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Kathy Vass, Marketing Editor

Customer Service As A Point Of Differentiation

By Kathy Vass, Marketing Editor

A recent segment on NBC’s “Today” show was a hidden-camera feature on customer service. Secret shoppers traveled to New York City-area department stores, drugstores and big-box retailers to determine attributes such as friendliness, availability of salespeople, and their knowledge of the products they were selling. In all but a handful of cases, retailers failed miserably in delivering good customer service as defined by these attributes.

There are hundreds of definitions for customer service. One custom homebuilder defines it as “ doing what you say you’re going to do, when you say you’re going to do it.” As this company sees it, adherence to this simple phrase will set it apart in the homebuilding industry.

There are more textbook definitions — “Customer Service is the complete activity of identifying customer needs in all their complexity, satisfying [customers] fully, and keeping them satisfied”; and “Customer Service is a function of how well an organization meets the needs of its customers.”

Unfortunately, simply meeting basic customer needs is considered enough in today’s marketplace. Companies should be striving to exceed the expectations of the customer because, quite honestly, customer expectations appear to be fairly low these days.

Customer service can be a powerful marketing tool and a true point of differentiation in today’s business environment. It can be the very attribute that lifts a company head and shoulders above its competition.

The Chicago-based Center for Exhibition Industry Research (CEIR) reports the average closing rate for a sale initiated during a trade show is 0.8 sales calls — often as simple as a follow-up phone call — compared with 3.7 calls needed to close the deal after a traditional sales call. CEIR research also shows the cost of closing the sale on a trade show lead is $419, compared with $1,080 for the traditional route.

Despite this exciting and encouraging research, CEIR also reports 83 percent of the leads gathered by companies at a trade show are never pursued. Your company could stand out simply by following up on such leads.

In many businesses, customers are looking more for expertise and problem-solving skills than simply to make a purchase. If you can deliver in these areas, the sale will come as a natural by-product.

What Makes You Stand Out?

When considering customer service as a point of differentiation, ask the following questions about your business:
Does a human being answer the phone, or does a machine? In this age of automated answering systems and voice mail, a live, concerned voice on the other end of the line is a refreshing, differentiating factor. When a potential customer looks to you to help solve his problem, he’d rather be greeted by a friendly live voice than a recorded one. A phone call to your company is often your first opportunity to prove you can solve that customer’s problem.

Do your employees possess in-depth product knowledge? Such knowledge takes time and effort to acquire and maintain. Equally important is the employees’ ability to impart this knowledge and information in various ways. Some customers want a detailed, technical brochure; others need a hands-on experience with the product; and still others require a face-to-face, detailed conversation.

Do you have a website? Many customers who need detailed information to solve a problem are looking to the Internet first with increasing frequency. Make certain your on-line presence provides complete product descriptions and information, is easy to navigate, and links to other sites that customers may find helpful or educational. If you sell on-line, make sure you have a simple shopping cart that makes checkout easy for customers.

How good is your front-end and technical staff? Is there ever a backlog of customers waiting to make a purchase or wanting to get their equipment repaired or serviced? The speed and convenience of handling customer complaints or otherwise solving a customer’s problem can be a major point of differentiation between you and your competition. One way to do this is to empower your salespeople to promptly and completely resolve customer complaints themselves.

How well do you handle orders? Is your company able to quote a reliable price and delivery time when the order is placed? Solid customer service in this area means you execute the placement of orders with vendors and consistently monitor vendors to ensure their reliability. It also means you are diligent in following up on on-time delivery and communicating with customers to keep them abreast of any changes in the status of orders.

Are you able to deliver and install when it’s convenient for your customers? Good customer service in this area means orders are delivered completely and accurately from the start in an effort to make callbacks a rare occurrence. Your delivery staff and installers must understand the company’s commitment to friendly, helpful customer service, realizing a customer’s time is his most precious commodity.

Do you have the infrastructure to support your customer service requirements? A back-end system that enables you to consistently exceed your customers’ expectations is critical for customer service. This system should include a customer-focused point-of-sale feature and accurate inventory control, item and price files.

How Good Is Your Customer Service?

Research shows that about one-fourth or more of a company’s customers are not happy with its product or service, but that company is not likely to know of their unhappiness unless it has an active program to uncover it.

People are five times more likely to tell others about a bad experience than they are a good one. However, less than 5 percent of unhappy customers complain to the company that sold them the product or service.

So, how do you determine customer attitudes toward your company and products? A customer service review may be the best way. Author and training and development expert Alexander Hiam recommends a five-step process to perform an effective customer service audit:

First, identify as many customer service attributes as possible and determine specific ways to address each one. Determining these attributes can be the most difficult part of conducting a good customer service audit. If you consider just the obvious issues — like friendliness, product availability or response time — you will likely miss areas of great importance.

Here are some areas to consider, determining those that best apply to your industry:
• answering the telephone quickly;
• consistency and predictability;
• reliability;
• invoicing accuracy;
• friendliness of staff;
• matching competitors’ prices or service;
• not arguing over who is responsible for problems;
• prompt response to service or warranty issues;
• quick and/or fair response to complaints;
• performing only the requested or necessary work;
• use of rude letters or telephone calls for bill collection;
• delivery of product or service when promised;
• providing loaner equipment when customer’s is being repaired;
• customer reminders for equipment maintenance or supplies checking/ordering;
• getting the job right the first time.

Next, ask your customers how important each attribute of customer service is to them. You’ll find some attributes are far more important than others. Once you know what your customers value most, you’ll know where to concentrate your efforts.

Next, ask your customers how well your company performs on each attribute identified in step one. Develop a scale and ask them to rate your company in each of the customer service areas. Also give them the opportunity to comment on each specific area.

Armed with customer ratings and comments, compare your customers’ priorities with your company’s performance in specific areas. If your performance is less than stellar in their top priority attributes, work on those areas immediately. If you rate high in areas your customers have identified as less important, back off a bit on these and put more resources behind the more highly-rated attributes.

Lastly, get serious about making some changes. The worst thing you can do is solicit input from your customers and then do nothing more than issue a fancy report.

Develop an action plan and review your execution of that plan on an ongoing basis — weekly, monthly or quarterly.

March/April 2006