Moments of Truth, Misery & Magic
In 1986 Jan Carlzon, the former president of Scandinavian Airlines wrote a book, Moments of Truth. In his book, Carlzon defines the moment of truth in business as this:

"Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity to form an impression."

From this simple concept, Jan Carlzon took an airline that was failing and turned it around to be one of the most respected airlines in his industry. Some examples of moments of truth in Jan Carlzon's airline business are:

when you call to make a reservation to take a flight,
when you arrive at the airport and check your bags curbside,
when you go inside and pick up your ticket at the ticket counter,
when you are greeted at the gate,
when you are taken care of by the flight attendants onboard the aircraft,
and when you are greeted at your destination.

All of these are main moments of truth, and notice that they are all controlled by people. There are many moments of truth that are not controlled by people, such as advertisements (radio, television, billboards, newspapers, etc.) The emphasis of this article is on the moments of truth that we, as people, have control over. These are the points of contact that our customers and clients have directly with us and our organization.

Mentioned above are a number of the main moments of truth, not just at Jan Carlzon's airline, but in virtually all commercial airlines. These are the main ones. And, while these may be the most important, there are lots of small ones as well. For example, you might be walking toward your gate at the airport and walk by one of the Scandinavian employees. They look up and smile at you. Now, that may be a small moment of truth, but it is an important one. It adds to the total experience of the customer.

Disney has taken the small moments of truth to an even higher level. They understand the importance that these small moments of truth have on their customers. They train their cast members (Disney's term for employees) to acknowledge the guest (Disney's term for a customer) with a smile or facial expression if within ten feet. If the cast member gets within five feet of the guest, they are to acknowledge them verbally. All of the little moments of truth, combined with the major ones, with the addition of the product or service your organization is selling, add up to the overall level of a customer's satisfaction.

Jan Carlzon said there are good moments of truth and bad moments of truth. I believe there is a third type -- average moments of truth. Average is middle of the road, simply acceptable, but not great. I have a term for the good and bad ones. The bad ones are referred to as Moments of Misery, and the good ones are referred to as Moments of Magic.

Our goal should be to create all great moments of magic, even if they start out to be moments of misery. Sometimes a customer may have a legitimate complaint. We not only need to fix problems and complaints, we also need to give customers a reason to want to come back and continue to do business with us again and again. Even if we fix a problem, it doesn't mean the customer is coming back. For example, if you own a restaurant, and one of your guest's meals is over-cooked, don't simply fix it or take it off of the bill. Consider giving the guest a business card with a note that gives him or her a round of drinks or a free appetizer the next time they come back.

At times these moments of misery may not even be our fault. The customer may just be having a terrible day. For example, a customer may be checking into a hotel. This person may have had three flights delayed and he or she is in a very bad mood. It is not the hotel's fault the customer is unhappy due to the airline's delayed flights. But, it is the person who is checking in this irate customer's opportunity to start to turn the customer's mood around. It is an opportunity to take someone else's moment of misery and turn it into the hotel's moment of magic.

So, manage your moments of truth. Seize every one of them, even if they are moments of misery, as opportunities to show how good you and your organization are. This will go a long way in building long term customer loyalty and total customer satisfaction. top of page


The Satisfied Customer is a Dangerous Customer
What is a dangerous customer? It is not necessarily a customer that is threatening you with a knife or a gun. (That is not just a dangerous customer, but a dangerous person.) What we are discussing in this article is the customer that puts you into the "danger zone" of lost business. We aren't talking about customers who have a complaint about you and choose to tell everyone they know. We are talking about that potentially very dangerous type of customer, a "satisfied" customer.

But wait! How can we be in danger of losing a satisfied customer?

Recently, two professors, Anthony J. Zahorak and Roland T. Rust, from Vanderbilt University in Nashville, Tennessee conducted a study on customer satisfaction. What they found was that approximately 25% to 40% of satisfied customers do not come back to the places of business where they have been satisfied.

Wait a minute! Why would a satisfied customer not come back? The answer is very simple. Because, they were simply satisfied. Everything was satisfactory, nothing great, just okay. For example, you may have gone out to dinner at a restaurant. The next day a friend asks you about your meal and you tell them it was okay. Nothing special, simply average. Another way of putting this -- satisfactory. Will you go back? With all of the choices of places to dine and spend your hard earned dollars, probably not. No, unless you are a glutton for punishment, you will most likely look for the restaurant that gives you a great meal, great service and exceeds your expectations.

The types of businesses that the Vanderbilt professors looked at were typical front line, consumer oriented businesses such as restaurants, hotels, movie theaters, retail stores, etc. It is obvious that not all businesses fall into one of these categories, but the principle still holds true. Anybody or any company that has any type of competition needs to understand that having satisfied customers creates vulnerability. Not only do you have to exceed a customer's expectations, but you also need to constantly be improving on what already may be great.

What worked yesterday does not work today. If you are doing something better than your competition you can bet that they will be doing the same thing very soon.

The hotel industry is a good example of this. Many years ago the typical hotel customer didn't have the expectations or make the demands for great service that they do today. All the customer wanted was a clean room with a television set and a hot shower. Then one day a serious competition for hotel customers began. Rate wars began. Less expensive rooms may have been was one way to compete, but not necessarily the best. There had to be more.

One day a sharp hotel owner decided that amenities could create a competitive edge. It worked! It started out to be simple; thicker towels, fancier soaps, etc. Then the competition, the hotel "across the street," figures out what was going on, and not to be outdone, copied. The next wave of amenities were sparked, such as better candy on the pillows and a newspaper in the morning -- and not just one paper -- but perhaps a choice of different newspapers. At what point did it stop? Eventually, everybody was offering the same thing. It was at that point that the biggest difference between one hotel and another had to do with the people that worked there. The hotel employees became the ultimate "amenity."

If what you sell is great, but your service is mediocre, then the best you can expect is limited success and eventually total failure as competition comes along and takes care of the customers by giving better service. But put a great product in the hands of people willing to go beyond typical levels of customer service and you get beyond being simply satisfactory.

Today's customers expect more than satisfactory experiences with the people and organizations they do business with. Every company has their version of a "hotel's amenities." Just about every business claims to give good or great customer service. Good service has become the norm. An organization has to go beyond satisfactory or just acceptable levels of service. Terms used to describe this higher level of service have been knock your socks off service, delighting the customer, and many more. Get your customers out of the danger zone. Go beyond simply satisfying your customers and you will create many MOMENTS OF MAGIC!
top of page


Speed: The Differentiation Factor between Great Service and Even Greater Service
Speed has become a differentiator between great service and even greater service. Speed and quick response need to somehow be integrated into virtually every business. People want things fast. You may remember the quote --

"If I wanted it today, I would have asked for it tomorrow!" -
The Boss

One of my favorite stories about "speed" is about a mail order computer company, PC/Mac Connection.

One night a friend and I were having dinner. He was telling me about his new high speed computer modem. (A modem is the device that allows your computer to hook into a telephone line.) He was telling me about how fast the modem was compared to his old one. It wasn't that expensive and I had to get one.

I asked him where he bought his. He told me PC/Mac Connection. I said that I would pick one up the next day and asked where they were located.

