Recession – is not a time to stop improving the customer service- it is time to continue and be ahead of the competition!

Overview of the research conducted in Lithuania: “How the companies are changing their customer service management practices due to economical recession?”

SPECT-DIVE (Lithuanian branch of DIVE Group) together with AKA (National Customer Service Association) have conducted a special research at national level in Lithuania in the beginning of this year. It was designed to analyze how different sector companies are changing their customer service management practices due to economical recession. The outcome of the research is that in the long term perspective the customer service quality will decline and companies will loose the input of nearly ten years as they are cutting the costs on main customer service improvement tools such as personnel training, financial motivation and measurement (mostly Mystery Shopping). It proofs, that there is still a big lack of understanding that customer service management represents not only a cost, but an investment leading to competitive advantage and that refusal of systematic approach towards customer service management can result in bigger losses in the future, not only monetary, but also non-monetary like company image, customer satisfaction and loyalty.

1 scheme. What is your customer service improvement strategy for 2009?

2 scheme. What actions will you take while cutting the customer service costs?

Summary of main findings and conclusions of the conducted research:

• Customer service management costs are being drastically cut (67% of companies are cutting, 33% are not cutting)

• In order to cut costs companies are mostly moving from outsource to internal resources and significant personnel redundancies o Comment of author: If companies will be able to sustain same level of professionalism while using internal recourse (which is significantly reduced in quantity as well) – effects after recession is over can be less harmful, but experience shows that internal people can not be professionals in everything – that is exactly why specialized companies are existing in each market

• Mostly companies are cutting costs by refusing (i.e. total stop of using) of main customer service improvement tools like personnel development (training, attending conferences, financial motivation systems) and measurement (mostly Mystery Shopping)

  • Comment of author:
    These named tools are extremely important in order to sustain the systematic customer service management and also are hard to replace with internal recourse professionally

• Companies mainly focus and move to usage of tools that are possible to execute with internal resource and require smaller investment at a time: creation and implementation of SOP (standard of performance), complaint/praise management, internal and non-anonymous audits

  • Comment of author:
    These named tools are needed to use – but used solely without full measurement and personnel development tools, most likely will not guarantee the expected results

• Companies underestimate and do not take advantage to use cheaper but still effective personnel development tools that actually require quite reasonable and affordable investment or are possible to execute with internal recourse, e.g. establishing self-development and self-training systems, individual development (coaching) done by middle level management, online tools (training, testing, etc.)

  • Comment of author:
    These tools usually require motivated and skilled internal recourse people, a bit more internal initiative and patience- but if used correctly can bring sufficient development results and replace classical training and seminars

Main recommendations for companies to focus and think about before they jump into drastic cost cutting in customer service quality management tools:

• If you choose to use internal recourse instead of outsource – you have to be careful and put enough attention to the professionalism of applied tools (use outsourced consulting at least), especially in Mystery Shopping – because if done unprofessionally it can harm more then help; by doing it unprofessionally you risk with all the input of Mystery Shopping program you have achieved so far

• Main goal is to maintain the systematic use of tools – i.e. to maintain the system of steps: measure -> develop -> motivate -> measure… When you need to cut costs – then cut on quantities, try to be more efficient in each step rather then refuse of one step totally

• Focus on quality of the services you still choose to outsource – try to get the value for money

• Be flexible, diversify, try innovative personnel development tools like self-development, online solutions, but do no refuse this important customer service quality management system step totally

• High quality customer service is a way to differentiate and win the competition now, during economical recession, and accomplish even more after it will be over! So continue and be ahead!

article by: Jurgita Adomaityte
courtesy of MysteryShoppingLive.com

Customer Service Proves Key to Retaining Clients

by Dave Dougherty and Ajay Murthy
Harvard Business Review

Superior customer service can be an essential source of strength as companies emerge from the recession, but managers need to understand the extent to which the consumer landscape has shifted.

Weakened brands, customers’ easy access to information about vendors and the erosion of barriers to switching among competitors have combined to create a much more challenging environment for service, whether it’s outsourced or delivered in-house.

Evidence shows that customers will no longer tolerate rushed and inconvenient service. Instead, they are looking for a satisfying experience. Companies that provide it will win their loyalty.

Our recent research demonstrates that when customers contact companies for service, they care most about two things: 1) Is the front-line employee knowledgeable? and 2) Is the problem resolved on the first call?

Yet those factors often aren’t even on customer service managers’ dashboards. Most service centers continue to measure time on hold and minutes per call, as they have for decades. Such metrics encourage agents to hurry through calls, resulting in just the kind of experience customers dislike.

