Customer loyalty

Have YOU had Your Customers for a Sleepover Yet?

But, it’s good customer service!

Getting and keeping customers today is harder than ever. When opportunities arise to WOW! the customer, you need to jump on it immediately.
Take a look at this story of an opportunity that presented itself in what could have been a dire situation for both the customers and the employees. But the lead manager of the John Lewis department store in London made lemonade.
This inspiring story is delivered in this fun Prezi as you follow the adventure of an open-minded, risk-taking manager (Deborah), who did what was right for the customers, all 100+ of them.
Ask yourself, would you stick your neck out to do this? The last few slides say it the best: “It shows that great service isn’t a set of rules, it’s a mindset.”

Use right and left arrows at the bottom to view presentation at your pace. Some slides have sound, not all.

Listen carefully to Deborah as she describes the experience. Find the key culture characteristics that drive this behavior and how as a manager, she was totally comfortable in doing this at a cost. How does that culture become not only unquestioned, but supported by senior managers? And note the enabling, not constraining nature of the effort.

“Sharing your customers’ problem and doing all you can to help solve them.”

Share your customer service hero experience here.                          

Small Business vs. Unlimited Guarantees

“Is the customer is always right”?

In reality, is the customer always right? No, not really. Many customers have taken advantage of that adage and have started using it to get something for nothing.

This mindset has occurred as corporations  have extended warrantees for longer terms and in some instances for a lifetime. The wording of such warrantees varies as to what constitutes a guarantee-able cause. Some are unconditional.

Why have companies made these promises to repair or replace their goods with such risk? Well, they either believe their products will last that long, they are desperate to compete on something other than price or they are playing the odds that most people will not return their purchases. All of these have associated costs that you pay for upon purchase.

What has gotten customers (a minority that is growing) to this point? Why are customers willing to lie to get “free stuff”? Retail clerks tell stories of products returned way past their guarantee expiration and with elevated tones decry the failure of the products until they have talked to higher ups and gotten what they want. Are their claims legit? Sometimes yes and sometimes no. They just know that if they scream loud enough they’ll get what they want.

With online and telephone (mail order) purchasing, it gets even worse. Without face to face contact on a return, theReturns line elevation of tone, the assertiveness of conversation and the “I won’t take no for an answer” speech can become
belligerent and often does. Lacking eye contact and the emotional connection of a personal conversation, the clerk on the other end of the line seems less human. Getting your way results in a freebie. The caller goes away swinging high fives while the clerk on the other end feels diminished, defeated and demoralized. After all, this is the company he works for, the products he believes in resulting in a desire for combat pay.

Big business created this practice

Companies have that right to offer any extended warrantees they wish. The do need to live up to them. They also need to spell them out completely. If a $10 billion company makes $800 million in profits, they can afford to risk a 7-9% return rate without affecting the bottom line much. They may get added business because of their warranty which will more than make up for the return rate. Returns may be resold at discounted prices if not damaged.

How can I as a small business compete?

Small businesses that resell products can live by their product manufacturers’ warrantees. If they provide an installation of the products, they should warranty the installation as well or declare in the terms that installation is not included. Some manufacturers offer some compensation for re-installation of their products at a pre-negotiated discounted rate if failure occurs. For large failures, say an entire commercial HVAC system, a negotiation with the manufacturer should be executed in order to not put a small business under financial duress.

Are customers ‘entitled’ to warranty freebies?

  • Customers returning products claiming failure, defective performance or damaged items are entitled to a replacement or repair per the warranty terms. If cash refunds are available, they should be spelled out in the terms. Many products are replacement or repair only.
  • Returns PolicyCustomer honesty is important. If the customer is lying about the performance of the product, they damaged the product themselves or misrepresented how they received the product, the conversations become ugly. Situations such as these need to be protected under the warranty terms and conditions.
  • Don’t offer cash back unless there is proof of purchase/receipt and the time elapsed is limited.  Most people don’t read warrantees until they need to use them, so make sure you’ve covered your company.
  • Do the math. What exactly is it costing to accept, say 8%, of sold products back? In your calculations, figure the labor, postage/trucking etc. as well. What handling will be needed afterwards to re-sell, re-condition, liquidate or dispose of the item? Whatever the average cost is, include it in the sale of the product after deducting the re-sale. If the cost is high, manage your warranty terms carefully.
  • In the case of service-only businesses, call-backs are costly. Sending a technician, installer, service person back to a customer has hidden costs. Not only is the employee time lost, the transportation costs (mileage, time), that tech’s billable time is lost, parts replacements and the lost confidence in your business’ ability to do the job right the first time is now questioned. Remember that customers talk and one bad experience gets shared many times over.