Then he told me PC/Mac Connection was a mail order company located in New Hampshire, and as soon as he was home, he would call and give me their toll-free number.

At 11:00 that night my friend called with the phone number. I immediately called them to order the modem. At midnight, their time, a very nice person answered the phone. I placed the order, gave her my credit card number and went to bed.

The next day at 8:30, there was a delivery man at my office door. He had a box from PC/Mac Connection.

Wait a minute! I just ordered this modem 9-1/2 hours ago! How could they deliver it this fast? Even more amazing was that the computer store down the street didn't open for another thirty minutes! How did they do this? Well, the answer is really simple. PC/Mac Connection realized that even though they were based in New Hampshire, their warehouse didn't have to be. So, they positioned the warehouse adjacent to one of the overnight delivery companies. When the order was placed and confirmed in New Hampshire, a label with a part number was printed at their warehouse. All the warehouse person had to do to fulfill the order was to stick the label on the correct box and deliver it next door. As long as the order was processed before 2:00 a.m. it could be on one of the overnight delivery company's planes that took off at 3:00 a.m.

Think about how impressive this is. Just a few years ago, mail order used to take 4-6 weeks. You were excited if you received it within a few weeks. Then the turn-around time became less, 2-4 weeks. Then it was "mailed out" within 24 hours which meant you received it in 4-5 days. Today the benchmark is OVERNIGHT service.

One way to incorporate speed into your business is to learn to anticipate what your customers needs will be. Be proactive versus reactive. For example, a waiter at a restaurant will watch a table to make sure the customers are being taken care of. Rather than wait for the customer to ask for another glass of water, the waiter is pouring a new glass before the customer has a chance to ask.

Think of the many ways you might be able to use speed in your business. It might be as simple as returning calls quickly. Turning around an order for a customer more promptly. If you are in the parts business, there might be a problem with a part for a customer, so ship out a replacement part the same day -- not even waiting for the broken part to be returned. Getting a report out quicker than expected. There are lots of ways!

Speed or quick response is a powerful differentiator. Not too many years ago the big differentiator was customer service. Customers looked for and found companies that provided good customer service. Now that many companies are effectively using service to their advantage, you need to find other things to take you and your organization beyond just good service. In other words, customers are not just looking for companies who give good service compared to their competition. They are looking for companies who give better service than the competition.

Faxing, e-mail, courier services and overnight mail have created a sometimes challenging expectation of fast service. Find different ways to incorporate speed into already great service and you will raise yourself to the next level, exceeding your customer's expectations, and when you do that, you will be creating a MOMENT OF MAGIC.
top of page


The First Impression
Some of my clients ask me if there is one simple thing they can share with their employees that will make the biggest impact for better customer service. This is not easy, as there is no quick fix for problem service or some miracle elixir that by magic will transform an organization into a first class customer driven company. It is a combination of many things put together. But there is a simple concept. It falls back on the original concept of managing the Moment of Truth and creating Moments of Magic.

The simple concept I am talking about is has to do with managing the first impression. I am not talking about meeting someone for the first time, although that is obviously a first impression. I am talking about the first impression we make that may set the tone for any interaction that is to follow.

Here is a very basic example. When you walk into work in the morning, how do you greet your coworkers? Do you strive for a positive early morning greeting? Or, are you one of those people who claim not to be an "early morning" person -- at least not until you have had your three cups of coffee? So, what if you are not an "early morning" person. Your goal is to make the people you work with want to be around you the rest of the day. Your early-morning greeting is simply setting the tone for any interaction that is to follow.

How do you dress for success? Dressing for success does not mean wearing a business suit, tie, etc. It means dressing appropriately for the situation.

What do your body language and facial expressions tell people? Body language, eye contact, facial expressions are read, sensed and interpreted by those around you.

How do you answer the phone? Do the people calling you feel that you welcome their call, or do they feel as if they are an interruption?

All of these, and more go toward setting a positive "first" impression.

My assistant, Lois Creamer, called to congratulate a business associate on an outstanding news article that appeared in the St. Louis paper about his company. Let's call this person Bob.

Bob answered Lois' phone call curtly. Lois immediately knew he was busy and started to feel uncomfortable. So, she just said, "Hi Bob, it's Lois Creamer from Shep's office."

Bob said in a sharp, almost angry tone of voice, "Lois, I am real busy and I can't talk."

Lois said, "I can tell. All I wanted to do was congratulate you on the great article in the paper. Good-bye."

There was a moment of silence as Bob realized that all Lois wanted to do was compliment him. He sheepishly said, "Good-bye."

In this case, Bob got a double whammy. He not only gave off a negative first impression with his curt greeting, but he also caused himself a lot of embarrassment.

By the way, Bob called back later to apologize about the way he acted on the phone.

What if the person calling Bob hadn't been Lois, but instead an important customer? Would he or she have been as forgiving as Lois? Imagine the "back peddling " Bob would have had to do to get the client to feel comfortable with having called him.

Hopefully Bob learned a lesson that day. If he was too busy to answer the phone he should let a receptionist or his voice mail pick it up.

As mentioned before, these first impressions come in many forms beyond greetings. Pay attention to what your non-verbal actions are saying. Managing the first impression simply lets you start off on a positive note. Why should you start a conversation or a meeting at a psychological deficit?

It has been written that it takes many more good things to make up for a single bad thing in business. Most of the statistics range between eight to twelve good things to make up for a Moment of Misery. One good thing does not fix a bad thing or make things even. You have to go much further than getting back to even to renew the confidence in a customer.

Managing the first impression is so simple, so why make it hard on yourself? Simply manage the impression and set a positive tone for any interaction that is to follow. It all helps toward creating those MOMENTS OF MAGIC for your customers.
top of page


Understanding Your Customer - Think Like the Buyer
I wrote a poem. It goes like this --

Think like the buyer, not like the supplier.

That is it. That is the title, the poem, the whole thing. I would have written, "Think like the customer, not like the -- " But, I couldn't come up with a word to rhyme with customer!

What I mean by this short phrase is that sometimes we think we know what our customers want, but what they want is something completely different. So we need to get inside our customers' heads and give them what it is that they want versus what it is that we think that they want.

How do you get inside their heads? Well, we don't do this by using ESP to read their minds. It is much simpler than that. We simply think and come up with the right questions to ask to make sure we are giving the customer what it is that they really want.

For example, I used to work at an auto parts store, and one of my responsibilities was to work the counter. People would come in and buy parts. They would tell me what part they wanted and the make, model and year of their car. I would look up all of this information in a catalog -- back then we didn't have the luxury of computers to do this -- run in the back of the store and bring up the part.

Well, one day a wanna-be mechanic walked into the store. He asked me for a part for the "right side" of his car. Some of you may laugh, but there are certain parts that are different for the right and left side of the car, and if you are a mechanic, you know which is the right and left side. Well I looked up the part number and brought up a box that even had the words right side stamped on it. An hour later he came back to return the part because I had sold him a part for the wrong side of his car. Oh, he must have wanted to buy a part for the other right side!

