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How good customer service benefits your business

How good service can help your business

Finding new customers is an expensive business which is why it pays to invest in hanging onto your existing clients. Good service can also give small companies a lead over their bigger rivals. Great service can do wonders for your business.

Talk to your customers

Research shows that businesses spend six times as much on recruiting a new customer as they do on retaining an existing one. Every business - no matter how small - should have a strategy for dealing with customers. Listening to customers can help in all areas of your business from developing new products to finding out more about your competitors.

  • Decide how and when to communicate with customers - by newsletter, telephone, e-mail or questionnaire, at point of sale or delivery, or as a post-sale follow-up;
  • Encourage staff to record feedback from customers;
  • Keep talking to your customers - their opinions will alter over time;
  • Tell customers of any important changes that will affect them. If you warn them of a possible problem in advance they will be able to adapt more easily.

According to the Government's Small Business Service some of the things customers find most annoying include:

  • Talking to a recorded telephone message, being held in a queue or paying premium rates for advice;
  • Having their consumer rights ignored - such as being refused a refund for faulty goods;
  • Bureaucracy;
  • Rude or over-friendly staff - both are equally irritating;
  • Staff who refuse to tell you their name;
  • Broken promises;
  • Inflexible delivery times.

Let staff take control

Have a measurable standard of service and make sure that staff work towards it. Invest in training so that everyone is aware of the importance of customer care. Remind staff to put themselves in the customer's shoes: would you like someone you've just met to call you by your first name, how would you feel if your order went missing?

Encourage employees to use their initiative and let the rest of the business know when something has worked well - or if it hasn't. Taking immediate action - for example sending a disgruntled customer a bottle of champagne - can prove more cost-effective than waiting to write them a formal letter.

Complaints aren't all bad

According to the Industrial Society a satisfied customer tells three or four people while an angry customer passes the bad news on to ten people. However, research shows that if a complaint is dealt with well the customer will also shout a company's praises. Some customer care stories even turn into modern legends - for example the woman who had her iron replaced free of charge because the red light had stopped working after forty years, although the iron itself still functioned.

Make sure you have a proper procedure for dealing with complaints and that everyone affected by it is aware of it. If an invoice is difficult to understand, for example, it would be useful for the finance, stationery and IT departments to know so that they can improve the system.

Customer care should start from the top. Richard Branson has been known to phone a customer to discuss their grievance. Several dinner parties later the passenger was still discussing his conversation with the famous entrepreneur.

Useful links

Small Business Service (a DTI agency)
Business links
For training:

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