You Will Increase Your Bottom Line Take Home Profits by 25-95% When You Stop 5% of Your Customers from Leaving You and Going to a Competitor

So 82% of people who leave one business and go to another do so because of a customer service issue!

Have you ever wondered why customers leave and never come back?

Most people think it’s because of price, the person moved, the person died, etc… Well you don’t have to look far to find out the REAL reason that customers leave.

A US News and World Report study found that the average American business loses 15% of its customer base each year:

  • 68% of customers who stop buying from one business and go to another do so because of poor or indifferent service.
  • 14% leave because of an unsatisfactorily resolved dispute or complaint.
  • 9% leave because of price.
  • 5% go elsewhere based on a recommendation.
  • 1% die.

The Harvard Business Review reported that if you can prevent 5% of your customers from leaving, you can increase your bottom line profit by 25–95%.

See Ya Later!But what’s really sad for you and me, is that most of those customers who leave don’t bother to complain.  They just leave and don’t come back. Then you’re stuck spending a bunch of time, money, and resources trying to get new customers when with some consistent and persistent messages and training to both your team members and customers, they would never have left in the first place.

It’s been shown time and time again that getting new customers is one of the most expensive things you can do to grow your business.  Once we get a new customer, we simply can’t afford to lose them.

Getting New Customers

But this is great news for you!

Every business category is seeing more and more competition every year.  Just about every category has a version of national chain competition, competition from discount franchises, price competition, and competition from the internet, all making it harder and harder for you to thrive.

But the great news is that in this most important area, the reason most customers leave one business and go to another, you can not only beat the competition – you can crush them. 

To illustrate this, lets talk about mindset for just a bit. Have you ever been asked the following question…

“What do you do for work?”

It comes up all the time, especially when you meet someone new. It’s a natural question, and most people answer almost without thinking. What would you say?

Well, if you’re like most people, you’re going to say something about the product or service you work with. You’re going to focus on the deliverable and there’s nothing wrong with that. But here’s the thing…

That is a large part of what you do at work, but that’s not necessarily the business you are in.

In just a bit, I’ll give you the powerful 2-step strategy to creating happy customers, but I need to go over something else first…

Before you start implementing these strategies in your business, it’s critical to understand that half the battle is getting in the right mindset. You can do all of the right things when it comes to customer service, but truly exceptional customer service  first comes from a way of thinking that is far to rare these days.

Let me explain a little bit…

I used to tell people that we were in the business of selling retailers everything they needed to operate their stores. But I was wrong. Dead wrong.

Make People Happy

In the early 1980’s I watched Tom Peters and Robert Waterman’s video In Search of Excellence.  The video shows first day employee training at Disney World. The trainer at Disney asks the new cast members, “What business are we in?  We know that GMC makes cars, and Whirlpool makes refrigerators.  What do we make at Disney?” The answer is, We Make People Happy.”

From that moment on I knew what business we were in: We Make People Happy. That’s why we call the customer service we provide and teach, Make-You-Happy Customer Service.

By the way, I explain this and more in detail in by newest customer service book. You can get a free copy of my book The Happy Customer Handbook by clicking here.

I’m often asked, “What is the #1 thing business owners can do to improve their customer service?” Another question I get is, “Why is customer service so poor?”

The answer to both questions is the same. To illustrate this, let me tell you about some results we get when talking to actual business owners. When I speak to live audiences I often ask this question…

“What SHOULD you be doing when it comes to customer service training in your business?”

Customer Service Survey

With every audience almost all hands go up for answer (E).

Sounds great right? Everyone knows that their team should have customer service training up front and also reinforce it. But there’s a catch…

We’ve surveyed thousands of business owners about customer service as well.  We ask them the exact same question, but we flip one word. We ask:

“What ARE you doing when it comes to customer service training in your business?”

Only 2% answer (E)!

Why is it that everyone knows their team should have customer service training up front and consistent reminders, but almost no one does it?

Here’s what happens in most businesses.  With the best of intentions, the business owner has a “rah, rah” meeting about customer service, and the service improves for a few weeks, and then without reminders you’re back where you started.

And it’s simple, the reminders don’t come because you’re a busy business owner and you have lots of other things to do.