Think about it. If you are sitting in the car, the right side would be the passenger side. If you are standing in front of the car with the hood up, the right side of the car is the driver side. So which side is the right side? A real mechanic would know.

Who's fault was this mistake? If he was a "real" mechanic, he would have known. But it was my responsibility to sell him the right part. To make sure I didn't have a problem like this again, I came up with a question to ask the customer when he or she asked for a part for the right or left side of the car: "Do you mean the passenger or driver side?" The customer would tell me and I never made a mistake or had a problem with this again.

The key to understanding your customer is to ask the right questions. Know what the customer wants. Don't assume anything. Ask questions and have things repeated so you don't make mistakes. The customer expects it done right, the first time and every time.

Here is one more example on a personal level that we can all relate to. I was driving down Olive Street Road in St. Louis, Missouri with my wife and we drove by an ice cream store. She looked over and asked me, "Honey, would you like some ice cream?"

I said, "No" and kept on driving.

Now, most of you realize that she wasn't really asking me if I wanted ice cream. What she meant was that she wanted ice cream. What she was thinking was, "Honey, I want some ice cream, and I don't care if you want some. Just pull over and let me get some ice cream."

How many times do our customers say one thing yet mean another? How may times do we simply misunderstand them? Have we ever transposed numbers in an address? Did the customer want three units or three cases? Are we supposed to ship the package to Springfield, Missouri or Springfield, Illinois?

Our goal should be to get it right the first time every time. And the best way to do this is to completely understand what your customer wants. Ask questions to make sure you do understand.

Think like the buyer, not like the supplier and you will create many MOMENTS OF MAGIC.
top of page


The "Wow!" Factor
You may have recently noticed a number of books and articles about a concept called the "Wow" factor. Many consultants and business experts have been talking about this for years, but it was probably Tom Peters who really brought it to the forefront.

The "Wow!" factor boils down to one thing; exceeding the expectations of the customer. It goes past great customer service. In short, the basic idea is to bring the element of surprise into your business. The concept of Wow! yells out, "Surprise! Aren't you glad you bought from me, decided to do business with our company, etc.!"

There are many ways you and your organization can do it. Here are a few examples to illustrate the Wow! factor.

Last year I bought my wife a new car. Normally the quest for purchasing a new car is not one I look forward to, and this time was no exception. However, to my surprise, the experience was great, and the follow-up even greater. The owner of the dealership knew I was surprising my wife with the car. He called the next day, on a Sunday, to see how she liked the surprise. Wow! A few days later we received a thank you note and a fruit basket. Wow!

Recently my wife and I went out to eat at a nice restaurant. Even though we had ordered a salad and main course, the waiter thought we should have an appetizer. He brought us each a sample of three different appetizers. He said they were so good, that he didn't want us to miss the opportunity to at least try what the chef is really good at doing. Wow! By the way, guess what we will order when we go back to his restaurant? And, guess who got a big tip?

Kellogg Business School professor and marketing guru Dr. Lou Stern talks about his recent purchase of a new car. On his way home he turned on the stereo system. Wow! He couldn't believe how great it sounded. All he wanted was a nice car, good service and a luxuriously smooth ride. He knew the radio/stereo system would be good, but he didn't think it would "blow him away." This was simply a surprise bonus.

Bill Gates, multi-billionaire and chairman of Microsoft, recently wrote a book on the future of technology, The Road Ahead. Surprise! The book included a CD with the entire book and more on it to be popped into your nearest computer. He predicts that books on CD ROM will be the norm in the future. And shouldn't his book "practice what it preaches." If you travel with a laptop computer that has a CD ROM drive you don't have to even take the book with you. Just take the disk and read from the screen. Wow!

Last year I bought a fruit basket for someone from Harry and David. They are a high end catalog retailer that sells food through the mail; fruit baskets, "Pasta of the Month," etc. One day the mail came and I was surprised to find a gift box from Harry and David. I couldn't wait to open it to find out who sent me this delicious box of chocolate truffles. Surprise! It was a gift from Harry and David saying thank you for doing business with them. Wow!

The list of examples can go on and on. The "Wow" comes from, "Surprise! You weren't expecting this, were you?" How can you build this into your product or service? It doesn't always have to be something tangible that might cost a lot of money. It can be a follow up phone call or a simple thank you note. It is meant to make the customer feel good about doing business with you. I remember getting a phone call from a restaurant that some friends and I had been to the night before. I wondered why they would be calling me. Did I leave my credit card there? No, they just wanted to follow up with me to make sure I had a great meal and experience at their restaurant. That's all. Wow!

Putting Wow! into what you do and sell isn't very hard, but it is extremely effective. And I guarantee that for the receiver, it is a MOMENT OF MAGIC!
top of page


Enthusiasm -- It Is Contagious
Who would you rather be with at work? Someone who hates what they are doing, or someone who loves what they are doing?

The answer is obvious. People who love what they do seem to have a charisma or enthusiasm about them. Their attitudes are contagious, and for obvious reasons, they are simply more enjoyable to be around.

Remember different teachers you might have had in high school or college? I remember teachers that lectured -- or should I say read from notes or a manuscript -- to their classes. They never even looked up at their students. I also remember teachers who spoke from their hearts. They encouraged questions and classroom participation. They weren't necessarily funny, but somehow their classes were fun and exciting to be in.

What's the difference between the two? Well, part of the answer is enthusiasm. One teacher is simply doing the job, just going through the motions. The other teacher is immersed in his or her job, involved with the students and creating a learning experience. The first teachers educate the students by lecturing. All information is going one way, from teacher to student. Either the student gets it or doesn't. They try to take notes and listen, with every attempt not to fall asleep. The other teachers are encouraging two way learning. They interact and communicate with students.

Isn't it almost the same in the working environment? Some people just work for their paycheck. Others work for their company and personal fulfillment.

This reminds me of a story that I first heard Zig Ziglar tell at one of his seminars. There were some employees of a major railroad company standing around the tracks. A large limousine pulls up to the workers and out steps a well-dressed man, the president of the railroad company. The president walks up to one of the workers and says, "Hello Bob, how are you?" Bob says, "I'm doing great, Gene. Thanks for asking."

When the president of the company walked away, the workers were impressed with Bob and asked him how he knew the president of the company on a first-name basis. Bob told them that twenty years ago they started working together.

The workers asked Bob, "How come he's president and you still work out here in the yard?"

Bob replied, "Twenty years ago when we started together, I went to work for the paycheck. Gene went to work for the railroad company."

Gene obviously loved what he did and managed to work his way up to becoming president of the company. He didn't get there by not caring or not having a passion for what he did. To get to the top where Gene started took a lot of hard work and enthusiasm in his job and his life.

Enthusiastic people tend to be more successful. And people like to be around enthusiastic people. If you can't get excited about what you do and what you and your company sell, then you won't get anyone around you excited either.

It is also important to understand that enthusiasm doesn't mean you have to be physically excited about what you do. A friend of mine is a speaker. Technically speaking, he is a terrible speaker. He stands behind the lectern and speaks to the audience in a dull and monotone voice. When he starts a program his audience members immediately look at their watches to see when the next break will be.

