December is the last month of the fiscal year and for many businesses, the fourth quarter represents more than half of the total year’s revenue.
Therefore, for many businesses, especially those in the retail segment, the customers served in December are the most important for long-term success. The customers served in this critical period of the fiscal year will share their service experience in one of two ways.
If it is a positive experience, they will tell one or two others. If it is a negative experience they will tell seven to 10 others, and if they have two or more bad experiences they might not return. By walking away, they take their revenue elsewhere.
The resulting ripple effect of negative word of mouth (WOM) advertising becomes the silent killer for many businesses.
This is the beginning of a negative cycle. Customers stay away and they influence others purchasing decisions. The business must increase advertising expenditures to attract new customers. Employees become discouraged and might leave. Recruiting new employees becomes even more difficult once the reputation of the business is damaged.
There are several steps every business can take to avoid the impact of the negative customer service experience.
• Invest in training. Most businesses have customer service procedures that when followed, ensure a positive experience for the customer. Make sure that every service provider is properly trained in delivering the service to the customer in a positive way. There are several models that employers can use to help new employees master the procedures, such as written manuals, videos, online modules, etc.
• Measure the service delivery. Managers and supervisors must be present and available to see that the service standards are being met at an acceptable level. The metrics for each business are different, but without objective data, there is no consistent tool for making corrections.
• Provide feedback. This critical step cannot be over emphasized. The most powerful use of feedback is to recognize those who are meeting or exceeding the minimum standards of customer service. Author Tom Peters, in his book “In Search of Excellence,” coined the term “MBWA … Managing By Walking Around.” Managers are encouraged to walk through the workplace and “catch someone doing something right.” This form of positive reinforcement increases quality of the service delivery.
• Recover the angry customer. Customer service failures are unavoidable. The question is what to do about them. Ignoring failure fans the flame of discord and increases the negative WOM advertising that damages the reputation of the business. Successful companies see these negative experiences as opportunities to correct delivery procedures, retrain employees and to restore the relationship that has been harmed. They follow a three step process: offer a sincere apology, review the details of the experience and fix the problem. Companies who openly and sincerely pursue disgruntled customers often times can turn the anger into loyalty.
The most direct way to increase revenue and profit is to take care of the customers who are currently frequenting your business. It is less expensive and more rewarding to keep the customers you have than it is to find new customers. It is the ultimate win-win.
Michael Boyd is the workforce development and business program manager at Hagerstown Community College. His email is mdboyd@hagers towncc.edu.