MAXIMIZING CUSTOMER LOYALTY

By Pauline Field

Have you called your company lately? Did you enter "voice mail alley that took several more questions to answer to get a live person - or more machine voices"? Was there a tired or frazzled person answering? This is the first impression that a caller gets of your company. It can be hard to overcome the bad taste left by a less-than-inviting answer to a call.

In an era of aggressive competition, customer service is more than a buzzword, it's a strategy ... and an imperative. Retaining your customer base helps keep costs down and revenues up. As the U.S. Department of Commerce has found, it costs five to six times as much to get a new customer as it does to keep the one you already have.

Lowering customer turnover is not simple. Just as many problems throughout the company are merely symptoms of a much larger issue, so customer retention needs to be addressed as a company-wide issue, not piecemeal.

"Customer Service" is more than a department. It is the very lifeblood of your company. Every person, whether they "touch" the customer directly or not, makes a difference in how the customer is served and how your company is perceived.

Retaining customers is accomplished when there is a daily commitment throughout the organization.

Sufficient resources must be allocated.

A communication system that penetrates throughout the organization and out to the customers needs to be in place.

Planning must be an ongoing process to prevent the company from being blind-sided by some circumstance that could have been foreseen.

Participation by employees in the detail of day-to-day operations should be encouraged, particularly through cross-functional and cross-departmental efforts.

When there is leadership throughout the organization, executives and front-line workers alike are aware of what is happening and all are able to contribute to progress.

To test reality against perception, key performance, service and quality measurements are needed.

There are several questions that need to be asked:

What are your customers saying about your company, product and service?

How easy is it for them to do business with you?

What is your customer retention rate?

What do your customers want that you are not providing?

Which product or service is "stale"?

If you have ready answers to these questions you are cl ea r ly listening to your customers. If you are scratching your head, it is time to get in touch with your customers because if you continue to ignore them, you may be headed for extinction.

What are your employees saying about the company?

When was the last time you acknowledged an idea from one of your front-line employees?

How often are your employees involved with management in any decision-making processes?

Do they have the authority as well as the information necessary to satisfy the customer on the first contact?

Again, if you have answers to these questions and have "flattened" the problem-solving process so that it is not just a few managers making the decisions, you are more likely to have employees who care about how the company fares.

Employee "ownership" does not mean turning the physical ownership over to the employees. What it does mean is that they take pride and are concerned about how the customer is treated, how the internal processes work to support the customer and are going to provide the outstanding customer service necessary to retain your customers. Without it, you open yourself up to poor customer service and being one of the "horror stories" being told about poor customer service.

What would a reduction of 27% in customer turnover mean to your company?

Or a cost reduction of 15% due to streamlined work processes ?

How about a 8-10% increase in revenues?

These are actual results of companies that have made the commitment to outstanding customer service and gone into action to make it happen. The impact was measured in millions of dollars.

In summary, to increase revenues, cut costs and increase customer loyalty, these are the critical elements to have in place and some steps you can take now:

1. The cornerstone of customer retention is that company leadership must have, and demonstrate, a co mm itment and dedication to providing outstanding customer service. This means clear goals, satisfied employees and effective systems and processes.

2. Survey your customers regularly. This can be done periodically with your whole active customer base, and with your customers shortly after the sale. There are many resources that can help you put a survey together so that you get meaningful results.

3. Act on the survey results. A study recently completed of 38,000 customers of 25 large Canadian companies finds that customers willing to let you know what and how you can do better are your more loyal customers. If you listen to what they say and take action on their recommendations, they will keep coming back.

4. Survey your employees . They are the people who know what is and is not working in the company. Get their ideas. Bring different departments together to resolve issues.

5. A well-managed human resource function providing the right number of people at the right time, who are well trained and compensated, is needed. As well as surveying the employees for their satisfaction level, there should be regular appraisals and equitable incentive programs.

6. Through how many hands does each piece of paper pass? Take a walk through a department you haven't visited for a while and ask one of the staff members what he or she is doing, where their work came from and where it will go to once they have finished. You r degree of surprise is equal to the degree the processes need streamlining.

7. Are the information systems in place to provide everyone with the data they need, when they need it? Is it accurate? Have you added systems as you have grown and they have yet to be integrated ? Are your systems making it easy for your internal and external customers to do business with you? Negative responses mean you need to focus on transforming your information systems.

8. Are you measuring performance, service and quality? In every functional area there are a few tasks being done that are the key elements of that area to be tracked and monitored. For example, the number of customer calls, number of calls taken per employee, % of calls that are complaints, number of customers satisfied on the first call and the number and percentage of customers placing repeat orders after their complaint is handled would give a good picture of how effectively a department is operating.