What makes him different from the teachers we talked about above is that he really does have enthusiasm, he is just not capable of physically showing it. After just a few minutes the audience starts to pick up on it, and within fifteen to twenty minutes they are sitting on the edge of their seats, soaking up his information.

Every once in a while there is a twinkle in his eye. You can tell he loves what he is talking about. He is just not a good speaker. And, that is okay. The audience accepts that, and picks up on his passion for the subject on which he is presenting. While not physically evident, he does have the enthusiasm that it takes to get others excited.

Enthusiasm is contagious. And a fellow professional speaker, Danny Cox, says that if enthusiasm is contagious, and what you have is not enthusiasm, that is also contagious!
top of page


Top Ten Telephone Basics
This article is not just for the front line people who deal directly with customers. All of this information is applicable to everyone, from a receptionist to a warehouse manager to a CEO. Having good telephone skills helps build stronger relationships with everyone! Whether the call is incoming or outbound, the following can be applied to virtually every call.

So, let's get back to basics. Phone skills are an important part of the job. The way you handle your phone is as important as a face-to-face meeting. So take the time to go over some of these basics. Here is my "top ten" phone skills list.

1. Let's start with enthusiasm. Try to convey some type of enthusiasm. From beginning to end, show that you care about the person you are talking to. You don't need to act overly excited about your phone conversation. Just have a positive attitude. It is contagious.

2. Be sure to smile. Even though you are on the phone, the other person can sense a smile from you. Some telephone experts recommend putting a mirror on your desk to remind you when you are not smiling at the customer. For people who are on the phone all day, a mirror may not be a bad idea.

3. How do you sound on the phone? Using the right tone of voice creates atmosphere on the phone. This ties into the first two on this list. Is your enthusiasm coming through? Do you have a positive attitude? Is your phone conversation strictly business? Is it lighter or personal? Your tone and voice inflections will create an impression and help the person on the other end understand what you are telling them.

4. Say "Hello!" (or good morning, good afternoon, etc.) Have a warm greeting or opening. Welcome people into the conversation. Don't make them feel as if they are an interruption. If you are too busy, then let someone else or your voice mail pick up the phone. That is lot better than a greeting that sounds like, "Yah, what do you want!"

5. Say "Goodbye." Have a strong closing. At the minimum, be sure to say goodbye before hanging up the phone. How many times have you expected someone to say goodbye, have a nice day, etc. only to hear a click? Don't do that to your customer!

6. When talking to a customer, avoid company or technical terminology that they may not understand. Everybody has had this happen at one time or another. Someone tries to tell you something and you have absolutely no idea what he is talking about. It sounds like it could be English, and it is. But, you still don't understand it because it is technical jargon. Technical terms or industry buzz-words can put a customer in an uncomfortable position. They might feel dumb because they don't understand you. Or, they may feel frustrated and become impatient.

7. Don't get angry, even if the customer is. It is not always easy to keep calm, especially if the customer is angry about something you have no control over. (Chances are they are mad at something that has already happened.) If a customer is complaining and angry, let them vent. Most likely they aren't mad at you personally. Ask them questions to show that you care. Don't add to their aggravation. You might ask them to repeat the problem just to make sure you understand. Be a good listener.

8. When transferring - ONLY ONCE! If you are transferring to someone else, make sure that person is available. Don't put the customer on the hold, transfer, hold, transfer, hold, transfer, routine. (I hate when that happens!)

9. Control the "hold" button on your phone. A survey in USA Today conducted by Nancy Friedman (a.k.a. The Telephone Doctor) showed that customers hate, more than anything else relating to the phone, to be put on HOLD! The are really only two reasons to put someone on hold: to transfer to someone else or to get information.

10. More on controlling that "hold" button. If you are going to make a customer wait on hold, for any reason, let them know how long they will have to wait. When you say a minute and it really is just a minute, it will probably seem a lot longer to them. So, if you are asking them to hold for an extended period of time, it is probably best to call them back. Promise to call at a specific time. Then, keep your promise!
top of page


Major Expectations
(Quality at every turn, problem solving, accountability & consistency) Customers expect more than ever before. Simply satisfying your customer doesn't cut it these days. You have to go beyond average levels of basic satisfaction. By managing a few of your customers' expectations, you will reap the benefits of a customer who is loyal and truly enjoys doing business with you. We are expected to deliver quality at every turn. We all know it. It is the Q word -- QUALITY! It goes beyond quality service. It is quality in everything you and your organization do. From the excellent service to the outstanding products or services you provide to your customers. It is quality in every area of your business. At the very least, your product or service has to do what it is supposed to do. Go beyond the minimum and produce this at a higher level of quality. Wrap quality service around it and you will exceed the customer's expectations.

We are expected to provide solutions to problems. If we don't, the customer will go somewhere else. There are three types of problems our customers expect us to solve; complaints, needs and non-business problems. Complaints are obvious. A customer calls up with a complaint and expects you to fix whatever their "problem" is. Hopefully, this is not an ongoing occurrence. Second, there is the need type of problem. For example, let's say you are in the hotel business. A traveler needs a place to stay for the night and your hotel is the solution to the traveler's need. You solve their problem by having a nice comfortable room that meets, if not exceeds, their expectations. Third, there is the non-business type of problem. A good example might be that you are working in a retail store and someone comes in asking to use the phone because of a flat tire. You have a choice. You can send them to an outside pay phone or you can call them a tow truck. Do the latter and you have solved a non-business problem and created some good P.R., if not good will.

We are expected to be accountable. What this means is that if a customer comes to you with a problem, complaint, request, etc. , you own it. You don't pass it off to someone else because "it is not your department." But, that doesn't necessarily mean you are the one that takes care of this complaint, or request. As an example, let's say that you are a guest at a hotel. You check into your room and when you get there you find out your nightstand light is burned out. On your way to dinner you tell the front desk manager about the problem. He says he will take care of it. Now, do you really think the front desk manager is going to drop what he is doing and run upstairs to change your burned out light bulb? I don't think so. But what he will hopefully do is call the maintenance department to have the light fixed. That's good, but not good enough. The front desk manager that is truly accountable to the you, the guest, will follow up with maintenance to make sure the light bulb was changed. Even though the front desk manager didn't fix the light, he took ownership of the problem.

Finally, we are expected to be consistent. That means we are good all of the time, not just some of the time. Imagine that it is the first time you have been out to a particular restaurant for dinner, and the food and service was great. You can't wait to go back. Two weeks later you take some friends back to the restaurant only to find that the service is fair and the food just okay. You were so excited from the last time, but this time they let you down. Do you ever go back? With all of the great restaurants to choose from, probably not. You see, you can't be great just some of the time. You have to be great all of the time. Consistency goes back to the first and foremost customer expectation, quality. It is doing it right the first time every time, with the same high level of quality and reliability.

So, there you have four major expectations that you cannot just meet, but you must exceed. Do this and you will find yourself creating many more MOMENTS OF MAGIC.
top of page


Internal Customer Service
It has been my good fortune to have been hired to speak to hundreds of clients with many, many different types of audiences. Most of these clients understand that customer service is not a department you call when you have a complaint. It is a philosophy. Customer service throughout an entire organization is the way of the future.