But this may be even more amazing.  More than 75% of all businesses have no upfront consistent customer service training for new employees.

So the answer to both questions, “What can business owners do to improve their customer service?” and “Why is customer service so poor?” is the same, and it’s all contained in the 2-step process below:

Keith Lee's Free Book

 

The 2 Step Formula to Customer Service Success

1.  Train your entire team to deliver exceptional customer service.

At the very beginning, your entire team needs to get trained with your exceptional customer service expectations. This is the “rah, rah” training I talked about above.  But it can’t stop there.  You need to consistently and persistently reinforce those expectations.

Zig Ziglar says, “Repetition is the mother of all learning.”

Repetition

But learning something doesn’t necessarily lead to behavior change, so when it comes to customer service in your business I tweak Zig’s quotation to,

“When it comes to customer service, repetition is the mother of all learning and permanent behavior change.”

Let’s take a second at this point and look at the bigger picture. Why is customer service so important in today’s business world?

I own four businesses, and all of them are dependent upon small independent businesses for their survival and growth. My businesses can only thrive when their business thrives, so I’m dedicated to seeing that independent small businesses not only survive, but thrive.

At our American Retail Supply 35th Anniversary customer Appreciation Conference and EXPO, one of the speakers asked all 800 people in attendance if they had a unique product that people couldn’t get anywhere else. In the entire room, only two hands went up, and I’m betting their competitors think there is a substitute product.

Almost no one has unique products or services that people can’t get elsewhere, so we need to give them a reason to do business with us rather than someone else. 

The one area you can do that with the biggest return for your effort and money is with Make-You-Happy Customer Service.

I’m not talking about customer service in a box.

Customer Service In A Box This isn’t about the canned, ‘Thanks for shopping at Mega-Mart, have a nice day’ kind of customer service.

We’re talking about Make-You-Happy Customer Service in which, even if you mess up, the customer is going to come back because they like and believe in you and your staff!

We’re talking about the kind of customer service in which customers are not just satisfied, but loyal.  Customer service in which customers not only come back time and time again, but enthusiastically tell others about you.

Another great reason to give Make-You-Happy Customer Service is, it’s fun.

People love getting Make-You-Happy Customer Service.  But people also love, and have a huge amount of pride, when they give Make-You-Happy Customer Service. Make-You-Happy Customer Service is fun for you!  It’s fun for your team!  Your customers love it!  And the day goes much faster when everyone has fun.

Make-You-Happy Customer Service is not just great customer service when you’re watching, but all of the time. In the following video, I explain a few of the reasons exceptional Customer Service is critical to small businesses. After watching it, continue reading to find out the 2nd ingredient in creating exceptional customer service…

2.  Consistently and persistently reinforce your customer service expectations with your team.

First, lets go over consistency:

I spent eight years working in the grocery business.  I thought the company headquarters had consistent customer service messages and expectations, but those expectations were totally undermined when, in the break room, the business manager made fun of customers and joked about how stupid they were – even to the point of making fun of their appearance.

Is it any wonder, that with a few exceptions, our customer service was indifferent?

It’s also no wonder that when a new manager came in with respect for everyone, team members and customers alike, our customer service level improved dramatically along with the business sales.

You must never put down a customer in front of your team members.

Be sure that your signs respect your customers and are positive rather than negative.  Good Signs

Rather than, ‘No returns without sales receipt,’ how about ‘Returns gladly accepted with sales receipt.’  Or ‘Cash Refunds allowed with your sales receipt’ instead of ‘No cash refunds without sales receipt.’  Or ‘Checks gladly accepted with two forms of ID’ instead of ‘You must have two forms of ID to pay with a check.’

So we know we have to be consistent in our customer service messages. But what about persistence?

One day a newspaper reporter asked Zig Ziglar about the “motivation stuff” he was talking about.  The reporter asked, “If someone attends this seminar, would they be set for life when it came to motivation?”  In other words, they were asking, ‘Is motivation permanent?’

Zig’s reply, ‘No, motivation is not permanent, but then again, neither is bathing.  In fact I recommend that people bathe daily, and get a dose of motivation daily.’

The same is true of customer service; I recommend and in fact, Make-You-Happy Customer Service requires that you – company management – are persistent with your customer service message.

