rethink!

Customer Service Excellence

JEGATHEESWARAN MANOHARAN

How to Increase Business with Existing Customers

If you understand customers psychology, you will know how to respond to their needs more effectively.
In the words of the well respected management guru of our time, the late Peter Drucker: Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. It appears that businesses are either creating something new or bringing those creations to people. Businesses are primarily interested in increasing revenue. We do everything from sexy marketing gizmo, intensified campaigns, advertisements, aggressive sales and even unique packagings or packages to excite, entice and make people spend their dollars with us. But what is most of the time overlooked is the rich area of opportunity that lies among existing customers. People who have had a first hand experience of our products or services and more than that is the experience they had in dealing with our company. The age old question in marketing; Are new customers more important that existing customers? This question is the result of human beings need to always put things in order of hierarchy. In actual fact this is not even a question. Both new and existing customers are still customers. Therefore both are equally important.

Marketing

New Sales

Existing Customers

Service

Communication

Marketing with Customer Service = Profit.

The problem lies in the overemphasis on new sales. This have somewhat sidelined the aspect of customers experience after the sale. Customer service is a department by itself. The purpose is to attend to

Accordia Training & Development partners with its clients to assist in productivity development, organizational alignment and talent development by enhancing the skills, expertise and ultimately the value of the people in the enterprise.
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customers complaints, problems, queries etc. This is where the problem begins. A marketing plan is not complete unless it includes the aspect of customer service. Most of the time a marketing plan comprise of how we can invite, excite and entice people to buy. However when customer face problems with the product or face difficulty in the delivery, the matter is referred to the customer service department. The National Association of Retail Marketing Services produce some startling figures that should be of grave concern to anyone who is serious about their business. This should be viewed as more of an opportunity that exist in existing customers. The sad bit is that only when a significant data shows how many percent of existing customers have gone to the competitor, will marketing pay any attention. In this respect it seems to be more fire fighting than oil drilling. This opportunity can only be realized if customer service is coupled within the marketing framework. As for new sales, yes - it is vital for us to quantum leap our growth. However let us not lose sight of the readily available opportunity, which if we fail to handle correctly, will potentially harm new businesses as well.

A vast opportunity of business exist if we can couple customer service within the framework of marketing.

In order to best reap the potential of existing customers there are two key ingredients to address; 1) Service To handle customers challenges, complaints, enquiries or returns properly. 2) Communication To keep in contact with the customer after the sale. This could be an amazing opportunity to update and introduce customers to new product or offers.

Figures from The National Association of Retail Marketing Services: A company loses 10 customers for every one that complains of poor service. It costs 7 times more to get a new client than to keep an existing one. 13% of people will tell more than 20 people about their bad experience. 90% of unhappy clients will not do business with the same company again. 95% of unhappy customers will return if an issue is resolved quickly and efficiently. Source: The Right Way to Ask for Feedback by John D. Mayfield, Realtor Magazine 06/01/2007

Yesterday people did business with us because they knew us. Tomorrow they will do business because we know them.
Profits come from deep understanding
In his landmark book Good to Great; Jim Collins revealed that companies that moved from good companies to becoming great companies have a very deep understanding of their businesses. It was this deep understanding that ensured their efforts to catapult into amazing results. In dealing with customers, that deep understanding of the customer is super vital. Yesterday people did business with us because they knew us, tomorrow they will do business because we know them.

When you really know your customers and your customers know that you really know them, you can sell them anything. Customers prefer putting their money where they are confident that they can reap the best for their dollars. This does not constitute to mere discounts but a benefit and confidence felt beyond monetary savings. In order to gain a better understanding and subsequently increase business from existing customers, it would be crucial to first understand customers psychology. This would provide an opportunity for us to strategize the process of servicing and communicating with existing customers more effectively.

The Psychology of Human Needs

The subject of human needs have drawn many theories from academic scholars, authors, motivational gurus and spiritual leaders. For the purpose of this discussion we draw our attention to what constitutes the basis of a humans psychological needs. This idea was inspired by Gudjon Bergmanns book "The Seven Human Needs" and Anthony Robbins idea of the Six Human Needs. There are 4 primary psychological needs that require our attention if we were to embrace a better understanding of our customers behaviour

2008 Accordia Training & Development

certainty/ sureness
The need for definiteness. To know what is coming. Having reality to match up to personal expectation. To have what they wanted.

variety/ diversity
The need for variation of emotion or experience. To get pleasant surprises. Experiencing something out or the norm.

significance/ special
The need for attention. To feel special, valued or relevant. Being respected and getting treated as an important person.

connection/ relationship
The need for association. To feel a sense of bonding with other individuals. A need to not feel lonely. To be loved.

and needs. These 4 needs may form a strategy canvas for us to identify the effectiveness of our current service and communication with existing customers. CERTAINTY/SURENESS This refers to how well we restore confidence in a complaining customer or a customer who comes with a defective product. This may also include waiting time whether at the counter or waiting period for replacement product. Another approach is to check on our internal processes and ensure that we are easing customers interaction without creating unnecessary uncertainties. Examples: Accuracy of information provided to the customer by the service officer. Ease of use of the assembly manual for the DIY shelves. Maximum lead time for products redelivery. VARIETY/DIVERSITY Allowing customer to feel different through our interaction. This could be in form of positive surprises when they are least expecting it. Giving them a reason to revisit our offerings. Examples: Birthday cards and text message. New product rage information. Invitation to new product launches. Communication of upgrades or updates. Free gifts on special occasions.

SIGNIFICANCE/SPECIAL Giving the customer due respect and allowing them to know that their business was important. How polite is our service representatives? Courtesy gestures. Welcoming or inviting facility. Internal processes that values customers feedback. Deliberate effort to find out customers situation. Example: Conducive waiting area for customer service interaction. Priority parking for customers. Polite service. Clean toilets. Courtesy call to ensure our product or service is working well after a service or after delivery.

Making Sense and Moving Forward

The psychology of human needs acts in two ways. It can either help us identify what needs to be done or at least check what we intend to do against a reference framework; but more than that it functions as a powerful tool to indicate what we are doing wrong with regard to dealing with existing customers. The real key to increasing our business is the deep understanding of customers situation. By being constantly connected, it will help us know what is needed and what we can change in our offerings to keep customers buying. Whether it means that we need to scrap a product or modify it, increase the ranges or even shift our entire business. Customers do not decide... but having to know what customers are thinking will give us an indication as to what we can offer to them. - rethink!!

When you really know your customers and your customers know that you really know them, you can sell them anything.
CONNECTION/RELATIONSHIP Building a sense of connection with the customer. Making customer have a sense of belonging to our company. Making them feel they played a part in the company. Example: Hand written thank you. User club such as bikers club. Building business relationships. Taking note of customers situation/purchases and making appropriate reference to it in the next interaction.

Jegatheeswaran Manoharan, MSP. is a partner and co-founder of Accordia Training and Development. A mechanical engineer turn consultant, trainer and speaker; organizational excellence is the heart of his work. Contact Jega at jega@accordia.com.my

2008 Accordia Training & Development