Still, many people believe that customer service training is only for front line personnel. And these people seem to only want to train the sales people, and of course, that "customer service department."

Service must be a total commitment not just for the front line, but for every employee of any business, from the mail room attendant to the janitor to the president to the CEO. Everyone has a customer. If it is not the outside customer, then it is the internal customer.

So who is an internal customer? A simple definition of an internal customer is anyone within an organization who at any time is dependent on anyone else within the organization.

The internal customer may be a situational customer. This person may not always be the internal customer. They might be depending on someone inside the company at a specific time for a specific reason, maybe once a week or even once a year.

An example of an internal customer may be someone in the payroll department. Let's say this payroll person is dependent on managers from various departments to call in the employee payroll on time. If a manager is late or doesn't report payroll properly, then the payroll person can't do his or her job, which is getting payroll checks out on time. The manager failed his or her internal customer.

This internal customer can be someone you work for as well as someone who works for you. At first you might think that because she works for me that I would always be her internal customer. After all, I'm the boss! WRONG! Of course I am dependent on her to help me with my responsibilities, but she is just as dependent on me to get her the right information and training so that she can do the best job possible. It goes both ways.

The concept is sound and strong. Customer service has to be a total company effort. It just can't be the front line who deals with the outside customers, the ones that buy our products and services. The front line needs the support of everyone within the organization.

The traditional structure of a company has the CEO or President at the top with layers of management underneath, ending with the front line employee who deals directly with the outside customer.

Imagine a triangle or pyramid. The CEO is at the top -- at the point. At the bottom, at the base of the pyramid, are the front line employees. The chain of command flows down. The responsibility to each level of management and every employee flows down. This is very traditional.

In the 1980's along came Jan Carlzon, the former president of Scandinavian Airlines with his best selling business book, Moments of Truth. In his book, he turned the pyramid upside down. He emphasized the importance in dealing with the outside customer. He said that rather than the lower level employees serving the higher levels, it should be at least a two way street, if not opposite. He flip/flopped the pyramid and put the customers at the top and the upper management, including the CEO and president, at the bottom.

This is the root of internal service. It is the understanding that everybody supports everybody else in the organization.

A company who has an excellent service reputation didn't get it without everyone in the company being a part of the service strategy. Someone once said that if you are not working directly with the outside customer, you are probably working with someone who is. Everyone within your organization has an affect on the outside customer.

Starting an internal service program is simple. Virtually every technique you have read or learned about general customer service applies to the internal customer as well. Small changes in basic terminology will need to be made. Companies that practice outstanding customer service find it is easier to attract and keep customers. Companies that practice outstanding internal service find it easier to attract and keep good employees. Employees who practice outstanding internal service find it easier to keep and enhance their careers.

So, take care of your internal customers and create MOMENTS OF MAGIC!
top of page


The Complaining Customer
The complaining customer. We just can't stand them!

Well, most of us can't stand them. The reality is that business organizations should love them. You see, a complaining customer tells you where you can improve. They actually come forward and show us where we make mistakes.

But, most of the time, people hate to hear the complaints. What is worse is that even if we did love to hear the complaints, most of us wouldn't hear them anyway.

First, a few facts you should know about people who complain. Most of the time, when people have a complaint, they complain to everyone else rather than the person or people who caused the complaint. A few years ago there was a study commissioned by the White House Office of Consumer Affairs. The group that performed the study, TARP, the Technical Assistance Research Program, found that in an average business, 96% of people who have a complaint, don't complain -- at least to the people who they do business with. This means that for every 26 complaints that are out there, we are only hearing from one. What do the other 25 do? They complain to their friends, associates and neighbors, and not only do they not come back, but ultimately they lose customers.

Keep in mind that the businesses surveyed were "average" or "typical" front line business. Your business (hopefully) may be far off these numbers and rate much better.

But, there is good news in all of this. If you resolve your customers' complaints, you will keep them most of the time. But first you have to know there is a complaint. So, how can we find those complainers?

Well, most likely customers won't tell us, so, we have to ask them. It is that simple. Call them up or ask them in person. Actively solicit feedback to find out what they are thinking. And when you find a problem or complaint, resolve it on the spot.

I'm reminded of a story that Cavett Robert tells. A little boy walked into an ice cream parlor, sat down at the counter and ordered a chocolate shake. The older gentleman that took the order told the boy it would be just a few minutes. The little boy jumped off his stool and went to a pay phone. He dialed a number and a lady answered the phone.

The boy said, "Hello Mrs. Jones, do you need your lawn cut today?"

"No," said Mrs. Jones.

"Do you already have someone that cuts it for you?" the boy asked.

"Yes I do," she replied.

"Does he do a good job for you?" the boy asked.

"Yes, he does a great job," Mrs. Jones replied.

"Well, thank you for your time," the boy said, and he hung up.

The boy walked back to the counter where the older gentleman was just putting his chocolate shake on the counter.

The man said to the little boy, "Sorry about that."

The boy asked, "Sorry about what?"

"It is obvious," the man said. "You didn't get the job."

The boy looked at him and said, "Oh no mister. I got the job. I've always had the job. I am just making sure I'm doing a good job!"

Don't think that simply fixing the problem guarantees that the customer will come back. If you go to dinner at a restaurant and your meal comes out over-cooked, what usually happens? If you complain, most of the time the waiter will replace the meal. So the problem is fixed. Will that get the guest back to the restaurant? It might, but take it a step further. Maybe the waiter will take that meal off of the bill as a way of apologizing for the inconvenience. Will that get the customer back? Maybe, but take it even a step further. The goal here is not just to fix the problem, but to give the customer a reason to want to come back and give the restaurant another try. The waiter or manager can give the guest a card that gives a free appetizer or dessert the next time the guest dines at the restaurant. That might do the trick. It sometimes takes more than simply fixing a problem to get the customer to come back. Sometimes they have to be given a reason.

First and foremost we need to make sure we are hearing the complaints that our customers have, and the easiest way is to ask. No one is perfect. No company is perfect. So find out what those imperfections might be. Ask the customer, and they will tell you. If you don't ask, you may never know. And, when you hear about a problem, fix it. And make sure you give that customer a reason to come back so you can do it right the next time. Take that moment of misery and turn it into a MOMENT OF MAGIC.
top of page


Building Customer Loyalty
Dr. Ted Levitt, senior professor at Harvard Business School says that the function of every business is to get and keep customers. Consequently, it is also the function of every employee of every business to do the same. Knowing how to keep existing customers happy is key to a company's continued success.

Studies have also proven that it is much more expensive to attract a new customer to a business than to keep an existing one.

So, what can we do to build customer loyalty -- to get that customer to come back again and again? Here are six universal points that will apply to any type of business.

Don't ever forget to say THANKS! It can be face to face, over the phone or via written thank you notes. Customers like to feel appreciated. Recently I bought some clothes from a local retail store. Just a few days later I opened my mail and found a thank you note from my salesman. Was I impressed? You bet. Will I go back? You bet. And, when I do, I will be looking for my salesman.

