Keeping Customers at the Center of Your Business

Customer satisfaction is the vital sign that acts like a pulse to the health of the rest of the organization. Companies that keep their customers in focus win over the long run. Ensuring that policies & procedures, training, recruitment, facilities and resources are focused on customer satisfaction is important for sustainability.

All businesses are in the business of serving customers. How many cars would sell if they didn’t serve the needs of their customer? Would it be any different for a spa or vacation? Companies that make the mistake of not running their daily operations with the customer in focus eventually start seeing the errors of their ways through poor customer retention and sales. 

Policies & Procedures: The internal mechanisms and operations should ensure every activity is focused on the customer. 

Training: Training should seek to ensure quality completion of jobs and friendly customer interactions; it should set the standard for employees. 

Recruitment: The right kind of personality should be sought after in all recruitment decisions. 

Facilities: All organizations should be designed around the needs of their customer through décor, functionality, and proper use of space. 

Resources: Reinvesting in value producing products and services. Resources should not be wasted on activities not in alignment with strategic initiatives

Poor Service Quality Impacts Customer Perception of Businesses

Service quality can make or break your business if you don't keep track of customers impressions. Business often focus on the physical appearance, atmosphere, cost, and offerings but sometimes fail to see the underbelly of what will make their place a success. Service quality can have a huge impact on customer retention and make or break whether a business can stay open.

Consider a restaurant that has a trendy name, great atmosphere and is all the rave among core crowds. The owners spend a great deal of time advertising and putting everything together but failed to train their staff on how to treat customers. The lines are long, the staff is rude, orders are messed up, and the price is high.

People may love what your business has to offer but they are not likely to return if their experience was poor. This is one of the reasons why trendy businesses are popular one year and close their door the next.  Proper service is like frosting on the cake even though it is the smallest part of the whole offering. Missing the frosting and you really don't have much of a cake.

Customers get an impression when they first walk into a restaurant. It may a positive first impression but if everything falls apart soon after that they will remember their disappointment for a long time. Reasonable mistakes can be expected in any business but customers service mistakes that lower the value of the guest are almost never forgiven.

 Training staff on human interactions and service operations help to create positive impressions with speedy recovery. No matter what is included in training it should focus on the importance of the customer. Anything that veers from this customer perception will dis-confirm the value of the business and may create a level of resentment among visitors.

Service management training doesn't always need to be intensive but does rely heavily on human to human social skills. All interactions should be positive and oriented toward the needs of the customer. Any time behaviors or actions do not focus on the need of the customer the entire experience can be hampered. A single rough rub and the perception of the entire business goes in the wastebasket.

The Importance of Unlocking Customer Non-Verbal Cues

Customers are the lifeblood to any business. If the customer walks away unhappy you may not only lose their lifetime patronage but also deter their friends from frequenting your business as well. The type of interaction between the company and the customer will often determine whether or not they will have a positive impression of your business. According to an article in the Journal of Marketing the ability of company employees to read the non-verbal cues of customers will influence customer affect (Puccinelli, et. al. 2013).

Most of us have experienced poor interaction with company employees from time-to-time. It isn’t always the big things a business does that makes or breaks our impressions. Most businesses know how to avoid these large issues through processes and procedures.. It is the small actions and interactions that can hurt or damage customer perception.

Poor customer interaction often is a result of under trained employees that don’t read the customers needs and don’t know how to respond to those needs appropriate. For example, an agitated customer won’t be happy if you try and sell them another product versus solving their problem. A single mistake in judgement can lose that customer forever and leave a bitter taste in their mouth.

Non-verbal communication is also reciprocal. A customer who is reading the company representative non-verbal cues and picks up on lack of interest, condescending behavior, or annoyance will likely apply that impression to the entire business. They will interpret such behavior as an indication of the amount of value the company places on their customers.

When customers think and reflect on the business there are two aspects that may come to mind. On one hand, they could consider the service itself and whether or not they need that service. On the other hand, they may think of the interactions they have with people who work for the company and whether or not their patronage is appreciated. If either of these interactions are negative there is a chance the customer will find another business to requent.

