customer-satisfaction-is-worthless-customer-loyalty-is-priceless-gitomer-en-5194.pdf

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• Loyal customers are better for your business that satisfied customers.

• Loyal customers regularly shop at your store or buy your service.

• Satisfied customers have no loyalty.

• Among customers who leave your store angry, 91% will never come back and 96% will never tell you why they left.

• If you become a resource for a customer, you can make a friend even if you don’t make a sale.

• If you have an incorrect mission statement or one that employees don’t understand, it can undermine customer service.

• Employees who don’t want to help a customer with a problem frequently invoke company policy.

• The customer’s perception drives results, no matter how hard a customer service representative or salesperson tries.

• Friendliness is a customer service professional’s most important quality.

• The lifetime value of a repeat customer is 20 times his or her annual sales volume.

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Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless How to make customers love you, keep them coming back, and tell everyone they know

by Jeffrey Gitomer Bard Press © 2006256 pages

Leadership & Mgt.

Strategy

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This summary is restricted to the personal use of philippe clarinval ([email protected])

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Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless © Copyright 2007 getAbstract 2 of 5

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What You Will LearnIn this Abstract, you will learn: 1) Why loyal customers are more important than satisfied ones; 2) How to build customer loyalty; and 3) How to improve customer service.

RecommendationSales books should be a separate genre. They are meant to be easily read, inspirational, rhetorical and instructional. The more qualifi ed the salesperson-author, the more authoritative the advice. This one has all these qualities, plus author-salesman Jeffrey Gitomer has displayed his counsel like a visual party. Almost every page boasts a new typeface and layout. Some pages look like poems. On other pages, he makes suggestions he calls “self tests,” “scorecards” and “reality checks,” while on others he provides questionnaires. This is deliberately more of a jazzy series of lists than a narrative outlining a new approach. Still, getAbstract endorses its solid common wisdom: To engender customer loyalty, treat people as you would want to be treated.

Abstract

The Price of LoyaltyMost companies mistakenly measure customer satisfaction ratings instead of customer loyalty. Satisfaction ratings may be as high as 97%, but that still means that 3% of your customers are free agents in the marketplace. They will shop anywhere. They may be satisfied, but that does not mean they are loyal. The challenge is to develop loyal customers who shop only at your store, buy only your service, advocate for your products and refer new business to you.

Companies should provide exceptional customer service routinely, but, in reality, it is so rare that people write books about it. To deliver exceptional service, you have to know your customers and understand what they want. Customers seek value, good communication, reliability, assurance, empathy and help from employees with good attitudes. When you don’t meet these needs, customers might get angry and refuse to buy your product. Companies often take customers for granted. Actually, your customer is more important than your boss. Customers pay your company when they buy your goods. When they don’t buy, your income is in jeopardy. To earn customer loyalty, deliver memorable service consistently. Loyalty must be earned. Without it, you could get fired by your real boss: Your customer.

Building loyalty is a process based on understanding the customer, creating memorable impressions and living up to your commitments. Positive surprises can also build lasting, positive connections. Large corporations rarely offer exceptional service, giving small entrepreneurial companies a special opportunity to woo customers. In businesses of any size, poor service occurs when management provides bad training or unhappy employees act out their misery.

Why Customers QuitCustomers terminate their relationships with your company for many reasons. Perhaps you did not show interest in their predicaments or willingness to solve their problems, and then you left them wondering how they got into such dilemmas. Maybe your

“If you listen to corporate America blow their own horn, they’ll tell you…customer satisfaction is at an all-time high. The fact is, customer loyalty is at an all-time low.”

“The customer only wants two things – show me you care about me personally, and tell me what you’re going to do for me now (help me, please).”




response was too slow, or you were unavailable or unfriendly. Customers often complain about being treated rudely or being given promises that employees fail to keep. This breach of trust raises serious issues about the basic buyer-seller relationship. Customers also leave because employees can’t solve their problems, use high-pressure tactics, act unprofessionally, or offer poor products or services.

Studies indicate that 91% of customers who leave your store angry will never come back and 96% of them will never tell you why they left. Tales about terrible customer service can take on lives of their own and become local horror stories that survive for years. However, 80% of dissatisfied customers will return if their problem is corrected.

