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I'm sure you have heard that "word-of-mouth" is the best advertising you can get. This is true, but sometimes those same words can be your worst enemy. When a client is satisfied he will recommend you to the people who ask. But if he has a bad experience, he'll tell anybody who will listen!
Your goal is to make sure that everybody who has contact with your business in any way is left with a good impression! This means suppliers, people seeking information, and especially current and potential customers.
Unfortunately, it's all too easy to create a negative impression, and the most common way to do that is with poor customer service. It doesn't matter what size or type of organization you have; there are certain things that should never happen.
1. Although it may be important to qualify potential customers for some products or services, no prospect should ever hear the words "You can't afford it", or similar comments. Be tactful when making a decision about such things, and remember that you may not always be able to tell based on appearances. Never allow a customer to feel that he or she isn't worth your best effort.
2. Don't say negative things about a previous customer. You never know who may overhear the comment, or if it will be passed on. And if you make ugly comments, the person you're talking to will wonder if you'll say ugly things about him.
3. Never let a customer's comment (especially a complaint) go unanswered. Thank them for their suggestions. And always follow up on complaints. Every company will occasionally be confronted with a client that just can't be satisfied, but often a complaint is an opportunity to build customer loyalty. If he believes you care about his concerns and that you are doing everything you can to make things right, he will usually regain a good impression.
4. If you have employees or representatives, make sure they are well trained and have proper incentives to represent your organization the way you want to be known. Nothing upsets a customer more than to go to an establishment and be treated rudely. And most non-profit and service managers will never know how many clients or supporters they lose because the person answering the phone or greeting them acts like they aren't important. And above all - never argue with a customer!
These are just a few examples of things that can create a negative view in clients' minds. Make sure you avoid them!
Doing it right means cultivating customers so they all feel appreciated, by developing or improving products to meet each customer segments' needs. Result: pleased customers and higher profit.
Doing it wrong creates risk of sub-standard service for "unimportant" customers, making them feel unappreciated and resentful. Result: missed profit opportunities and disgruntled customers.
Brand Image
When deciding how to service each customer segment, remember that every point of contact with a customer reflects on the brand, regardless of customer "importance." Over time, this has an impact on brand image and company reputation.
With the Internet so prevalent today, each individual has more power to voice his/her opinion than in times past, which directly impacts brand image and goodwill associated with the name. Each mistreated customer has the means to tell the world of her/his experience on Web sites that allow reviews (such as bizrate.com and Amazon.com) and online discussion forums.
An Example of Bad Service From the Customer Viewpoint
The way each of my credit card issuers treats me is a prime example. I always pay my bill in full (often early) and belong to the "cash back" rebate programs, so I imagine I'm in a similar customer segment for each and would expect to be treated similarly by these three competitors.
Not the case. Two of the companies make me feel like a valued customer. The third made me feel so unappreciated I closed the account. How the three companies handle "suspicious" activity on my account demonstrates the varying degrees of service:
- Discover card has a fraud specialist (or customer service representative) call me in person to ask that I review recent transactions with her/him.
- Citibank's computer calls me with an alert, asking that I call a number or go online to verify transactions through a computerized process.
- Advanta locks the account and sends a letter informing me they have done so. In my experience, the letter arrived a week after the incident and I was not notified by telephone (I called them when the "offending" vendor notified me of the decline). I asked customer service to allow future charges from that vendor, but they could not do so. Presumably, this meant an account freeze each time my authorized vendor attempted to process a legitimate charge.
All three of my card companies require that I take some sort of action to verify suspicious charges, which is to be expected. The approach, however, leaves a very different impression. Citibank and Discover both apologize for the inconvenience of transaction verifications and -- while I have to go through an extra step with Citibank -- both fall within my subjective definition of quality customer service. Advanta, however, does not apologize for the hardships of declined transactions and a frozen account.
To be fair, I do not know that my negative experience would have been handled differently if I were in a more profitably customer segment. It could have been result of badly trained customer service representatives, or perhaps this is standard procedure on all accounts.
Tips for Segmenting Customers Without Sacrificing Service
Customer segmentation is a good thing. It helps you recognize how customers are different and it should draw your attention to needs of different segments, prompting you to better meet those needs. Some ideas on successful segmentation:
- Segment by need rather than profit or revenue. A low-profit customer today could be high-profit tomorrow if you offer products and services that fill her/his needs.
- Look for ways some customer segments can effectively be more "self-service," which cuts costs for the company while meeting customer service needs.
- Build in ways to create exceptions in automated customer service processes, so as not to alienate those with special situations (in my example, by allowing a way to preauthorize account activity).
- If offering promotions, rewards, or other incentives to some segments but not others, "spell it out" for customer service representatives and structure your Web site and promotional mailings accordingly. By taking steps to assure customers receive consistent information across all channels of communication, you avoid customers being exposed to offers for which they do not qualify.
There are ways to segment customers without lowering customer service. By doing so effectively, you nurture business growth and reputation.