The study highlights the need to train customer facing employees with the ability to read and understand customer cues and respond to them appropriately. This may occur through scenarios, examples and role playing. When representatives can interpret signals appropriately they will be much better able to respond to the customers needs. When they give off the right signals they can prompt customers to their value leaving them with a higher affect.

Puccinelli, M., et. al. (2013). The value of knowing what customers really want: the impact of salesperson ability to read non-verbal cues of affect on service quality. Journal of Marketing Management, 29 (34).

Improving Customer Care Quality Through Efficiency

Service efficiency and service quality have often been considered two different dimensions that don’t work well together. As service quality improves the efficiency of service moves downward. Likewise, as service quality moves down efficiency can move upwards. Conventional wisdom may not be accurate. A study by Talluri, Kim and Schoeherr (2013) used both transactional and survey data to show how service quality and efficiency can work together.

What they did find was that service efficiency should be improved through the development of higher levels of technology before moving into service demand quality. Without efficiency in place quality becomes more expensive. Focusing on efficiency and then on quality appears to push growth higher.  

Efficiency allows for the use of less resources to service customer’s needs. As core service functions are defined the processes and procedures streamline to cut out any waste. There may not be a lot of options in the types of services offered to customers but there is also less waste in the overall process.

Customers like a level of customization when handling and solving their problems. If they have an issue then general flexibility in dealing with that issue is beneficial. However, this customization reduces the overall efficiency of the organization. Customers may be happy but they are soaking too many resources to maintain profitability.

Developing customer service should be streamlined to meet certain organizational objectives. Once the efficient aspect of customer service has been covered it is possible to expand the range of service to raise overall satisfaction. Like a cycle the process of streamlining and then offering enough flexibility to meet customer needs is important.

The report helps administrators put in perspective the tradeoffs of efficiency and quality. It also helps them understand that these concepts are not necessarily mutually exclusive. It is possible to improve on efficiency and then work on offering enough flexibility within defined limits to serve customers adequately. When done together it can save the company money and improve upon customer satisfaction.

Talluri, S., Myung, K. & Schoenherr, T. (2013). The relationship between operating efficiency and service quality: are they compatible? International Journal of Production Research, 51 (8).

Why are Customer Service and Trust Important for Customer Retention?

Abundance by Dr. M. Abel

Service is an important component of customer retention, business development, and improved product sales. Companies that fail to develop customer service also fail to develop trust with their customers which mean they may lose a lifetime of patronage. Research by Webber, et. al. (2012) discusses provider service orientation and how this predicted cognitive trust much more than customer agreeableness. 

Trust is the root of all commerce and relationships. Cognitive trust is grounded in the perception of another’s reliability, dependability and competence (McAllister, 1995). The way in which customers view customer service representatives is important for the retention of those customers. 

Let us assume for a moment that you have a problem with a product and bring it forward to a customer service representative. When the representative doesn’t appear to understand the problem, doesn’t follow through on company promises, and makes a number of mistakes within the service process that trust will dissipate. 

We all have experienced these types of situations from time-to-time. You have a problem, can’t get it resolved, and the customer service representative has no idea what to do. The implication is that the poor performance of the representative also changes the perception of the company and their products. The representative actually does represent the company in the customer’s mind. 

Strong customer service is a “predisposition to provide superior service through responsiveness, courtesy, and genuine desire to satisfy customer needs” (Bettencourt, et. al, 2001). This requires a level of listening and understanding the options available to meet that customer’s needs. When staff are undertrained, not knowledgeable or indifferent they fail to fulfill their function at an adequate level. 

The study found that trust is built when customers go above and beyond the call of duty to service the customer. Their personality has a direct impact on how the customer perceives both the services offered and the service representative they are talking with. Ensuring positive demeanor that is focused on the customer and having the competence to meet that need is important for customer retention and future sales. 

McAllister, D. (1995). Affect- and cognition-based trust as foundations for interpersonal cooperation in organizations. Academy of Management Journal, 38, 24–59.

Webber, et. al. (2012). Personality and trust fosters service quality. Journal of Business Psychology, 27

Does Combining Customer Service with Sales Improve Company Performance?