Find out if you are doing a good job, and if there are problems react quickly. By the way, your customers will not likely tell you if there are problems. Numerous studies have shown that complaining customers don't complain. TARP (Technical Assistance Research Program) was commissioned by the White House Office of Consumer Affairs to survey customer satisfaction. They found that an average business only hears from 4% of unhappy customers. The other 96% don't complain -- at least not to the places they did business. While the study was conducted a number of years ago, current independent studies still show similar findings. Your ultimate goal should be to try and find any problems before the customer complains. The best way is for you to simply ask how you are doing.

Make sure the customer knows they made the right decision to do business with you. Educate and reinforce that they have made a good choice. If you do something different than the competition, make sure the customer knows about it. I remember buying meat from a grocery store. The butcher proudly held up the steak he was selling me and said, "Look at that! Is that a beautiful piece of meat or what? Did you know that we trim the fat around the steak to just 1/8 of an inch. You won't find that at the competition! Thanks for shopping with us." These competitive differences need to be emphasized. It is your opportunity to stand out.

Guarantee your products and/or services. Personally, stand behind everything you do. A customer doesn't do business with a company. They do business with the people who represent the company. And, make sure the customer knows you mean it. If there is a problem, don't just push it off to someone else, better referred to as the It's Not My Department reaction. If a customer has a problem, and you are the person that received it, it is your responsibility to see it through. You may not make the final decision, but you are there at the end when it is made.

Recognize that there may be others in the "buying process" that should be made to feel appreciated. These people might also be involved in the buying process, such as an assistant, a secretary or even a committee, but may not be the person or people you are dealing with day to day. Even if the assistant or secretary is not involved in the buying decision, they are still part of the team. Don't forget to show appreciation for these people as well.

Create a demanding customer. Now, here is an interesting concept! Creating a demanding customer means that if your customer were to go to your competition, they would not just expect, but demand, the same level of service that they get from you. Anything less from the competition reinforces that the customer made the right choice to do business with you. In other words, you have spoiled your customer. What may be standard for you, is better than the competition. The competition will find your customer to be not just demanding, but perhaps a bit unreasonable.

So there you have it. Six ways for building customer loyalty. Work toward implementing these and you will find a higher success rate in keeping your existing customers and creating MOMENTS OF MAGIC.
top of page


What to Do When You Can't Say Yes
One of the most negative situations one can create with a customer is to say "no." In general, people hate to be told "no." It starts when we are little kids and our parents constantly scream "NO!" at us. But sometimes saying "no" is unavoidable. In Karen Leland & Keith Bailey's excellent book, Customer Service for Dummies, they cover a number of reasons you would have to say "no." Let's cover some major reasons why we would have to say "no," and what we can or cannot do about them.

It is the law - Sometimes you are asked to do something and agreeing to do it would break a law. This one is simple. Most customers should be comfortable with the reason.

It is company policy - I hate being told someone can't do something because of "company policy." One Saturday evening my wife and I ventured to a restaurant known for great food at reasonable prices. I decided to try the pork special, which included potatoes and vegetables. I asked what the vegetables were. The waitress told me string beans and corn. Well, I love corn, but hate string beans, and I asked if I could have extra corn instead of the string beans. The waitress said they do not substitute. So, I asked her just to leave the string beans off. She told me she couldn't do that either. I asked why. She said it was their policy. I told her that at McDonalds if I don't want a pickle, they leave off the pickle. She looked at me like I was nuts! The dinner came with the string beans and we never went back.

We are out of it - A company can be out of a part. The book store can be out of a best selling book. A movie theater can be sold out of seats. It is all the same. You have to tell the customer you don't have any more. So, what do we do? Let's take a lesson from Nordstrom's. Legend has it that a customer wanted something that Nordstrom's was out of. The employee asked the customer to come back in fifteen minutes. Meanwhile the employee ran to another store in the mall, paid retail for the item and brought it back to Nordstrom's where it was sold to the customer as if Nordstrom's had the item all along. Great solution when you can do it, but sometimes it is not that easy. One of my retail clients will actually send the customer to the competition, but not before they call the store and have it held in their customers name. Most of the time the customers are appreciative, seeing that the store is more interested in taking care of the customer than making sale. In the long term, the store gains the customer's loyalty and trust. Sometimes you just have to resort to telling the customer when the item will be back in stock. Just make sure you honor your promise. If you say it will be in next Tuesday, it had better be in.

It just can't be done - Sometimes a customer wants something that just can't be done or is impossible to get. It is that simple. Your goal should be to educate the customer why you can't get them what they want. However, if you are really good, you could try to help find it somewhere else, or maybe find a replacement.

Yes isn't good enough - Sometimes giving the customer what he/she wants doesn't ensure the customer will be happy with you. I remember pulling into a parking lot which had some open spaces I could see from the street only to be told they were full. I argued that I saw open spots. The attendant argued that there weren't any. He refused to look, even though I told them exactly where they were. After five minutes of arguing, he finally agreed to look. Sure enough he saw the spaces I had seen from the street. He angrily waved me in. Even though I got my parking space, I was mad. He "gave in," but he did it too late.

Saying "no" isn't so bad - No, might not be so bad. One day I went into one of my favorite places, Baskin Robbins, the well known ice cream parlor. I was excited to order my favorite flavor, Quarterback Crunch. To my disappointment, they were out of that flavor. The girl dishing out the ice cream told me what her favorite flavor was and asked if I wanted to try it. I did and guess what? I now have a new favorite flavor! Substitution is a viable alternative to many situations. Sometimes it may be obvious, while other times you may have to take a creative approach. With the right attitude, you may find that saying "no" is an opportunity to show how good you are.

So the next time you are forced to say "no" to a customer or client, think of the above. Delivering great
service and creating Moments of Magic have always included common sense thinking and flexibility. ,
top of pag

Buy Karen Leland and Keith Bailey's Customer Service for Dummies

Internal Service: What We Think They Want May Not Be What They Really Want
You can't have great customer service without great internal service. As a reminder, the internal customer is anyone within our own organization who is dependent on us for anything. Taking care of this internal customer allows them to do their job, take care of another internal customer or take care of the outside customer.

Much of what is written and taught about regular outside customer service works for internal service as well. One of my favorite areas on which to lecture is on understanding the customer. While I have written about this in an earlier article, it bears repeating. It is really a simple concept. Sometimes we think we know what our customers want, but they really want something else.

In other words, we make assumptions. In order not to make mistakes, we need to get inside our customers heads and give them what they want versus what we think they want. The easiest way to do this is to ask questions.

Okay, enough review. How does this apply to the internal customer? When was the last time you asked your employees if they were happy with you? Or, when was the last time you showed your employees sincere appreciation?

What is all of this leading to? Some very important information. Apparently, some surveys are proving that managers and supervisors are not in sync with what their employees want.

Robert Half International conducted a survey and found out the top reasons employees leave to go work somewhere else. When executives, managers and supervisors were asked what they thought, their number one answer was money. They thought money was the motivator to cause someone to "jump ship." When the employees who had left were surveyed, the number one reason they left to work somewhere else was lack of recognition and appreciation.

