Newsletter: July 2010
Keys to Making Customer Service Your Competitive Differentiator
Ramping up customer and improving customer service is becoming a competitive strategy for many businesses. Primarily because during the recent recession, layoffs and staff reductions had a negative impact on customer service. The WSJ (6/7/2010) had an article on customer service as the new growth engine.
There are two approaches important to address when ramping up customer service levels, one tangible and specifically analytical to drive improvements, and the other, intangible and more about the experience the customer has with you.
First is to better understand your customer, and this is done through analytics. All businesses maintain at least some data on their customers, and analyzing these data is an important first step. Issues that are important to know:
- Who are you key customers?
- This is the 80/20 rule – the 20% of your customers that generate 80% of your revenue
- What are their preferences? (Specifically, what are they buying, and what are they asking for?)
- Have they changed in the last year? (For example, has the recession affected them in a way that affects you? And if so, how?)
- Who is your most loyal customer group, and what do they most value?
These are examples of knowing your customer. We believe this is important because general customer improvement service initiatives are a waste of money. And it is often general improvement initiatives that we see as the economy recovers and there is a renewed interest on customer service. Yes companies tout these initiatives as providing a more personalized level of customer service, but this is much more effective if the company knows what the customer values. Too often companies put together programs based on what they think the customer values or should value.
We believe customer service initiatives need to be addressed as follows:
- Using analytics – to understand the customer (as outlined above) to drive your decisions
- Identify what your company needs to do to improve service to the customer based on customer needs and wants. You can also solicit feedback from customers through a variety of means. A feedback box or online survey system, employee and management questions direct to customers, information gathering through a third party interview or a call campaign.
- If it requires training, which is a very good idea, training should:
- Be targeted to meet the defined service improvement needs that the customer will value
- Insure there is a system in place to sustain and reward improved customer service
- Insure that the supervisors and managers are also trained (and rewarded) for customer service improvements
And, in addition to knowing your customer needs and implementing cost-effective improvement initiatives based on the there are two core elements, that are so simple and obvious, yet commonly overlooked respective to creating an experience for your customers, that they keep coming back and tell their friends. They are:
1. Physical Condition of your business, resulting in customer impression based on their experience with your business. That is the look and feel of your business from an appeal (and comfort of the environment) considering functionality and aesthetics — if you have a physical facility -consider such things as lighting, safety (do you keep the ice clear and clean and tidy storefront), furniture, and access to restroom. If a food/entertainment group — do you provide a conformable place to linger? If you offer your products/services without a physical facility — your website becomes the "venue" people will visit and form their impression. If you host/work out of other venues, choose wisely, as ultimately they will be representing you. The presentation of you and your employees also influences impression- good or bad. For example, how do your employees present themselves, meaning are they professional and polished looking or sloppy and not easily identified as staff? Lastly, how well do they demonstrate care for and pride in their work area/department/facility — this is clearly observed by customers, and will make a strong impression on their judgment of the customer care at large.
2. Relationship Building — the Care Factor. How well do your employees genuinely and consistently treat their customers (and each other), as customers observe positive and negative interactions and relationship, and will be a deterrent or an attractor. How do you treat your employees — same point here? The better employees are treated, the better they will treat their customers. Is your staff knowledgeable about your products and services? If not, customers will go elsewhere to learn about and find what they need and where the staff cares enough to be knowledgably to help. And lastly, do staff make relationships with customers to promote their loyalty? Do they probe for their real needs, remember their names, and inform them of new products/services that they may be interested in based on past buying or expressed interests?
Knowing the customer, knowing what they value, targeting your customer service improvement initiatives to address those needs, while insuring their great experience with you, is a cost effective way to grow your business coming out of the recent recession.
Healthcare Corner - News and Issues
Affordable Care Legislation - Alert
The debate on the impact of the Affordable Care Act recently signed into law continues unabated, with information and misinformation spreading rapidly. As a small business owner it is important to familiarize yourself with what this legislations provides and what it doesn't provide. Many of the provisions do not kick-in until 2014, but there is one provision that is in effect now that's worth noting.
There is a tax credit that's worth up to 35% of a small business's healthcare premium costs. The rate will increase to 50% in 2014. There are conditions, however.
To qualify, a small business must have between 10 and 25 full-time equivalent workers, pay average wages between $25,000 and $50,000 and currently cover at least 50 percent of health care cost for its workers.
To learn more about this tax credit and whether you can qualify visit: http://www.whitehouse.gov/healthreform/small-business/tax-credit
Health Care Trends: Electronic Health Record
There is a serious effort underway to implement electronic health records (EHRs) in health care organizations. Its been discussed for years with little progress until the passage of the American Recovery and Reinvestment Act of 2009. This Act authorizes the Centers for Medicare and Medicare Services (CMS) to provide reimbursement incentives to eligible hospitals and professionals not only to implement EHRs but also to insure meaningful use. The incentives will turn into penalties in the future for non-complying hospitals and professionals.
The importance of this legislation and initiative is that it will lead the way to not only improving communication among practitioners and reducing the potential for medical errors, but it will also create an opportunity to support the restructuring of health care delivery. As health care delivery moves more toward out–of–hospital care, access to information about the patient by health care practitioners will be essential. Implementation of EHRs and a requirement for meaningful use is a step in the right direction.
KLC News
- We have been quest bloggers for CO2 and are contributing authors for FrogPond;
- Check out our newest articles:
- Alaska Business Monthly Magazine, "Avoiding the Healthcare Talent Shortage: Tips and Strategies that Work", http://www.akbizmag.com/component/content/article/4699.html and the
- Providence Business News, "The four keys to improved organizational performance in difficult economic times"http://www.pbn.com/detail/51053.html
- And we are new Business Advisors for BizyMoms.com – look for our regular column.