Customer service and sales are both important functions for an organization. What happens when we put them together? A study by Jasmand, et. al. (2012) delves into the nature of creating ambidextrous sales-service functions. Their findings determine a net positive result of helping customers with their problems and offering those products/services that better suit their needs. It creates some confusion among employees but seems to improve customer satisfaction and overall sales volume.

There is a natural mental barrier between customer service representatives and sales. Customer service representatives do not view their job as including sales and therefore are less focused on this activity. A lack of perspective limits the abilities of firms to create higher sales through a level of mental merging of the two functions. Training, time and commitment will be needed to bridge the gap and improve upon the integration of both constructs.

Ambidextrous goals and behavior in service and sales can be difficult for representatives. It creates confusion on what actions should be taken and toward which goal. It is a complex skill that low cost providers will have a hard time teaching as the representative will need to know when a better product or service will provide higher levels of customer satisfaction. Most organizations have trained employees to focus on a single activity based on the definition of their job function.

Let us see how this works in a real life scenario. A customer calls in to complain about a product. The customer service representative can log their complaint and check the warrantee to make a return. However, if the customer service representative listens closely and asks important questions they may be able to suggest an alternative product that fits the customer’s needs better (customer satisfaction). The sales portion may come into play if the returned product can be used as credit for a higher level product that actually satisfies the customer (improved sales).

The study found that ambidextrous sales-service activity increases customer satisfaction and sales but reduces efficiency. The total net effect is positive on organizations whereby sales and customer satisfaction improves the company beyond the loss in efficiency. The authors acknowledge that if proper training occurred, organizational resources were adjusted, and the measurements of activities improved, efficiency may rise. For example, if fewer resources are needed from the sales department because the organization is fulfilling some of that function in customer service and developing higher customer retention rates then the sales-service activity improves net efficiency between the varying functions.

Jasmand, C. et. al. (2012). Generating sales while providing service: a study of customer service representatives’ ambidextrous behavior. Journal of Marketing, 76 (1).

Improving Service Delivery to Raise Customer Satisfaction

Developing strong service management within organizations is not easy. Some customers may like a particular approach while others will leave to other opportunities. The researchers Sivakumar, et. al. (2014) studied service failures and surprises to develop a model incorporating prospect theory to encourage positive service impressions.  Their work will delve in to frequency of service failures/delights, timing of these failures/delights, proximity of failures/delights, and the sequence of failures/delights. 

It is difficult to understand the totality of service if one is only focused on failures. To get a better picture of the patterns of service perceptions among customers it is beneficial to look at failures, success, and why these things are occurring. To know what the company is doing well and what it is failing at will provide better opportunities to enhance what works and minimize what doesn’t. 

Their model is based off of prospect theory. Prospect theory explains a mental accounting system based upon heuristics that consumers use to judge winnings, losses, and mixtures of both (Kahneman and Tversky, 1979).  Customers have a value proposition in mind when engaging in a particular service and if what is offered is less than that proposition they will be disappointed and possibly move onto another company. If the perceived value is higher than the customer will be satisfied and may stay. 

It is important to remember that service loss or gain from the perspective of the customer is not equal. Research by Mittal, et. al. Baldasare (1998) found that when customers lose it has a greater impact on their psyche than when they win. This means that organizations should ensure that positive impressions are more forthcoming in their service delivery chains than the negative impressions.

They found that by suitably deploying resources and the amount of service personnel firms can gain direct and indirect control over the distribution of service failure occurrences and delights. Even with lay-offs and cuts to budgets it is possible to analyze where these occur and adjust the service process to ensure there are significantly more service positives that raise customer satisfaction.  It requires an analysis of where service success and failure are being delivered and reconstructing to service process to improve upon the chances of positive outcomes. This leads to customer satisfaction, greater purchase amounts, and customer retention.

Kahneman, D. & Tversky, A. (1979). Prospect Theory: an analysis of decisions under risk. Econometrica, 47 (2).

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Mittal, V. et. al. (1998). The asymmetrie impact of negative and positive attribute-level performance on overall satisfaction and repurchase intentions. Journal of Marketing, 63 (33).

Sivakumar, K. et. al. (2014). Service quality: the impact of frequency, timing, proximity and sequence of failures and delights. Journal of Marketing, 78 (1).