Returned sales cost small businesses thousands of dollars each year. If they aren’t accounted for ahead of time, they come off the bottom line. It is possible to protect yourself by planning ahead. Do the math and protect your profits.

5 Strategies on Structuring an Empowered Business – Part III

This is the 3rd of a 5 Part series on getting and keeping your business organized

See also: Part I;  Part II

Allied Partners

5 Lessons Capture

 

Every business has to depend on outside sources for products, services and support. The relationship you establish with them will help you serve your customers to the highest level of satisfaction. Vendors and suppliers should become business partners with your business to the point that when a problem arises, they are there to help and support you through it.

Recently, an order came through for my retail client ordering custom tables for his restaurant customer. The paint color on the furniture came in a shade different than intended. After further research, it was determined that the sample that had originally been presented by the vendor was furnished while the customer intended on a slightly lighter shade from a color swatch. When the order was placed, the customer did not notice that the color description on the purchase order was not what he chose.

Colors are typical issues when ordering of products. But the question always arises, who is responsible for the error? It could be said that either party was wrong. The end user, the customer, rarely wants to acknowledge the mistake. They remember what they said and it doesn’t matter what the purchase order had written on it. Customers also do not want to pay twice for a product they are buying (nor does the retailer or vendor).

Here is how this was resolved. The vendor offered to replace the tables at no extra cost OR give the retailer a credit that could be extended to the customer. The restaurateur chose to wait for the right color and was allowed to use the delivered tables until the new ones arrived. This is a vendor who cares about his customer’s customers. He avoided a hardship for his retailer and satisfied the customer. Allowing the customer to use the delivered tables while the new tables were being manufactured is an expensive task. He will never be able to resell those as new. But the correction is a long term investment in his retailer. The retailer gets to salvage his customer who can now tell a good story to his friends.

warehouse.distribution

With vendors and suppliers, always work to establish solid partnerships. Spell out the details of how business will be handled when things go right and when they go wrong. Don’t wait for something to happen to find out. Ask them how they have handled those things in the past. Make them a part of your business and expect the same from them. Don’t do business with suppliers you don’t trust. You have to be able to trust that they are looking out for you. They will want to trust that you will help them when they need it too. That’s a partnership. When you open the lines of communication, trust ensues.

As a customer, how do you want to be treated when an order doesn’t work out? After you’ve answered that question, ask yourself, “Are you treating your customers that way?”

Tell us what you look for as a customer.

Reply

4 Powerful Tools for Irate Customers

Customers are diminishing your profits. They come armed and ready to deal. Are you ready?

By Paul Beaudette, President- Leading Edge Business Strategies

Angry Customer

The typical customer of today when purchasing goods and services comes armed with more information than even your sales clerks or sales people have. Your clerks and reps. must learn an entire inventory of products and services. Your customers learn specifically about the one product they are looking for. They research the internet for specs and prices, they read reviews and check competitors. They know what they need to pay or expect. And, they understand your product guarantees better than you’d like them to.

Addtionally, the customer knows how to handle your clerks and sales reps. quite handily. If they have the slightest inkling that you are not going to negotiate, that you will not accept a return or that you are not meeting their expectations, the assertiveness rocket kicks in. The tone of the conversation elevates and the customer is now in control. The threats start, the historical disappointments fly and the clerk is now in the passenger seat. It used to be that the person on the other end of the phone or behind the counter was respected for what they knew and how they treated the customer. Now, the customer assumes control by putting the company down, reliving a series of disappointments over the years or even demanding to talk with the President or the CEO. The ultimate outcome, depending on the level of unreasonableness of the customer will be a refund, a break on the price or they will no longer be a customer. Whose loss this ends up being is left to each party to decide. The company has lost money or a customer or both. Depending on the genuineness of the customer, yes, some customers are worth losing.

What can you do? Try this:

