Business tips: Don’t go above and beyond

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Exceeding customer expectations doesn’t build loyalty, but fixing complaints does.

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June 16, 2014

Many small businesses throughout the industry run their companies by striving to delight their customers. They believe that the foundation of a great customer experience is to give much more than what they promised in order to build a successful business. They constantly work to surpass their customers’ expectations. This urban myth gets support from the baker’s dozen, giving 13 items instead of typical 12. This was originally done in the 13th century because if merchants cheated a customer, they could lose their hand.

The new book The Effortless Experience: Conquering the New Battleground for Customer Loyalty by Matthew Dixon, Nick Toman, and Rick DeLisi shows that exceeding customer expectations does not in fact increase their loyalty. It does rise when the company goes from below satisfaction to meeting expectations, but the loyalty curve flattens out when the business exceeds what the customer originally wanted.

According to the book, here are the top three ways to lose the loyalty of a customer during the customer service process:

  • 56 percent of customers report re-explaining an issue to the company: Having to re-explain an issue to multiple people at is the biggest turnoff.
    Solution: The company needs to have a system in place (like a help desk data base) to keep track of customer concerns.
     
  • 62 percent of customers report repeatedly contacting the company to resolve an issue. Having to initiate a call back to the company to try to get their issue resolved instead of having the company call them is a huge negative.
    Solution: The company needs to have a system that will notify the staff to follow up with a customer.
     
  • 59 percent of customers report being transferred to another employee. Being transferred from employee to employee to get issue resolution is the worst.
    Solution: The initial point of contact (or secondary one) should be able to handle 99 percent of the issues raised by customers if the staff is trained correctly.

     

So how does a small business then retain loyal customers?

  • Firmly set their expectations.
  • Consistently meet them.
  • Empower employees to resolve a customer concern the first time it arises.


Many companies use surveys to find out if they are meeting their customers’ expectations. Unfortunately, there are only three types of customers who always tell a company what they are thinking:

  1. The very happy ones. They can’t wait to tell how great the product or service is and how it changed their life. They are falling over themselves to express their gratitude in person, by phone or on the web.
  2. The very unhappy ones. They can’t wait to tell how the product or service just “ruined their life” and they wish they never met the company. They too are falling over themselves to express their dismay in person, by phone or on the web.
  3. The people who are paid. Customers love to be “bribed” to tell their opinion. Many retail stores give a $2 to $3 discount on a customer’s next order for simply completing a survey.
     

The majority of disgruntled customers will say nothing directly to the company. They will sulk away and never buy from that company again.

In this case, no news is not always good news. It may be broken and the company may not even know it.

According to Harvard Business Review:

  • 25 percent of customers are likely to say something positive about their customer service experience.
  • 65 percent are likely to speak negatively about it.
  • 23 percent of customers who had a positive service interaction told 10 or more people.
  • 48 percent of customers who had negative experiences told 10 or more people.


So while customers are more likely to complain, see this as a gift. They have taken their valuable time to give the feedback directly to the company instead of just complaining to their friends. The business benefits in two ways:

  1. The company gets a chance to turn their experience around. Surveys show that a dissatisfied customer whose problem is fixed can again become loyal to the company.
  2. The company gets valuable feedback that many other customers have experienced but never mentioned. Customer service is a moving target so customer concerns may change every month.


What should a company do? Listen carefully to make sure you understand the concern. Try not to find blame or hide problems.

Ask customers for their best solutions. Get back to the customer on how it will be solved. Collect all of these concerns so an overall trend can be spotted by the company.

 


Barry helps small businesses get unstuck. His new book is called How to Get Unstuck: 25 Ways to Get Your Business Growing Again. www.barrymoltz.com