All small business owners know that their employees make mistakes with customer service. "The smart ones know how to turn a customer with a problem into a customer for life," according to Customer Service Expert and Keynote Speaker John Tschohl, author of "Loyal for Life."
"Customer retention is all about creating loyalty and a fan base. Customers will come back more often. Their loyalty is greater when they have experienced service recovery," said Tschohl, president of Service Quality Institute.
"Less than 2 percent of companies use service recovery techniques. That's really bad," Tschohl said. Tschohl has been described by Time and Entrepreneur magazines as a customer service guru and customer service strategist. "Many companies and most employees run for cover instead of solving the problem. Many employees will pass the buck or they will lie because they don't want to confront the customer," Tschohl said.
A District of Columbia barber had a customer to walk into his shop and demand a haircut. The problem was the barber had no experience cutting women’s hair. When he told the customer that he did know how to cut women’s hair, the customer became angry and wrote a scathing criticism of the barber online. The small business owner had been in business in the District of Columbia for over 20 years and had hundreds of loyal customers. “I did not mean to offend her. I sincerely do not have any experience cutting or styling women’s hair. I was trained as a male barber,” the small business owner said. Social media is very powerful and can destroy a small business owner’s reputation as this incident illustrates. Respond to false charges online. Lies become the truth if not challenged and corrected.
"Companies spend a fortune on marketing. But they don't spend a dime teaching front-line employees to keep the customer from defecting," said Tschohl, who presents strategic keynote speeches on customer service topics to companies worldwide. "Wouldn't it be better to spend that money on training employees to handle problems in the first place?"
The most important person is the person who has direct contact with the customer. Unhappy customers won't call the company president. They will talk to whoever is in the store or who answers the phone. The person who greets the customer at the door is the face of the company. Tschohl gives the following tips on dealing with an unhappy customer:
- Apologize and offer a better option. For example, you might offer expedited delivery at the company's expense.
- Act quickly. You must respond to the complaint within 60 seconds. That's when the magic happens.
3. Take responsibility. Most employees shove the problem off and blame everyone else. Customers know when they are being passed along the chain and they don't like it.
4. Empower employees to make a fast decision. Each front-line employee should be able to take action quickly. They shouldn't have to ask their managers to get an approval or pass the buck to them. Take action.
5. Give away something that has high value and low cost. Customers will be pleasantly surprised and delighted with your company if you not only make things right, but make things better. For example, let's say a customer calls to complain about a new computer that has a hard drive crash in the first month. In addition to solving the problem, you might offer an extended warranty. It costs the company nothing but it has a high, perceived value to the customer.
"While I find it hard to find examples of companies doing this well, here are two companies that stand out from the pack," he said.
- Outback Steakhouse: If there is any kind of a problem, they immediately take care of it. I once had a dirty knife with water stains. I only wanted a new knife. The waiter apologized and brought me a new knife. The manager also came over to apologize. He also offered me a free dessert that cost about eight dollars. The dessert might have cost him only a dollar but it meant everything to me. Now I tell thousands of people about my positive experience.
- Red Box: I recently ordered a DVD movie but it wouldn't play on my TV. I called them and quickly realized that I ordered the Blue Ray version by mistake. Blue Ray doesn't work on my TV. Even though it was my mistake, they offered me two free rentals. What's the cost two DVD rentals to them? Nothing. They turned me into a customer for life!
"Very few companies understand that," he said.
Stewart Boehmer, the great customer service general manager at Macy’s in Pentagon City, once said, “First the customer is always right, second the customer is always right, and third the customer is always right.” This customer service thinking is taught to his employees. It works. If a business wants to keep a customer that customer is always right. Businesses that treat customers as if that customer has no choice and must do business with them are not in business very long. If the customer has a problem, the business has a problem. John Tschohl understands this concept.
To see other training programs, go to http://www.customer-service.com
To hire John Tschohl to present keynote speeches on employee training, go to www.JohnTschohl.com