When your customer service begins to degrade, find out why. The most common reasons are because you have an incorrect mission statement or one your employees don’t understand. You may have rules about dealing with customers, but no guiding principles. When employees understand the principles behind customer policies, they have more latitude to deal with problems. Customers grow increasingly more disgruntled when they hear excuses about why their problem occurred or when they encounter rude employees. Service also suffers when management is out of touch with customers or employees are poorly trained.

When employees don’t want to help customers, they frequently blame company policy. The common refrain is that company policy prevents the employee from solving the customer’s problem. In one case, a man wanted to buy a house directly from the owner without using a real estate agent. The buyer and seller reached an agreement but then realized that they did not have a real estate contract. The seller called a real estate agent who refused to give him a blank contract, citing company policy. Then the seller contacted another agent who gave him a blank contract, answered his questions and helped him complete the form. When that deal went sour and cast him back into the market, he naturally called the agent who had helped him. That’s a powerful lesson. When you are a resource for a customer, you can make a friend even if you don’t make a sale.

How to Become a Customer Service SuccessUse these 12 methods to deliver outstanding customer service:

1. Recognize that your customers are your paycheck – Acknowledge their importance. The more you do for a customer, the more you will get out of the relationship.

2. Maintain a good attitude to reap positive results – Customers who observe your enthusiasm will respond in a friendly manner.

3. Swiftly provide assistance when a customer calls – List the reasons why customers call, develop good responses to each inquiry and show your willingness to help.

4. Develop repeat customers – Their lifetime value is 20 times their annual sales volume. Thus, the lifetime value of a $10,000 customer translates into $200,000. Continuous education and service are the keys to this long relationship. This fact reveals a major inconsistency in customer marketing: Businesses spend 90% of their marketing budgets attracting new customers rather than satisfying existing ones. The cost of replacing a lost customer is 10 times more than the expense of attracting a new one.

5. Focus on customer loyalty – Reorders are easier to get than new business laboriously drummed up from costly advertising or cold calls. To secure a reorder, develop a strategy that keeps you in front of the customer as a constant resource. If you develop a positive, productive relationship, the customer will reorder. This is the first step in building customer loyalty.

“The customer could care less about you, your company or your company policy, and even less about ‘why you can’t’ give them what they want.”

“In service, it all boils down to the one word customers want to hear…yes.”

“Service is a feeling, and you know what it is – whether it’s good or bad.”

“Shouldn’t it really be called ‘customer helping’ rather than ‘customer service’?”




6. Realize that having a satisfied customer is not a valid goal – Satisfied customers will not necessarily become repeat customers. To learn how to convert a satisfied customer into a loyal one, ask your 10 best customers why they like dealing with you. Then, ask your suppliers the same question. Compare the answers and proceed accordingly.

7. Find out what customers are saying about your company – You may be surprised, but remember that you can determine what others say about you, positive or negative.

8. Respect the power of word of mouth – What customers say about your company is 50 times more powerful than advertising. Word-of-mouth has more credibility than ads, yet many companies don’t spend as much on the messages these face-to-face encounters transmit as they spend on advertising. Ask your customers what they say about you and why. If they say negative things, address those problem areas quickly.

9. Be a friend and a resource; offer prompt, authentic responses – Your customers will respond to you in the same way and will want to do more business with you.

10. Avoid using the word “policy” when dealing with customers – They know that a policy is written to benefit the company. When you can “bend” the policy to help customers, you’ll generate a positive response.

11. Provide good service so the customer has a positive reaction – This warm feeling improves your customer’s sense of self-worth.

12. Offer solutions – not excuses – when you serve customers – People appreciate your genuine attempts to help them, so be positive when you start conversations, and quickly suggest the best, fastest way to resolve problems.

The customer’s perception is always right. The reality is that, no matter how hard a customer service representative or salesperson tries, the customer’s perception drives results. To test how others see you, call your company’s customer service department and see how they treat you.

Making FriendsCustomer service professionals must be friendly. This trait is hard to teach, but employees can learn some techniques by practicing good responses to common customer problems. Have them create a friendly greeting or solve a problem. Hire people who are cordial and positive about helping people. Once you establish this attitude, make it permanent.