You must find as many ways as you can to reinforce your customer service message persistently to both your customers and your team members.

Here are a few ways we’re persistent with our customer service message:

Every contact with a customer that comes from me ends with the sign off, ‘Only Happy Customers Come Back.’ 

Whether it’s a letter, an email, the Retail Tip of the Week, invoice stuffers, or a message to customers in our monthly newsletter, I always sign off with ‘Remember, Only Happy Customers Come Back.’

On eight walls throughout our offices, we have a stenciled quotation from Walt Disney that says, ‘ Do What You Do So Well That People Can’t Help Telling Others About You.’  In addition, we have over thirty Disney prints throughout the office to remind people of the Disney quotation and that our job is to Make-People-Happy.

Disney Quote

On the mirror above each sink in each bathroom, we have a small sign that says,

‘The next person using this sink may be the person who makes your mortgage payment… OUR CUSTOMER. Show him the pride you have in serving him by leaving this restroom spotless.”

We have eight different versions of this with different colors and different sayings.  For instance, a red one says, ‘The next person using this sink may be the person who puts your kids through college – our customer…’  A blue one says, ‘The person who will buy you your next car…’

They are in different colors so that when changed, our team members are more likely to see and read them.  In addition, to ensure our team members see them, we periodically move the sign to a different spot on the mirror.

This not only reinforces our customer service philosophy with our team members and our customers who use our restrooms, but the restrooms are actually kept cleaner.

Here are just a few other ways to be persistent with your Make-You-Happy Customer Service message:

  • Your on-hold phone message
  • Signage throughout your business
  • In your advertising
  • On your web site
  • In emails

So that’s the two step process:

1.  Train your entire team to deliver exceptional customer service.

2.  Consistently and persistently reinforce your customer service expectations with your team.

“So that’s great,” you might say, “but how do I do that? Where do I start?”

It all starts with the little things. In my book, The Happy Customer Handbook, I give 59 secrets to creating happy customers who come back time and time again and enthusiastically tell others about you. These tips are a great way to get started implementing customer service in your business right now.

 

Keith Lee's Free Book

 

So there you have it. You have the 2-Step Process for Customer Service Success and 5 action tips that will help you start this in your business RIGHT AWAY.

Remember, Only Happy Customers Come Back
Keith Lee
keith 2012 shoulders up
www.keithlee.com

P.S. If you want to see the other 54 secrets, you can get them in my book The Happy Customer Handbook. And you can get the book for FREE by clicking here.

What Do Customers Want?

What Do Customers Want?
A survey of 1 million consumers provides valuable insight for today’s marketers.

By Keith Lee

This article was adapted from an article Murray Raphel wrote.  You can find out more about Murray and his works at the end of this article.

In the immortal words of Andy Rooney, “Didja ever wonder…..?”  Today’s question is whether or not you read those weekly polling reports from The Wall Street Journal, ABC News or the bottom left-hand corner of USA Today and wonder how accurate they are?

If you look at the tiny print at the bottom, most say they are based on interviews with about 1,000 people and have a plus or minus factor of 5 percent.  One thousand people?  To tell me if we should have a health plan, how the President’s doing, how many diet Cokes are sold in one day, and how many angels fit on the head of a pin? (Only kidding.)

How can that be?

And so I always look askance at the results of this small sampling.

But when I ran across a survey taken by Brit Beemer and America’s Research Group, I sat up, took notice and read everything very, very carefully.  What made me sit up?  This sentence: ‘The statistics are based on over a million interviews giving valuable insight into consumer behavior and how stores match the needs and values of customers.’

“Whew” — 1 million interviews.  Now is the time for all good merchants to come to the aid of their business by knowing what the customer really thinks of your business — well at least one million of them…

Here are some conclusions from the interviews:

“Customers decide if they feel comfortable to buy in your store.”

And: “4 out of 10 customers judge how much you know by how professional you look.”

What does that have to do with your store?  What is the first impression your customers get when they walk into your store?  What is the first impression they get when you mail them something?

“Most customers know very little about the product you have to sell.”

We recently went shopping for a DVD player.  We asked the salesman in the appliance store this question:  “This VCR is $89.  And this one over here is $149.  What’s the difference?”  And he said, “fifty dollars.”  (now you can’t make that  up).

