entrepreneurs and small business owners need to train and re-train employees so they know how to handle almost any situation when a customer needs assistance. One thing that small business owners never want is to have a worker say that they cannot help a customer, but somebody else will be back soon that can. This looks the employee and business as a whole look bad because of the lack of training provided.
The seventh rule for small businesses to follow to have good customer service is “take the extra step.”[21] Small businesses should never do the bare minimum to assist a customer, but they should always go above and beyond the call of duty. Customers may not say so, but they will notice and may share their experience with others. The eight and last rule to insure that a small business has good customer service is to “throw in something extra.”[22] This “extra” thing does not have to be big; it just has to be genuine. Customers will always love to get more than they thought they were getting, so doing this will greatly increase your value of customer service. Following these eight steps to good customer service can greatly help small businesses and “over time it will bring in more new customers than promotions and price slashing ever did!”[23]
Customer Service itself can be broken into three additional factors which are “emotions, trust, and control.”[24] These factors are the main things that determine how customers view and think about small businesses. Focusing on these three factors will provide small businesses with the “opportunities to shape new offerings that lead to more positive service results.”[25] The first thing discussed will be emotions, which “influence what we remember, how we score encounters, and the decisions we make.”[26] When small business are dealing with customers, they need to be aware of the emotions that they make the customers feel. The desired emotions are obviously positive ones such as a good surprise, happiness, or satisfaction. Workers should try at all cost to avoid emotions such as anger, annoyance, or irritation. Small businesses must realize that experience that are emotionally charged are remembered the most by the customers.
The next factor that must be focused on when dealing with having good customer service is trust. It is very important for customers to be able to trust a small business because “trust is a … variable that is essential to any robust and enduring relationship.”[27] If a customer has no trust in a business, they will never know what to expect or whether or not the workers of the business will follow through with their promises. Without trust there is only negative feelings, but with trust comes a sense of ease in the customer. The last factor that must be considered when dealing with good customer service is control. Both the business and the customer needs to feel as if they are in control of the circumstances of their interactions. Customers need to feel like they are in control of what they want, and will be served the way they should be. And the business itself needs to feel as if they have control over the knowledge needed to please the customer, and control in the actions of pleasing the customers. Realizing the importance of three factors of emotions, trust, and control can greatly increase a small business’s customer service.
Discussed next will be some more specific area of good customer service that can be used to help an entrepreneur or small business owner improve their success as a business. The main topics covered will include; gaining and keeping employees through good customer service, differentiating through good customer service, and different forms and channels of good customer service. This will help show some of the benefits from customer service and why it can help business owners and customers alike.
First focused on will be how to gain and keep customers through good customer service. Small businesses who can “provide high-quality customer service without compromise have two things the business world envies: dedicated, trustworthy employees and loyal, satisfied customers.”[28] A small business with “good customer service keeps customers coming back, (but) bad customer service drives the customers away, taking their friends, family and workmates with them.”[29] Good customer service can become a methodology that small business owners use to create life-long customers from the people that they interact with. This is “a process that begins with the customer’s favorable assessment of service quality; continues with positive feelings toward the establishment; and ends with loyalty behavior, including repeat purchases and favorable recommendations.”[30]
The first part of this process is having a good first impression like previously discussed. This can make or break a small businesses opportunity to have a good long-term relationship with a customer. If a business can start out on the right foot with customers it can have a long lasting effect on how the customer views that business. Next the customer must continue to feel as though they are being served well. It cannot just be a one-time thing; the small business must consistently practice good customer service. If this happens the customer will be satisfied and pleased with the good or service they received. This will cause them to tell others of the good experience and recommend the business that proved them with such good service. The small business or entrepreneur that has good customer service will gain a loyal customer, and some free marketing from that customer as they share their positive experience when interacting with your business with others.