To differentiate your level of service, be memorable and extraordinary. You want customers to say “Wow.” For example, “wow” moments can happen when a representative is especially helpful, creative, enthusiastic, courageous, genuine, honest or knowledgeable. A woman went to a Les Schwab store to buy tires during a rainstorm. A salesperson with an umbrella ran to her car in the parking lot and walked her into the store, keeping her dry. She was impressed by the service she received even before she made a purchase. She later told her friends about this exceptional service and the store gained more business as a result.

Be empathetic. When you hear a customer’s complaint, agree emphatically and say, “Oh, that’s horrible.” This defuses the situation, shows that you concur and sets the stage for resolving the problem. Don’t ever cite company policy to a customer or list reasons why you cannot help. Take responsibility for the problem, stay engaged with the customer and then solve the problem. If you ignore it, you will lose the customer. Act professionally. When you encounter angry customers, recognize that their anger is business-related, not a personal attack.

To create memorable customer experiences, go the extra mile. When a mistake occurs, turn a negative into a positive by making an extra effort to rectify it. For instance, if an

“Every time a customer calls you, or you call a customer, you have an opportunity and a choice to be great.”

“The easiest way to breed a loyal army is to recruit them one at a time – here’s the magic answer – have every person in your company who talks to a customer ‘make one customer ecstatic every day’.”

“If you want customers forever, become valuable, become a resource they can’t live without.”

“A re-order is 100 times easier to get than a sale from an ad or a sale from a cold call.”




item is out of stock, call other stores and have it delivered to the customer. If you work at a hotel and a guest’s room is not ready when he or she checks in, offer a voucher for a complimentary breakfast. Turn a negative into a positive. Build a favorable set of stories that happy customers can share with their friends.

Repeating SuccessesBuild a repeatable high level of customer service by establishing benchmarks that help you elevate standard service responses into exceptional events. Constantly improve your everyday ways of doing business, starting with the way you greet customers and handle complaints. For example, when a guest checks into your hotel, introduce yourself and ask the customer’s name. Then, at every handoff to another hotel employee until the guest actually enters the room, everyone can address the guest by name. This simple process creates a memorable mini-event.

Conrad Hilton, the “father of the hospitality business,” made a name for himself by providing exceptional service. During World War II, when hotels were scarce and many people were traveling, Hilton noticed that the hotel he was managing had a sign in the window reading, “No Rooms Available Without Reservations.” Hilton thought the notice was inadequate, so he set up an accommodations desk to help guests without reservations fi nd rooms at a competing hotel. He won the admiration of many travelers. Hilton also provided a temporary room for guests who checked in before their rooms were ready, to give them a place to change clothes. To deliver memorable service in the hospitality industry, make guests feel special, important and at home, and show them that the hotel is interested in their well-being.

Sign LanguageMost businesses post signs telling customers what they should NOT do: “No Shirts, No Shoes, No Service” or “No Parking.” Few businesses have a “Welcome” sign on the door. If you go to a hardware store’s sign department, you will have diffi culty fi nding signs that say “Welcome” or “Thank You.” In fact, most business owners never review their signage. If you want to set a positive tone, remove any sign with “don’t” or “no” on it. Replace those signs with a positive message to set the tone for guests, employees and visitors. Encourage employees to acknowledge customers when they enter the store.

At the individual level, perform a self-assessment by asking yourself if you have these skills and present these qualities: A pleasant personal appearance, good speaking skills, the ability to establish a relationship, a positive attitude, good product knowledge, a desire to be helpful, a sense of humor, sincerity and a good reputation. Most people have some of these traits, but if you want to improve any shortcomings, read some of the classic books on self-improvement, such as Dale Carnegie’s How to Win Friends and Influence People.

You can become a better service provider if you have a positive attitude. To achieve your goals over the long-term, you must have a vision, study what you want to be, love what you are doing, strive to be the best, have the right attitude about money and set personal goals.

About The Author

Jeffrey Gitomer gives seminars and speeches, and runs annual sales meetings and customer service workshops. He wrote the bestsellers The Sales Bible and The Little Red Book of Selling.

“Your ability to accept change is at the fulcrum of your ability to succeed.”

“If you wouldn’t say it to your grandma, why would you say it to your customer?”



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