With failing Western economies and increasing levels of competition, it seems like a pretty bad time for businesses at the moment. However, all is not lost. Far from it. I think it was Tony Robbins who said “Recessions restore resourcefulness”. (Lol, first post on my new ‘business’ blog and I’m talking about Tony Robbins!). Companies don’t have to spend heaps of money to give themselves a competitive advantage in a market.
“A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.” (http://tutor2u.net/business/strategy/competitive_advantage.htm)
So how can you offer consumers greater value without lowering your prices?
Provide a greater level of service, namely customer service. I’m so surprised that improvements to customer service were not the first changes that companies made as the recession kicked in.
Why gain a competitive advantage using customer service?
It is one of the easiest and cheapest ways to give your business a competitive advantage in this difficult market. Most businesses still aren’t doing it today.
A prime example of a company that provides good customer service is Waitrose. Their staff are known as “partners”, and receive a small share of the yearly profits. This gives the staff an incentive to perform their roles to the best of their ability. An example of Waitrose’s commitment to customer service – My Aunty’s shopping was delivered late so Waitrose gave her a free bouquet of £20 flowers.
A prime example of a company that provides horrendous customer service – A family friend recently purchased a Mitsubishi L200 Warrior which cost £25,000 ($40,000). He ordered a roof rack from them when he bought his car…THEY MADE HIM FIT IT HIMSELF!
It’s the little things that count. If you have a restaurant and a regular customer is not happy with the food, why not give them deserts and drinks free!? It may cost you $50, but you will recover this dozens of times over if they become customers for life and sing praises about your restaurant.
Many businesses are always trying to chase new customers. Research has shown that it is seven times more expensive to acquire new customers than to get a repeat purchase from an existing customer. Concentrate on what you’ve got and look after your customers.
The benefits of providing excellent customer service will far outweigh the costs of training or providing a bonus scheme to your employees.
Your turn: How often do you witness bad customer service? Do you think that it’s the best way for a business to gain a competitive advantage? Whether you agree or not, I’d love to hear your thoughts.
16 comments
Jk Allen
September 6, 2011 at 5:34 pm (UTC 0)
Hey Robert,
Great article. This is one that’s always timely…customer service always separates everyone else from the best.
I experience bad customer service all the time. Still, I don’t expect to receive bad customer service. With so many options and businesses to chose from, I feel like my business should be respected because I could have went elsewhere.
When I’m affected by a bad customer service situation I’m the kind of person who writes letters sharing my disgust. But I’m also the kind of guy who writes letters of appreciation sharing my great experiences (which are more rare).
I had something on my mind the entire time I read this post that I was going to leave in the comments here…but you covered it: the fact that it’s more important to acquire new business than repeat business. In my opinion this statistic alone makes customer services a very important way to separate one business from the next.
Great stuff Rob. I appreciate you putting this together and I love the new site!
PEACE
Jk Allen recently posted..Conversations with Rob: Learning from a Multi-Millionaire (Part 2)
Robert
September 6, 2011 at 8:23 pm (UTC 0)
Hey Jk!
Thanks for stopping by man, you have the honour of leaving the first comment! Lol just kidding the honour is all mine.
You’re right, it is always a timely topic. That’s just it, when we have alternatives, businesses should be going out of their way to make sure that the customer sticks with them; but most just don’t seem to care.
Yeah, I think that it’s important to let them know when they’ve done something right AND when they’ve done something wrong.
Businesses need to start concentrating on their current customers instead of chasing new ones, and then ditching them as soon as they buy something! It just doesn’t make sense!
Anyway, thanks very much for stopping by man.
Sure we’ll talk soon!
Robert recently posted..The easiest and cheapest way to differentiate yourself in a saturated market
Stephen Guise @ Deep Thinking
September 8, 2011 at 6:49 pm (UTC 0)
As a customer of many businesses, I’ve realized that the extremes are the ones that count the most. If I receive average and even below average customer service, there is a good chance I’ll return if I like the product (Wal-mart). If the customer service is offensive or appalling, I will not be coming back AND I’ll tell others not to trust your business (Precision Tune Auto Care tried to rip me off, so I cancelled all of the repair work and will never go there again).