  1. Arm your salespeople, service people and delivery people (they all come in contact with customers) with knowledge. They must be trained and maintained to be knowledgeable about everything you sell and service. You’ll spend money doing it, but it will still be less expensive than dealing with irate customers and the accompanying high percentage of returns and credits.
  2. In the same vein, arm your employees with your competitors’ information. Depending on your products or services, this could vary as to what degree they need to know. When I worked for a heavy equipment manufacturer, they trained us in not only our equipment, but also in the competitor’s products as well. We actually got to sit in each type of equipment, run it and compare ours with the competitors. Knowledge is power.
  3. Train your sales people to deal with irate customers. They are not mad at them, but mad at the company. So, the need to retaliate is unnecessary, and the best thing to do is listen and if the company has done something wrong, apologize and develop a correction. If the company has not done anything wrong, don’t apologize. Just be empathic and offer a way to make the situation right. Irate customers can be verbally abusive especially if over the phone, texting or chatting. A simple statement, “I would very much like to help you resolve this, however, we need to be civil with each other. If you would prefer calling back when you are calm, we’ll be glad to help you then.”
  4. Guarantees can and will be abused by some customers. With lifetime, customer satisfaction and unlimited guarantees being promised today, many people are taking advantage of them to an extreme, much to the disadvantage of the retailer. For example:
    • Eddie Bauer – For 50 years, “100% unconditional lifetime guarantee.”
    • Zappos – “If you are not 100% satisfied with your purchase from Zappos, you can return your item(s) for a full refund within 365 days after purchase. (Returns must be unworn, in the state you received them, and in the original packaging.”
    • L.L. Bean – “Our products are guaranteed to give 100% satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We do not want you to have anything from L.L. Bean that is not completely satisfactory.”

The bottom line with these warrantees is they put the cost of returns back into their products. We, the consumers, are paying for this. With some of these guarantees, 20% of the cost could be an anticipated return. If you’ve used a wearable product for 10 years, should you expect a replacement at no cost to you? Some people do. Some go longer than 10 years. Unfortunately, these companies have created these customer expectations and this level of ethical discernment. Just because you can, does it make it right?

With as many people who make no compunction about taking advantage of these guarantees knowing that satisfaction does not mean any product will last your lifetime, but maybe the expected lifetime of the product, companies are sacrificing millions of dollars of profit to appease these customers and live up to their word. The net result is customers who now expect the same from many other companies and don’t hesitate to let them know, sometimes at the top of their lungs.

The era of the customer is always right is approaching the finish line. The population is growing and retailers will soon find out that there are too many good customers out there that can reciprocate a good transaction. Verbally abusing sales people and clerks will not become the standard.

 

Leading Edge Business Strategies, LLC is a consulting firm for small business. Paul Beaudette is the President and has over 30 years of successful business experience managing companies to sustainable profits and leading employees to being productive and aspiring to growth.

“Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.” ~ Stephen Covey

5 Timely Traits That Tell Clients You’re Genuine

Ever wonder why you didn’t get the sale when your presentation went off without a hitch? You nailed it! You gave them the features and how they could benefit from them, save them oodles of money and there were smiles all around. The only drawback was that you were 7 minutes late because of an accident on the highway, but they understood that… or did they?
Being on time tells clients, fellow employees and even friends that you care enough about them to be there when you say you are going to. Sure, there are a multitude of reasons (AKA excuses) why you were held up, but the bottom line is you were late. There are no valid reasons for being late. If you need to leave 15 minutes or half an hour earlier to make up for unknowns, then you do that. Even if you have to sit in the parking lot for 20 minutes so you’re not too early, it is worth it. If your flying and you have a mid-morning meeting, you’d be a fool to try and catch an early flight that day. Leave the day before.

Here is what being on time tells your customer:

  1. You’re punctual. That translates into someone who is organized, not last minute, has probably reviewed their presentation 10 times and has it down to a tee. The attendee will get something out of it.
  2. You’re trustworthy. People who can be on time can be trusted for other things as well. This may not always be the case, but more times than not, it is.
  3. You’re respected. Maybe they are not ready for you, but they respect the fact that you live up to your word. You’ve shown yourself to be a human being of your word.
  4. You’re respectful. You respect the fact that they are on a schedule as well. You are there on time to start on time and you only use up the time you agreed upon. If it goes longer, it should be at their behest.
  5. You’re responsible. Anyone who lives by their word is a responsible person. Combined with trust, they’ll know they will be able to rely on you if something goes sideways after the sale. Earning the sale is only the beginning, getting repeat business and referrals is the proof you’ve succeeded.

In a business where trust in the entrepreneur is the ultimate goal, on time arrival is the first trait of relationship building. If I can’t trust you to arrive when you say you will, how can I trust you’ll follow through on other things after the sale? And it’s not just the first meeting that requires promptness, it’s every time. If you’re late for the next meeting, you’re slacking off now that you have my attention. If you don’t have a signed contract, you’re now slipping on the priority list. After the contract signing, stay true. You’re building your referral for the next opportunity.

Leading Edge Business Strategies, LLC is a consulting firm for small businesses. Paul Beaudette is the President and has over 30 years of successful business experience managing companies to sustainable profits and leading companies to productivity and growth.