What does that have to do with your store?  The old adage of, “the more you tell, the more you sell” works for your business.  The more specific you are about what you sell, stressing the benefits you offer, the greater degree of comfort you give your customers.  The same is true with your direct mail advertising.

Years ago, Murray Raphel did a mailer to his customers on children’s yellow raincoats that had a place to write the child’s name on the inside collar.  Since most children at the time wore yellow raincoats to school they are often mixed up and switched.  We emphasized this benefit in a mailing and sold out the coats in three days.

“Most customers say all consumer ads look the same.”

In his advertising class Murray would often place five ads from local supermarkets, with their name cut out, on the board.  Each student is given a sheet of paper with the names of the five supermarkets.

“Match up the name of the supermarket with the ad?” Murray asked.

No no one ever got it right!

What does that have to do with your store?

You need to avoid what Dan Kennedy calls Marketing Incest!  In almost every industry everyone copies everyone elses advertising so it all looks the same and nothing is effective.  Get a Free Trial to Dan Kenndy’s newsletter at www.nobspugetsound.com to find out how to avoid Marketing Incest.

“Customers expect a specialty store to have the largest selection in their chosen product area.”

Many years ago when Murray first started in business, his annual volume was around $20,000 a year.  He couldn’t afford to advertise… anywhere.  But he knew people would shop with him if he had the biggest selection of… something.  He chose children’s hats and gloves because they were so inexpensive.  He put hand-lettered signs on his windows: “We have the largest selection of children’s hats and gloves!”

He soon became known as the store to go to for children’s hats and gloves.  Not big sales, but once in the store the customer might buy a snowsuit – which was like selling 20 pairs of gloves.  They became important, well-known, and business grew.

       What does this have to do with your store?

Be a specialist in what you sell.  It does not have to be merchandise… it can be service.  Murray once asked an elderly woman why she shopped the local pharmacist when the chain store’s prices were lower.  Her explanation: “They say hello to me when I come in.”

The customer is reassured when you offer an in-depth selection of any item.  It makes them feel you are an expert in that field and gives the perception you are an expert in other areas as well.

When Murray bought clothing in Europe the total inventory was less than 10 percent of what he carried.

He promoted, advertised and talked about the European clothing so much that it became the main emphasis of his inventory.  Soon the customer felt everything in the store was imported from Europe.

“Half of America buys with credit, half buys with cash.”

Some of the best and smartest marketers are the credit card companies.  First came the cards.  Then came the affinity cards.  (When you use your credit card you are giving money to your alma mater.  Or the humane society.  Or building mileage on your favorite airline.)  Now there’s co-branding, where the name of your business appears with the name of the credit card.

What does that have to do with your store?

This: The more ways you offer the customer to pay, the higher the return.  Offer cash.  Or check.  Or credit card.  Or lay-away.  Or monthly payments.  Or your own co-branded card.  Better: offer them all and then be sure to include the internet.

“A private sale flyer must scream value.”

Retailers have negatively impacted between 25 percent and 40 percent of their core customers by sending false pretense private sale mailers.  Many businesses are mailing more often and giving less value.

Here’s what customers see as real value: real lower prices.  Deferred credit promotion.  Free delivery.  Free vacation promotions.  Free gifts.  First choice at a warehouse or clearance sale.

What does this have to do with your store?

An old and works-every-time adage: “Make sure the story isn’t better than the store.”  Another one (Cont. P.6 – What Do Customers) to remember: “Promise a lot.  Deliver more.”

If your product has six good selling points, only tell five.  Have the sixth featured when the product arrives at the house or is purchased at the store.

This gives the customer even greater confidence that their purchase is even better than “what you advertised.”

Some other guidelines from the survey:

  • “The number one reason for buying a big ticket item is No Down                      Payment.“
  • “The number two reason for buying is No Interest.“
  • “A very low interest offer will beat out a ‘6-month interest deferred’ offer.”
  • “Radio reaches the youngest audience, newspaper the oldest. Radio is the best medium to create a personality for your store.”
  • “The word ‘FREE’ in an ad has the greatest impact.”

