How to improve customer service?

How to improve customer service?
Listen and understand customers' needs for service

When it comes to customer service, there is a widely held belief that small businesses do a better job than large corporations. While this is true in many cases, it is not universally true. In fact, large corporations can actually provide many excellent models to choose from if you are trying to develop a customer service program at your business or attempting to improve the services that you already provide.

Let me first start with a story that clearly illustrate where small businesses fail to see the deeper issues involved with improving customer service for their high-value customers. When I first bought my house in 2001, I did not see any need to make changes with some of the vendors that served the previous owner. For instance, the local business that supplied heating oil to us. The setup was simple: they kept track of when we might need oil, filled up the tank, sent us the bill, and we paid it. We never saw them or spoke to them. When gas prices rose somewhat during late 2003, BJ's not only opened a gas station in our area (with lower gas prices for members but also no need to buy large volumes of gas as is the case with, for example, paper towels), they also started to push their members to consider buying heating oil from them. The price difference with our current supplier was remarkable: approximately $40 each time our tank was filled. I was, however, reluctant to give my business to a large corporation at the expense of a business in my town. So I picked up the phone and gave our oil supplier a call. I told them that I would like to keep my relationship with them but it does not make sense that the price difference be so steep. I got a lot of talk about 'service' but I do not think that there is any service involved with supplying heating oil. In the minds of most consumers like me, heating oil is a commodity and they buy it on the basis of price, particularly because there is even less interaction than at a full-service gas station. When I was not convinced with their logic and they refused to drop their price even by a penny, I had to simply dump them. This is not great customer service, I thought. (Related: Dell customer service)

So how to determine what "customer service" means for your business and how to improve it?

You cannot answer this question yourself. In fact, you should simply ask this to your existing and potential customers. The expectations that customers have vary significantly by the nature of the product and how it is used. A follow-up question to ask is if the customers are willing to pay extra (and how much) if service was provided. (Related link: Customer service and care)

Not all customers appreciate service and that is why customer segmentation is key. There is always a group of customers that is willing to pay extra for convenience or higher level of attention, but many customers simply want a fair price. So do not offer the same bundle to everyone. Let the customers pick what meets their requirements.

Do not assume that what you do always has value for the customer. For instance, there was a time that if someone kept track of oil in our tank I would not need to worry about it and I would pay extra for it; this is no longer valuable to me with the availability of technology. BJ's offers online account management that allows me to schedule regular delivery of oil so I don't have to worry at all. Technology has now replaced the personal attention that was provided. That personal attention has lost its value in my eyes. In fact, I believe that online tools have improved customer service. (Related link: Key account management strategies)

Talk, talk, talk: to your customers. Just call them for no reason whatsoever. Ask how you are doing and what can you do to improve service. Be persistent. Most customers, out of politeness, will simply say that you are doing a great job if you are doing even a reasonable job. But in order to improve your service to them, you will need to uncover their hidden needs. Also try to understand if their needs are changing. Ask if there are additional needs that you can fulfill.

Remember, you exist because you have customers. Without them, you are not a business; so do not ever take them for granted and always keep improving.

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