Bad experience = exit

More than half of the customers we surveyed across industries say they’ve had a bad service experience, and nearly the same fraction think many of the companies they interact with don’t understand or care about them. On average, 40 percent of customers who suffer through bad experiences stop doing business with the offending company.

To get a better understanding of what customer experience, managers should draw on a variety of information sources, including customer satisfaction surveys, behavioral data collected through self-service channels and recorded customer-agent conversations.

In addition, companies must revise processes to give agents the leeway and authority to meet individual customers’ needs and provide positive, satisfying experiences.

In evaluating service, managers should measure across all channels the percentage of customer problems resolved within the first contact, determine what is at the root of problems that aren’t settled in one call and make any necessary changes.

They should also aim to have consistently high-quality interactions between customers and front-line employees. That may sound costly, but knowledge management systems, speech recognition for automated calls and other technologies can help to substantially offset the expense.

Forgive and forget? Nope

Some executives believe that irritated customers will forgive vendors and come back for more. Our research indicates that, on the contrary, alienated customers often disappear without the slightest warning.

And as companies rebuild themselves after the recession, this silent attrition represents a host of lost opportunities for future sales and positive word of mouth.

Increase your sales by a simple Hi!

Internet marketing has taught us many new terms, one of which is conversion rate. Wikipedia states that that this is the “ratio of visitors who convert casual content views or website visits into desired actions based on subtle or direct requests from marketers, advertisers, and content creators”. In easy retail marketing language this signifies the percentage of customers that enter a store and actually make a purchase. The subtle or direct request corresponds to a simple greeting, a smile or any other sign of noticing the customer.

Nowadays, if a business owner asks his salespeople what kind of day they had in the store, the regular response is calm and/or quiet. In their eyes, there is no immediate self cause for the empty order books. The big originator of poor sales performances is caused by the current economic crisis. Or isn’t it?

Mystery shopping results show that even during these hard times, sometimes not every customer who enters a store is greeted or noticed. Of course the numbers vary per type of business, but the most remarkable point is that the greeting percentages are not increasing even though fewer customers are entering the stores, thus less busy.

The customer of today is self-informed, price conscious and over-sensitive for arrogant or “not listening” salespeople. This type of customer will not wait patiently unlike yesterday’s customer. Relatively more today customers enter a store with the intention to buy. However, if the customer is not greeted or noticed by a salesperson, their intention to buy remains present but they will be more likely to make the actual purchase online or at a competitor. With this knowledge it is beyond belief that not more efforts are made to at least notice or greet every customer who enters the store.

Of course it is not always unwillingness by the salespeople. In the past, during busy times, salespeople still had plenty of time to go to a quiet office room outside the show room and finish any outstanding orders while their colleagues would handle new customers. Now-a-days there are less colleagues who can assist , which means that they should immediately move from behind desk to the show room and show their presence. Another solution is hiring hosts who welcome all customers and provide them with a drink to make the waiting more pleasant. There are many good and easy solutions which allow customers to feel welcome and acknowledged.

In old sales manuals it was forbidden under any circumstance for an employee to stop and acknowledge another customer in the middle of a sales conversation. Times have changed and if there is no colleague available to assist a waiting customer, a simple “Hi, I will be right with you” or a “sign of notice” will provide just a little bit more time and prevent walkouts.

Truth be told that even a simple “Hi” is too much for some employees. Mystery shopping can be the perfect valuable tool to increase the conversion rate and help employees understand the importance of greeting ALL customers. It makes the actual sale one step closer, more about that in my next column.

Article by Thomas Kascha courtesy of MysteryShoppingLive.com

Service Creates Loyal Customers

In the current economic environment, it is more important than ever to keep customers happy and coming back. An article in News and Food Report recommends these seven ways to keep your customers happy.

1. Solicit complaints. For every person who complains, 26 who feel they have been mistreated do not. Make it convenient for customers to complain and treat them with respect when they do. You can win back most of them by resolving their complaints and, in some cases, make them more loyal.

2. Indoctrinate all service employees, not just managers. Supervisors need training but so do the lower-level employees who provide customer service face to face.

3. Hire people who don’t feel that service is servile and whose values and personalities make them want to provide friendly, helpful service.

4. Commit the company to customer service by word and deed. Regularly remind employees of the value of good customer relations — and reward them when they carry through. Evaluate managers on their ability to achieve customer service objectives that are part of their overall job objectives.