On the flip side, good to great customer service will warrant repeat business, but only the exceptional, uncanny customer service will be memorable and worth talking about with others. Amazon.com has been incredible so far. They were available at 1 AM when I wanted to change my order and they were fair and understanding as always. THAT is the rare level of customer service that makes me tell people how much I love Amazon. Judging by their success, it seems to be paying off for them.
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Robert
September 9, 2011 at 12:25 am (UTC 0)
That’s very true. Mediocre customer service at a place that provides good, cheap products seems to be allowable. I think that most people agree that the cheaper places are sometimes allowed to have poor customer service, as long as it isn’t downright horrendous.
Social Media has given everyone the power to do their part in making and breaking
brands – so businesses these days really have to be accountable and deliver a good service.
Re: Your Amazon experience. Yes I think it’s fair to say that excellent customer service has been instrumental in their success. I love Amazon as well. I think that it’s important for everyone to talk about both good and bad experiences they have had with businesses, especially, as you said, if they are at the “extremes”.
Thanks for your comment bro. Sure we’ll be in contact soon.
Robert recently posted..The easiest and cheapest way to differentiate yourself in a saturated market
Hector Avellaneda
September 10, 2011 at 9:38 pm (UTC 0)
I think you have a good point here Rob. It’s definitely more expensive to obtain new customers than it is to retain the ones you already have.
Recently, I went to one of my favorite restaurants here in Houston TX (USA) called Johnny Carinos – an Italian place.
I was so hungry and so excited by how good the food looked that I started easting as soon as I received my plate. When I was about halfway done, I noticed something odd in the plate – it turned out to be a pretty long hair!
I don’t know how you feel about hair in your food (some people would simply be able to take it out and continue eating) but I was disgusted and I immediately lost my appetite.
I made my waitress aware of what I had found in my plate and her manager came out, personally apologized offered me a free dessert and a free meal for next time I went back.
I thought this was exceptionally valuable and here’s why.
I received a free dessert and was not charged for my drink BUT because I had a free meal, I went back to eat at Carino’s the very next week!
From their perspective, this insured that not only did I leave happy from the restaurant even though I had bad experience but that I made sure I went back SOON!
Who knows how long it would have been before I went back had they not taken such an interest in making the whole situation right again!
Robert
September 11, 2011 at 9:26 pm (UTC 0)
Wow, that is a prime real-life example of how I believe a restaurant should look after their customers.
Yeah, hair in food is DISGUSTING! Especially when the hair is long! Ewwwwwww! lol
Yeah man, if they hadn’t looked after you, I doubt you would have gone back at all! (and I wouldn’t have blamed you!) That was a smart idea to give you a free meal for next time – very smart!
Yeah all you smart guys commenting are aware that it’s much cheaper to keep existing customers than constantly chase new ones – HUGE point!
Thanks for coming by and commenting, glad I’ve got your support bro! Yeah Ryan and I talk alot, I’m aware of his new blog, and can’t wait to see it!
Always great to see you on here bro. Speak soon.
Robert
Robert recently posted..The easiest and cheapest way to differentiate yourself in a saturated market
Hector Avellaneda
September 10, 2011 at 9:38 pm (UTC 0)
PS: Congrats on the new BLOG!!!
Ryan Critchett@Computer Repair Phillipsburg
September 11, 2011 at 8:28 pm (UTC 0)
That waitrose thing is pretty cool man. I like that a lot. You know me man, I’m exactly for what you’re saying. It seems that like you said, the recession has created a need for better skills for retention. And customer service seems like the most powerful contender to facilitate hanging on to peeps! Awesome that the new blog has launched man. Looking forward to its evolution Robert!
