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Small Business Review

Your Marketing Edge: Customer Service

By Gary Stern 4/20/07

Superior service can help you beat the big guys For many small businesses, delivering superior customer service isn’t an add-on, an extra benefit or a cherry on the sundae, it’s about survival. Small companies can’t match industrial giants, retail superstores or giant consumer marketers for promotional and advertising budgets. And they usually can’t afford to undersell the big guys. But they do have a powerful marketing tool--enhanced customer service—if they choose to use it.

At Prudence Design & Events, a florist in Manhattan, co-owner Grayson Handy, says its personalized, up to and including accompanying brides to the catering hall, sustains its business. “We’re competing with huge companies such as Teleflora and 1-800 Flowers that have endless pockets to advertise galore and reach millions of people through their websites,” he says.

Taking advantage of a small business’ advantage Still, many small businesses fail to deliver the service that can provide a competitive advantage. “They haven’t understood how creating one-on-one relationships and making their customers feel personally valued and appreciated is what gives them their biggest differentiation from larger organizations,” explains Paul Levesque, author of Customer Service Made Easy.

Levesque suggests that there are two types of small businesses: those that have created a customer service culture and those that haven’t. For example, Levesque describes a customer who goes to two local hardware stores and asks where to find a wrench. One sales clerk is reading a newspaper, barely looks up from the page, and pointing somewhere in the distance, mumbles, “It’s some place in the back.”

At the other store, the clerk looks the customer in the eye and says, “Let me escort you to exactly where the wrench is. And is there anything else I can help you with today?” At the second store the staff knows that “taking care of the customer is more important than any other task,” Levesque concludes.

Levesque points to Webers Restaurant, a hamburger eatery in Orillia, Ont. (75 miles north of Toronto), which offers no training on customer service yet its employees are enthusiastic, motivated, and help create a fun atmosphere that makes diners want to return again and again. Webers “invites employees to come up with their own ideas, which would delight customers and then helps them implement ideas,” Levesque explains.

One day at Webers some of the servers started singing the doo-wop classic “Duke of Earl.” Customers loved it. Now staffers are encouraged to bring their own CDs, sing whatever songs they enjoy, helping customers wile away the time waiting on long lines. Customers have such a good time that they return.

Since the original Weber’s was a fast-food restaurant (they’ve subsequently opened a sit down eatery), staff was not even doing this for tips.

Employee satisfaction breeds customer satisfaction Webers’ management doesn’t reward employees with bonuses for their enthusiasm, so why do they do it? Positive feedback from customers is the number one motivator, Levesque says. “Most small business owners haven’t connected employee satisfaction with customer satisfaction,” he adds.

What do owners derive from this staff enthusiasm? Levesque says, “Consistently high profit margins are one benefit, but the owners and managers also take tremendous pride and satisfaction in the culture they’ve created and sustained.”

Building a customer service culture starts at the top with the owner/operator. If the owner is rude or thinks every customer is out to get him, the staff will adopt those attitudes as well. Conversely, if the owner makes customer service priority number one, staff follows.

Dealing with rude or crabby customers is one skill that small businesses need to master. Lori Jo Vest, an independent customer service consultant based in Birmingham, MI, has seen several employees get bent out of shape when dealing with negative customers. She teaches staff to rethink how they deal with customers, take a step back, be positive, build a personal connection, and not personalize any of their crabbiness.

Some small businesses introduce customer relationship management (CRM) databases to enhance their customer service. StudySmart, a $3.5 million in-home tutoring company in Watertown, Mass., decided to create its own, rather than buying a package from Salesforce.com, Oracle or SA. To support its growth, CEO Richard Enos wanted a system that could help 25 full-time employees and 600 part-timers to offer more personalized service to its clients.

The company started using Microsoft Access and then hired a third-party vendor to work with its director of operations to develop its own CRM. “If you hire someone, it’ll cost $100,000, take hours getting them to know your business and then it’ll take a year before you see the end product,” Enos says. Enos says his proprietary CRM system cost only $40,000.

Using StudySmart’s CRM database, its staff can immediately identify existing clients or students, ascertain their background, and connect students with appropriate instructors. Once a student is in the system, it maintains information on their progress, which leads to selling additional programs. “We can track in real time how a student’s performance is progressing and make program changes based on data,” Enos says.

Repeat business is critical to StudySmart’s growth and Enos says the CRM system has been critical in developing a 60% rate of repeat customers. Enos’s advice: focus your CRM on its benefits to customers, not on its ability to generate revenue.

Whether using CRM or not, staff must be encouraged to put customers’ needs first. Levesque offers these tips on developing a climate where staff understands that meeting customers’ need is their most important priority:

1) Create a culture of customer service; don’t legislate it. Entrepreneurs can’t “legislate,” demand or even instill customer service as a value in their employee; instead it works most effectively when it comes from within the employee. Webers, for example, invites its employees to generate ideas to “delight” their customers and then helps implement the suggestions.

2) Exceed customer expectations. When Levesque recently dined out at a steak restaurant, he told the waiter that the steak was served cold. The server let him continue eating and then brought him a new, warmly cooked steak, exceeding his expectation.

3) Make the customer feel important or valued. At a local drycleaner, when a customer comes in a second time, the sales clerk says, “Hello, Mr. Jones, how can we help?” which sends a very positive message to the customer.

4) Tailor the experience to fit the customer. Webers installed a bench for seniors to rest on while they waited to dine. It was a small, inexpensive gesture, which made seniors feel as if the restaurant was catering to their needs.

5) Involve your staff in problem solving. Webers’ bench arose from a server’s suggestion.

Levesque says that superior customer service drives bottom line results. Why? It delivers “more return business, spreads word of mouth and reduces advertising costs. Moreover, if employees are motivated and fulfilled, it reduces recruiting costs,” he says.

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