5. Educate employees to provide customer service. Employees aren’t born with the required skills and attitudes. If left alone, chances are they will be oblivious, overbearing and unwilling to give good service.

6. Use simple, inexpensive, entertaining training media. Video is an effective communication tool for the TV generation. Written materials must be simple, clear and concise.

7. Treat employees like worthwhile, sensitive, deserving human beings — just as you expect them to treat your customers. People will behave as they are treated.

Mystery shoppers help sales growth

Daily Local News (West Chester, PA)
By Gretchen Metz

Customer perception is reality.

But what is a customer’s impression when he or she walks through the door of a store, a restaurant or bank? The answer is not in a crystal ball.

Busting the gap between the promise of good customer service and the actual service customers receive in store is the job of Market Viewpoint, a “mystery shopping” service founded in 1996 by Anglea Megasko, a marketing professional for 26 years.

Retailers want to know if customers had “to seek out a sales representative, what was the level of welcomeness, what was the product knowledge, the physical conditions of the store or spa or salon?” said Megasko, whose mystery shoppers report for such clients as Burlington Coat Factory, Longwood Gardens, Goddards Systems and Citadel Federal Credit Union.

The end goal is to ensure happy customers because dissatisfied customers broadcast their displeasure. And as retailers know, Megasko explains, keeping customers is cheaper than wooing them back, and far cheaper than luring new ones.

After 10 years, Market Viewpoint has a database of 100,000 mystery shoppers in the U.S. and Canada. Both men and women, retirees and stay-at-home moms work for the company, which Megasko runs out of her Glenmoore home.

“They are all independent contractors,” Megasko said. “I found from the minute we got an account with a nationwide presence, we needed to be nationwide, too.”

The first few years Megasko said she built her database by word of mouth, asking new shoppers to recommend friends and family. Now with her presence on the Internet, some 200 people a week approach her.

There is no hourly salary, no average take-home pay for mystery shoppers.

“You make as much as you want,” Megasko said. “It depends on how hard you work.”

To make a living at it, Megasko suggests mystery shoppers get on several company’s databases in addition to Market Viewpoint.

And there are a lot of databases to chose from.

According to the 2005 Mystery Shopping Market Size Report commissioned by the Dallas-based Mystery Shopping Providers Association, the industry had an estimated value of $600 million in 2004.

“Almost everyone involved in the mystery shopping industry has experienced tremendous growth in recent years,” said John Swinburn, executive director at the trade association.

Companies that participated in the report experienced an average growth of 11.1 percent from 2003 to 2004 and the average growth in the number of shops during that period was 12.2 percent. The report estimates more than 8.1 million mystery shops were conducted in 2004.

By industry, retail was the strongest at 16.8 percent of total mystery shopping revenue, followed by banking/financial at 14.2 percent, fast food at 14 percent and gas station/convenience store at 11 percent.

The double-digit industry growth between 2003 and 2004 identified in the report is expected to continue, according to a recent survey of mystery shopping executives, the 200-member association said.

But mystery shopping is not for everyone.

The 49-year old Megasko said the job requires, in some instances, that the mystery shopper fill out forms with their name, address and phone number. If the mystery shopper, for example, was on assignment at an apartment complex, bank or day-care center, they might have to fill out legitimate contact information so they will be able to report if the employee did their job and made a follow-up call.

A lot of people are not comfortable giving out that type of information, Megasko said.

Mystery shopping assignments are retrieved on Market Viewpoint’s Web site. Reports are typed in online.

While it is quicker and less expensive than mailing packets of information to workers, running a company via the Internet is not a warm and fuzzy way to do business. Megasko said she misses the personal contact with her shoppers, she misses training by telephone, and answering questions by telephone.

“E-mail speeds up communications but I don’t know the personal things about our shoppers. Our relationships are still stong but it was nice knowing something personal, like a new baby or a death in the family.”

A decade in the mystery shopping business has been challenging for Megasko, who founded the company with her husband’s encouragement when she was between marketing jobs. Managing economic swings, not just for her company, but keeping connected to her clients who were also dealing with a volatile marketplace, kept Megasko on her toes. About five years ago, Megasko incorporated a training program for her clients’ staff, and sometimes, management.

Megasko saw a need. While clients had the mystery shoppers’ marketing reports and had figured out their weak areas, she said some were unclear how to get their staff reconnected to their customers. Now Megasko provides the missing link.

Over the years, the most complained about situation mystery shoppers have reported is when employees do not seem to care the customer is there.

“It is a sense of indifference,” Megasko said. “It is the number one reason that people look for a new place to shop.”