July 18, 2013
Starting a successful small business is hard, but keeping it going for a number of years is even harder. In a world of instant communication and constantly improving efficiencies, even the best ideas are quickly copied, improved, and re-branded by competitors.
According to Jerry Fritz, director of management institute at the University of Wisconsin, while speaking to a group of business executives, “You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied.”
WHAT IS CUSTOMER SERVICE?
Simply stated, good customer service is giving your customers what they want, when they want it. Although likeability is an important asset for any business, customer service is not just about being nice—it is understanding the needs and wants of potential customers and meeting their expectations.
Walmart, for example, provides excellent customer service because it targets those customers who are primarily interested in low prices and variety. The company understands its customers’ priorities—what is important, and what isn’t. As a consequence, Walmart stores aren’t especially attractive, the lighting is often harsh, and there is limited sales help, but customers get low prices and lots of choice.
It is just as important, if not more so, for a small business to identify a specific customer demographic, understand those customers’ wants and needs, and deliver products and services perfectly aligned with that understanding. Fortunately, technology levels the playing field so small companies can compete on local, regional, national, and international levels with companies that are vastly larger.
IMPROVING CUSTOMER SERVICE IN YOUR BUSINESS
Working hard is not enough to ensure success—you must work smart. As the often bombastic entrepreneur and “Shark Tank” venture capitalist Mark Cuban said, “The battle for our hearts, minds, and money is a war being fought on new fronts every day.”
To win that battle and improve your company’s customer service, you must do the following:
1. Analyze, Analyze, Analyze
Every product and service should be designed to meet the needs of a specific theoretical customer. As results are achieved, data regarding actual customers can be collected and analyzed so that preconceived ideas or assumptions can be confirmed or disproved, and corrective action can be taken.
This approach—the use of customer analytics—can be used to segment customers based upon actual behaviors, track them as their needs change, and project how they are likely to behave in the future. Once the province of large companies, customer analytics software is widely available from companies like SAS, IBM, Birst, and PivotLink for small and midsize businesses.
2. Design Customer Service Jobs Properly
Most companies, small and large, fail to deliver consistent superior customer service because of poor system design. According to Harvard Business School Professor Frances Frei, coauthor of “Uncommon Service: How to win by Putting Customers at the Core of Your Business,” customer service jobs should be “designed for the employees you actually have, not the employees you wish you had.” And companies frequently fail to consider the customer’s role in the service equation. Technology allows many functions to be transferred easily from employee to customer with lower costs and more satisfaction of the customer.
For example, E la Carte’s Presto tablet enables customers to self-checkout without their credit card leaving their possession. It also cuts seven minutes off the average diner’s stay, an important factor where the number of table “turns” directly affect revenue and profits.
3. Communicate Clearly, Relevantly, and Often
The ubiquity of electronic and communication devices means that every company operates 24/7, 365 days per year. Websites, email, blogs, social media, customer forums, and chat are avenues to connect directly with customers efficiently and cost-effectively. Companies like Hubspot, Marketo, and SilverPop provide effective marketing solutions and training; software like Sales Cloud from Salesforce assists in managing and coordinating large and small sales efforts; and suppliers including Novo Solutions and Kayako facilitate customer service and help desk operations.
An online community, where customers answer questions from one another, can be effective and less expensive than a fully staffed customer help unit. Customers often respond to each other faster than customer service reps can, and the answers customers provide may be better than answers from company staff.
4. Observe and Innovate
Gordon Moore, co-founder and chairman of Intel, is credited with the principle that computer hardware performance doubles every two years. As a consequence, any competitive advantage gained from the use of any technology is temporary.
Patrick Cox, co-editor of investment research service Technology Profits Confidential, asserts, “There has been more technological improvement in the last 50 years than in the previous 5,000.” Furthermore, customers are notoriously fickle, constantly changing their habits, preferences, and needs. An astute business owner keeps his eye on his customers, as well as new technology.
5. Outsource Where Possible
Some companies small and large in the IT industry have shifted work previously done in-house to outside providers for a variety of reasons:
- To adapt quickly to sudden industry or marketplace changes
- To eliminate the costs of recruiting, hiring, firing, and training personnel
- To expand their options and flexibility in such areas as advertising and public relations
- To expand their expertise with access to specialized knowledge
Other advantages include lower fixed costs, particularly for those capabilities that are likely to soon become obsolete, and an independent perspective regarding the market, customers, technology, and competition. Small companies with limited budgets may find that outsourcing can allow them to provide better customer to their customers at a lower cost.
Superior customer service is a competitive advantage available to every small and midsize business. Businesses fail not because their services and products are no longer needed, but because a competitor has discovered a way to deliver the same service less expensively, quicker, more conveniently, and better tailored to each customer’s individual requirements.
Technology is both a great disrupter and a great equalizer. Use it to your advantage and ensure your business remains relevant and desirable to your customers.
What other ways can you suggest to improve customer service?
MICHAEL LEWIS is a contributor for Money Crashers Personal Finance, where he analyzes hot topics related to economic policy, investing, retirement, and small business.