How much attention should you pay to all this information?  A lot.  Remember the basic rule in selling is only one sentence: “Find out what the customer wants… and give it to them.”

For more great tips on customer service, go to TheHappyCustomerHandbook.com and get a FREE copy of my book. I reveal 59 secrets to creating happy customers who come back time and time again… AND enthusiastically tell others about you.

Remember, Only Happy Customers Come Back
Keith Lee

Murray Raphel has been telling the retail direct mail story as a columnist in Direct Marketing for more than 30 years.  He has developed Gordon’s Alley, a multimillion-dollar pedestrian mall in Atlantic City.   

       You can reach Murray at Raphel Marketing Inc., 12 S. Virginia Ave., Atlantic City, NJ  08401.  His phone number is 609-348-6646.

How to Work With an Upset Client

Train All Team Members Who Come Into Contact With Clients How to Work With an Upset Client

By Keith Lee

We’ve used this system to take care of upset clients in all my businesses since 1991.

I suggest you train your front line people to implement the LEAR Principle and the “Make-You-Happy Guarantee” (which I’ll explain later).  You don’t need to advertise this new guarantee when you start.  Simply implement it and see how it goes.  If it works, go with it.  If it doesn’t work, go back to what you have now.

Here is the LEAR Principle

L is for Listen

Listen and don’t interrupt.  There are a lot of reasons we don’t interrupt upset clients.  We don’t interrupt because, number one, it’s rude.  Another reason is that when we’re upset, you and I and everyone else do the exact same thing: We practice what we’re going to say.  And we practice what we’re going to say from the beginning.  So if you interrupt, you’re probably just going to have to listen to the whole thing all over again from the beginning.  Then of course we listen to the client because we respect the client and know that they are, in fact, the boss.  They pay all of our bills.  They give us every raise we’ll ever get.  They pay for our kids’ education and for everything we own.

E is for Emphasize

Empathize means to put ourselves in their shoes.  Say something like, “Wow.  I understand why you’re upset.  I’d be upset, too” or, “I’m sure glad you told me that so we can do something about it.”  Or simply, “Thanks for telling me.”

A is for Ask

Ask, “What can I do to make you happy?”  Now, most of the time you don’t actually have to ask.  Often times it is obvious.  But, sometimes you will want to ask.  The main thing though, is the idea and your attitude of “What can I do to Make You Happy?”  It’s your job to make the client happy.

R is for Resolve

You will want to give your team members guidelines as to what they can and can’t do right then and there to make the client happy.  If what the client wants is reasonable, and it is within the guidelines you give, your team member needs to make the client happy.  Train them to take care of the client right then and there.

I know if is easy for me to say without an angry person in front of me to implement this LEAR Principle.  It’s a lot more difficult to implement calmly and rationally when someone is possibly screaming at you or showing a huge amount of disfavor towards you.  You need to train your team members to understand that the client is upset at the situation and not with them.  Teammates need to be trained to not take it personally.  They need to understand that the client is upset with the situation and not them personally.  Train your team members to take a deep breath, and tell themselves, “This is not me. It’s the situation.”  Train them to talk to themselves and make sure that they are the person who stays calm and collected.  Train them that there is never an excuse ot get angry or short.

If the client is terribly abusive with swearing or something like that, your team member needs to be trained to say, “Sir, if you could watch your language I’m sure I can help you,” or, “Ma’am, if you want to watch your language I’m sure I can help you.”

Now, what if what the client asks for is above your guidelines or is completely unreasonable?  In this case you simply say to the client something like, “I’m going to have to get a manager to see if we can do that.”  Or, “Let me see if my manager can take care of that for you.”  Or, “You know, we don’t have a manager here at the moment who can approve that right now, but can I get your phone number and I can have them get back to you tomorrow morning or whenever is most conventient for you?”

In order to use the LEAR Principle effectively I suggest you empower your front line people with your “Make-You-Happy Guarantee.”  I believe “Make-You-Happy” is the best and least costly guarantee for your business.

Here’s our Make-You-Happy Guarantee:  “When a client has a problem, American Retail Supply team members are trained to ask, ‘What can I do to make you happy?’  In 43 years we have never refused a client’s request to make it right.”