Another survey conducted by Challenger Outplacement Council, written up in Human Resource Update, found that the most important employee motivators are:

1. Recognition/appreciation
2. Independence
3. Contribution to the company
4. Salary

Another survey put together by Glenn Tobe & Associates asked employees and their supervisors what were their top motivators. The employees responses were a bit different than the supervisors. Notice what employees thought was most important versus what supervisors thought was least important.

Employees wanted:

1. Appreciation Feeling "in" on things
2. Understanding attitude
3. Job security
4. Good wages
5. Interesting work
6. Promotion opportunities
7. Loyalty from management

Supervisors thought they wanted:

1. Good wages
2. Job security
3. Promotion opportunities
4. Good working conditions
5. Interesting work
6. Loyalty from management
7. Tactful discipline
8. Appreciation

Let's look at other areas, such as employee perks. One of my clients took an area of his building and created a workout center for employees. He spent a large amount of money to put together a facility that was the best for the money based on the space that he had. He thought employees would go crazy over it. He was dead wrong! Yes, a few employees took advantage of it, but the facility was seldom used. All he had to do was ask the employees if they would use it. He eventually found out.

Consider holding a focus group, not for customers, but for employees. Make it easy for your employees to give you feedback on what their likes and dislikes are. A survey could be put together to help better understand their feelings. Occasionally take an employee to lunch to see what is on his or her mind. You may also learn about the feelings of other employees. Anheuser-Busch has executives ride with the beer delivery trucks, not just to see the customer, but to get feedback from the "front liners" of their business. Many companies have similar types of programs that let their executives get a pulse on their customers in the "real world."

Realize that this is not a one time thing. Finding out what your employees think should be ongoing, just as it is for the outside customer. Determine which of these, or other methods of employee feedback, work best and consider doing it at least once every six months, if not more often.

Go back one more time to the Glenn Tobe & Associates survey and look at the difference between what the employee wants versus what the managers and supervisors think the employee wants! Creating MOMENTS OF MAGIC are not just for the outside customer!
top of page


Striving toward Greatness
As we strive toward greatness in the area of customer service and relations, here are a few more simple strategies to deliver an even higher level of service. It all goes back to managing your Moments of Truth -- each and every contact you have with a customer -- and creating Moments of Magic.

Benchmark with the competition. You must know how you stack up against your competition. Find out what the competition does well, even better than you. Then use this as the minimum standard. Do not copy! Simply use this as a starting point. If the competition is doing something you are not already doing, then figure out how to do it even better. The benchmark is not to set a standard or a goal. It is to become the eventual starting point on which to build. Your goal is to differentiate yourself from the competition, to be better than, not the same or as good as them. You don't want to be another choice, but the only choice.

Benchmark outside of your industry. At a recent seminar I had eight groups share the best and worst customer service experiences they ever had (outside of their own industry). They came up with some great stories about the good and the bad. What amazed me was that the majority of them had to do with going to a restaurant. Then it hit me. If we think back to the best service we ever had, and it takes us to a restaurant, then why not try and emulate what this outstanding restaurant does for it's customers? Think about the waiter that seemed to always be there when you needed him. Or, the food that seemed to arrive in a timely fashion, cooked to perfection. Draw parallels between your business and others outside of your industry. Look at what other companies do to create legendary service and simply bring their ideas to your own company.

Discover what you do best and exploit it. In the process of benchmarking with the competition, you may, if you don't already know it, find out you do something different or better than they do. Make sure your customers know this. This could be one of your differentiation factors. It may be one of the reasons to do business with you. Just make sure what you do better matters to your customer.

Know your customers. This sounds so simple, but so many companies miss the mark. We have an exercise we do at some of my seminars. We ask the audience to list what they think the top five customer expectations are. Most of the time they break into small groups to do this. Once the answers are shared, they get a reality check. We get data through customer surveys and focus groups. Guess what? Almost every time what the employees think the customer expects is not actually what the customer really expects. Getting to know your customers is not that difficult. You can hold focus groups, informal surveys (low response for mail, higher for phone), solicit comments and feedback at the same time you are doing business, etc.

Know the value of your customer, specifically the dollar value. It may put a lot in perspective for you. Knowing the dollar value of a customer will help you make decisions about how you handle complaints, problems, special requests, etc. In this cutting edge world we live in, we must stay up with technology. We can't be left in the dust! Be on the cutting edge, which means taking advantage of new software, more powerful computers and even the internet. Many of my clients have fought being a part of the internet. Faxing used to be the rage. Now, it is e-mail. E-mail is the easiest way of quick, non-personal contact communication. The ability to get a message, a letter, computer file, etc, not just to another person, but groups of people, has never been easier. And, if you sell any type of product or service (and I know you do) and are not yet using the internet to exploit it, you are missing a great opportunity for exposure. You can also use an internet site as a way to help promote your image. We have one client who uses their site not to sell, but to help people decide if they want to work for their company. They even have employment applications that can be filled out and sent to the company via e-mail.

So there you have six simple things to help you create a successful service strategy. While these six things focus on what you and your company should do, please don't lose sight that it is all in the best interest of the customer.

After all, the customer is the reason we are in business. Your company can't possibly be successful if no one is buying what you are selling, and you aren't creating MOMENTS OF MAGIC.
top of page


Operations-Driven Versus Customer-Driven
Is your business operations-driven or customer-driven?

One day a woman went grocery shopping. She and her husband, a doctor, had just moved into town. One of the first things she did was go to the bank to open a checking account. Armed with temporary checks, she went to the store to buy a few of the basic necessities they would need for their new home.

At the check out line, the checker refused to accept her check because the woman had an out-of-state drivers license. The woman asked the checker to get the manager. The manager said it was store policy not to accept checks from people with out-of-state.

The woman tried to explain that she and her husband had just moved into the area, that she had just opened up the account at the local bank and had not yet had a chance to get a new drivers license. The manager simply told her that until she had a local I.D., he would not accept her checks. She walked away vowing to never come back.

It was only a matter of days before the corporate offices of this grocery store chain found out about the problem and went to work to try and salvage the situation.

Letters and phone calls of apology were issued. Did it work? Yes, but this problem shouldn't have happened in the first place.

The manager was too focused on the operational aspect of the business, and not the customer's needs. This is a classic example of how company policy and inflexible attitudes of employees cause lost customers. It has been the goal of this company to create a set of guidelines for their managers and employees to follow. But, they are still referred to as policies. They might as well be called rules.

In a customer driven or focused environment this would not have happened. But, until employees recognize that they have the ability to make decisions based on the circumstance, they will always follow the "rules."

One word that is often used (even overused) is empowerment. Employees need to know they are empowered to make good decisions to help create great customer relations. And, it is important that there is a consistent effort to foster the empowerment culture, and that every employee, from top executives to virtually every area of a business know, understand and participate the culture.

Recently I witnessed a salesperson trying to issue a credit to a customer that had been mishandled. However when he went to get his manager's approval, he was told he couldn't issue the credit.

The company claimed to be creating the empowerment culture, but it was obvious that while one employee believed it, his manager did not.

First, the employee should not have had to go to his manager for approval. Second, even if the salesperson did have to call, the manager should have backed his employee's decision. If there was a problem, the manager could have discussed it with him at a later, more appropriate time.

Here are a few quick thoughts and ideas to become a customer driven organization.