Robert
September 11, 2011 at 9:29 pm (UTC 0)
Ryan! Welcome! lol
Yeah I like what Waitrose did. They’re a pretty big company as well. I love that – “the recession has created a greater need for skills retention”. Very true. Just a shame more darn companies don’t do it!
Thanks for your support as usual bro, can’t wait to see your new blog, but hope you’re making the most of a couple weeks off!
Speak soon
Robert recently posted..The easiest and cheapest way to differentiate yourself in a saturated market
Ryan Critchett@Computer Repair Bethlehem
September 13, 2011 at 7:46 pm (UTC 0)
Agreed on all counts. My pleasure on the support, the new blog is going to seriously rock! Brainstorming it all up now. Chat maybe a weeknight later this week? If not, weekend for sure man.
Stuart
September 13, 2011 at 10:05 am (UTC 0)
Robert, amigo, it’s great to see the new home up and running! I know you’ve been wanting to get this out there for a long time, and good things come to those who wait
Regards to the post, I’m a sucker for good customer service. It can really brighten my day if someone takes the time to not just ask me how I am, but also take an interest in what I’m saying. To have a conversation that’s outside of the nature of the call. To spend time with me when they don’t have to. That’s the kind of stuff I like!
Thanks for the request on Facebook too, I’m loving the profile picture! You’ve got some style going on
Take care, all the best
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Robert
September 20, 2011 at 12:20 pm (UTC 0)
Thanks Stu! Sorry for the late reply, I’ve been away…again! lol
I love what you’re saying Stu, and that’s a great point – speaking about things that are outside of the immediate business and taking a genuine interest in what the “customer” has to say.
Haha thanks man was from a “photo shoot” a couple years back!
Great to see you on here. Speak soon amigo!
Robert recently posted..The easiest and cheapest way to differentiate yourself in a saturated market
Bryan Thompson
September 17, 2011 at 1:19 pm (UTC 0)
Robert, sadly, it’s not just mass-produced business that’s hollowed up its customer service, but the small shops as well. Case and point: a local salad restaurant picked up a slight vibe in my area and my wife and I decided to give it a try. We stood in line (AT A SALAD SHOP) for more than 15 minutes while the line didn’t budge. There were 3 people in front of us, and it was a small shop. The people tossing the salad on the other side of the counter never acknowledged any of us. We moved our business to Quizno’s. I imagine the other guys did the same. I told the person who recommended the shop about it and she said, “Oh, yeah, the service is terrible. We just order takeout.” I don’t give the company long. Great lesson in customer service.
Bryan Thompson recently posted..How do you Pick Yourself Up When You’ve just Struck Out?
Robert
September 20, 2011 at 12:24 pm (UTC 0)
Hey Bryan, sorry for the late reply…I was away. Massive thanks for stopping by here!
Oh man that is disgusting. Especially in a small shop. I thought that they were the guys that needed business the most in these tough economic times! Not one member of staff even acknowledged you. Wow. That’s real bad. The worst thing is…how hard is it to say “We’re so sorry about the wait” and be friendly to you because you were good enough to wait? It’s not hard at all. It’s free and it takes a matter of seconds – thanks for that great example of how fragile customer relationships are…and how some businesses completely take them for granted!
Hope to see you on here again soon.
Robert
Robert recently posted..The easiest and cheapest way to differentiate yourself in a saturated market
Brian Kinkade@Denver MLS
October 12, 2011 at 4:25 pm (UTC 0)
A $20 bouquet of flower for late delivery is really a good idea to make the customer smile but sometimes orders may be urgent and customers may not be too happy if the service is poor. Customer service is very important, a business has to make the customers the first priority in order to promote the business.
Robert
October 12, 2011 at 6:58 pm (UTC 0)
Hey Brian.
Yeah. I don’t think anyone expects a business to be perfect or flawless in any way, but good customer service can make up for any errors. It’s all about customer lifetime value.
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