Does this mean we’ll do anything?  Just about.  We’ve never refused a client’s request to make it right yet.  But my guess is that someday someone will ask for something so outrageous that we don’t do it.  Then I won’t be able to say, “In 43 years we’ve never refused a client’s request to make it right.”

I’ve given my seminar, “How to Compete with the Mass Merchandisers” to many different organizations.  Each time I ask retailers if any have a guarantee similar to ours.  In every seminar a few people raise their hands.  Then I ask them how the guarantee works.  Every person, every time answers, “Great!”

Then I ask each of these retailers with the What Can I Do To Make You Happy Guarantee, “How often do people ask for more than what you would be willing to give them?”  The answer is “Almost never,” or “Never!”

If people never, or almost never ask for more than you would be willing to give them, why ask them to jump through hoops, or talk to a manager to give them what they want?

This guarantee will most likely cost you less than a guarantee in which you make an offer to the client.  More often than not the client will ask for much less than you would have offered.  This savings will more than make up for the few times that clients are unreasonable.

You certainly will want to give your staff some guidelines.  Give them a limit as to what they can do without a manager’s approval.  Then, unless the request is ridiculous, train them to take care of the client on the spot!

Again, if the request is ridiculous or over their limit, train them to say something like, “I’m sorry, but I’m not authorized to do that, but if I can get your name and phone number I’ll be sure that our owner gives you a call tomorrow.”

So What Happens When Someone Asks for Something Really Unreasonable?

In my next blog post, I’ll go over some tips on what to do in the rare event that someone asks for something really unreasonable. Stay tuned…

In the meantime, are you wondering where these guidelines come from? And how do you handle other things like greeting customers, talking with customers on the phone and working together as a team to deliver better-than-average customer service? Click here to find out more about how we do this in our businesses.

For a limited time, you can also get a free copy of my book – The Happy Customer Handbook.

Customer Service Expectations

Remember, Your Customers Need To Know Your Customer Service Expectations

by Keith Lee

I get a few phone calls each year from customers who think they are not getting Make-You-Happy Customer Service from us.  Almost all of these calls start with, “I read in your newsletter that customer service is important to you, and I just wanted you to know…” or “A few months ago when I was on hold I heard that you wanted me to call you if I had a problem that wasn’t being taken care of.”

Sure, nobody likes getting calls like this, but in another way I LOVE GETTING THEM!

What’s the alternative?  For most businesses it’s a customer who really doesn’t want the hassle of complaining.  A customer who doesn’t care enough about you to say anything.  The customer who goes to the competition and not only doesn’t recommend you to others, but maybe even bad mouths you.  I love customers who give us the opportunity to MAKE THEM HAPPY.

Another thing you need to be sure to understand is that even though I consistently and persistently tell my clients over and over again to call us if they are ever disappointed and call ME if they are still not happy, just about every one of the people who call me to tell me that we’ve failed them, apologizes for calling.  That’s critical to understand.  You can’t just say this once and expect them to actually let you know when they’re disappointed; you need to tell them over and over and over again.

Find as many ways as you can to tell your customers that you want to know if they are not happy.

I stole an idea from Stu Leonard’s Dairy (which is a supermarket) in Connecticut.  He has a big sign with his picture that says, “What do you like?  What don’t you like?  I’d like to know!”  Every invoice we send out at American Retail Supply has a flyer that asks the same questions Stu Leonard asks: What do you like?  What don’t you like?  I’d like to know!  While it is redundant to send it out with every invoice, we do.  I want to be sure that every customer knows that they should expect Make-You-Happy Customer Service and that I want to know if they don’t get it.

But then, if you’re going to ask for input from customers, you need to act when you get it.  Every customer who writes to us at American Retail Supply, whether it’s a good comment or a complaint, gets a response.

Again, every chance you have, tell your customer you want to hear from them if they’re not totally happy.  Tell them when they are on hold.  Tell them with signs in your store.  Tell them in your advertising. Tell them any way you can think of.

Of course another reason you want to ask for those complaints is so you can fix the things that went wrong in the first place…

But there’s yet another great reason.  Your team members aren’t likely to forget your customer service expectations when they know that your customers know them and that you want your customers to tell you when they don’t get exceptional customer service.

Click here to see more about how we meet and exceed customer service expectations in our businesses.