Hire right -- The attitude is more important than the skill. You can train the skill. This is what companies like the Ritz Carlton and Nordstrom's are so famous for.

Constantly train -- Even if you spend five minutes every few days on something new, it is constant training and reinforcement of your business and customer philosophies.

Continually praise good behavior -- You have to actually talk to your employees. Let them know how well they are doing. Show appreciation for doing the right thing.

Public recognition -- Let other employees and customers know about the outstanding service your employees are creating. Build an environment that fosters this positive behavior.

Treat your employees the way you want them to treat your customers -- This is sort of an offshoot of the "Golden Rule" If you are constantly yelling at an employee, how can you expect him/her to turn around and be nice to a customer. You need to set an example.

Creating a truly customer focused and driven environment is not easy. It takes time and training. Employees need to trust that management will stand behind them and not fault them for making a wrong decision.

To truly create an empowering customer driven culture, employees should not be cited for making the wrong decisions. Incidents must be used as positive teaching examples to help all employees learn how to make the best decisions to create MOMENTS OF MAGIC for their customers.
top of page


The Value of the Customer
Some people feel that customers are the lifeblood of our businesses. They even say that the customer may be the most important part of a business. There are some of us that would argue that their employees are the lifeblood of their business. For the record, I could argue for both sides. After all, you need employees of a company to make or do the "stuff" that customers buy. Without customers, you have no one to sell to. Without customers you don't make money, you can't keep people employed, and ultimately don't have a company. Yes, customers are very valuable. But, let's take this a step further.

Have you ever thought about the financial value of your customer? Let me give you an example. Let's say you own a grocery store. The average customer buys $50.00 of groceries each visit, and they visit the store twice a week for 50 weeks each year. In a year, the customer is worth $5,000.00. Let's say the average customer moves every seven years, so over a period of seven years, the customer is worth $35,000.00. Wow!

But there is more. You have to believe that if you do a good job, your happy customers are going to refer others to you, such as a new neighbor who just moved into the area. Conservatively, let's say the average customer refers at least two new customers to you.

These referrals don't make the existing customer spend more, but they are worth at least $70,000.00 of new business. So, losing one customer can you over $100,000.00! ($35,000.00 plus $70,000.00 worth of referrals).

This type of reasoning applies to virtually any type of business. The important point here is to be able to see the big picture.

If you are the grocery store owner and a customer complains about the steak they bought last week, give them their money back. And, don't stop there. Give them some "free" steak for their next meal. It may cost you $10.00, but that is less than 1/100 of one percent of what the customer is ultimately worth.

Every business has different numbers, but the principle still holds true. There will always be returns, refunds, complaints, etc., and by cheerfully taking care of them you build trust and customer retention. Even the people/customers whose problems you take care of, yet never do business with again, can be valuable.

A few years ago I conducted public seminars. This seminar was very successful and problems were virtually nonexistent. However, at one seminar, halfway through the first day, a gentleman came up to me and said he didn't want to attend the rest of the seminar. The program was not what he had thought it would be.

He had spent a lot of money to attend the seminar, and was prepared to fight for his money back. I asked him if we could talk about this during our lunch break and he agreed.

When we met, he gave me his reasons. Whether I agreed with him or not didn't matter. I immediately offered to give him his money back. He was shocked. He didn't think it would be so easy. He used words like honest and ethical to describe our company.

A few weeks later we received a call from a potential customer. He was referred to us by the man who was unhappy with the seminar! And a few weeks after that he referred another customer. Our unhappy seminar attendee was sending us business!

Finding the value of a customer is easy. What is the average sale per customer? How often does he/she buy? How long will a customer buy? Multiply those three together and you have the value of the customer.

But, don't forget the referral factor. Will the happy customer refer two, three, four or more customers to you? Multiply the value of your customer times the number of referrals. Now you will have a better understanding of the value of your customer.

Taking care of customer problems doesn't always mean giving money back. Sometimes problem solving needs creativity or just simple common sense.

For example, my car had a problem and the warranty had just expired. I talked to the dealer and he fixed it without charging me -- even though it was outside of the warranty period. Why? Because he knew the lifetime value of his customer far exceeded the very small cost of keeping me happy.

Everyone in the organization should know the value of a customer. It will validate the importance of the employee and the decisions they make.
top of page


The Basics of Customer Service
Great customer service isn't rocket science. Customer service isn't a department. It is a simple philosophy that should be practiced by everyone in an organization, regardless of their position and/or title, and it can be broken down into four basic parts. While volumes of books have been written about great service, these four points could be considered the starting point -- the basics. By understanding these very simple concepts, you will be well on your way to creating more moments of magic for your customers.

Common sense -- This means doing the obvious. It is a little more than treating your customers like you would want to be treated. But, it is not much more. It is simply treating your customers the way they want to be treated. Understand that what you would expect might be different than what your customer might expect. For example, a bellman may work at a very expensive hotel. He will probably never stay at a hotel like the one in which he works. He would never demand the same level of service and attention that the hotel's guests demand, but he still understands what they want and desire, and he delivers it to them.

Flexibility -- Rules and policies are nothing more than guidelines. Don't let "company policy" stand in the way of making a customer happy. However there is eventually a point where you have to take a stand. In spite of what you may have heard, the customer is not always right. But, they are always the customer. So, if they are wrong, let them be wrong with dignity. Do what you can, within reason, to see that your customer is always happy. I am reminded of the CEO of a major company that called all of his people together and told them, "Do whatever it takes to make the customer happy." Well, they did, and almost put the company into bankruptcy. Along with empowering people to be flexible goes training. If properly trained, the employee can deliver what the customer perceives as a "whatever-it-takes" attitude, and the employees won't put the company out of business.

Solving Problems -- There are two types of problems to solve -- business and non-business. Business problems include taking care of complaints and meeting a customer's needs. These customers are coming to you to either satisfy a complaint or have you help them with a problem, and you need to be there to help them. Then there are non-business problems that have nothing to do with what you and your company do on a day-to-day basis. An example of a non-business problem might be a person who's car has a flat tire across the street from our place of business. They come to us for help. How do we react? Do we tell them there is a pay phone down the street, or do we help them by picking up the phone and calling for a tow truck? Solving non-business problems are a potential way of generating good public relations. And, you never know, but this person could turn out to be your next customer.

Recovery -- This is probably one of the most important points. I don't care how good you are. You can have a long-term satisfied customer for years. As soon as something bad happens, you have to recover. It is that recovery that will be that customer's final judgment on just how good you really are. Remember, studies have proven it is much less expensive to keep an existing a customer than to get a new one. Do what you can not just to recover from a problem, but to give the customer a renewed confidence to continue to do business with you again. Sometimes this means going beyond just fixing a problem. Sometimes you have to get the customer back in the door. For example, a restaurant that had a problem with a guest's meal might not just remake the dinner, but also give a complimentary appetizer the next time the guest comes back. Not only did the restaurant resolve the complaint, but also gave an incentive for the guest to come back.

So there you have four basic components of a good customer service strategy. These simple yet powerful tools are the key to success in customer service and will create many MOMENTS OF MAGIC!
top of page