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When the Going Gets Tough, Focus on Customer Service
By Michael J. McDermott

In a difficult economy, it’s natural for small business owners to take a hard look at ways they can save money. That’s exactly what they should do. But in deciding which areas of your business can sustain cuts, be careful not to pull back too far in those areas that are critical to both your long- and short-term success.

Customer service is one of those areas. Providing your customers or clients with good service is important in all business environments, but in the bare-knuckles competition of a recessionary period, it’s an absolute must. One mistake many small business owners make is assuming their employees - and in some cases themselves - automatically know what comprises good customer service and how best to provide it. That’s not always the case; in fact, it’s rarely so.

Good customer service requires effective training, something successful companies are well aware of. Businesses large and small shell out a huge amount of money for training every year, more than $58 billion and an average of $1,202 per employee in 2007, according to Bersin & Associates’ 2008 Corporate Learning Factbook. In some industries, almost a quarter of those expenditures are earmarked for customer service training.

Why are companies willing to spend so much in this area? Because they believe it’s worth it. Improving customer service can boost customer loyalty and retention; make significant contributions to growth; reduce employee stress and turnover; improve the workplace environment; and increase worker productivity by reducing time spent dealing with unhappy customers.

Businesses increasingly see customer service training as critical to the success of both individual employees and the overall organization. There is no limitation on the need for customer service training; it’s as important to a small business with 10 employees as to a multinational corporation with 10,000.

Be careful not to pull back too far in those areas that are critical to your success.

Arguably, it’s more important to the smaller organization than to the larger one. In a very large company, a single untrained or improperly trained employee might have a negligible effect on overall business performance. But in a small company employing, say, four people, that poorly trained employee represents 25 percent of the workforce - with the potential to have quite a significant negative impact on the business. Frontline employees represent the face of your business to your customers. You present a positive face when you present well-trained employees who take personal responsibility to do a good job. Customers talk. They are a source of free advertising. Make sure what they are saying about you is good advertising.

Small businesses may not have the extent of resources available to them that large companies do, but that should not get in the way of providing effective customer service training. Small business owners have a well-deserved reputation of doing more with less and making the most of the resources they do have available. Customer service training is the perfect venue in which to apply that expertise.

AIM CAREFULLY

While most businesses can benefit from customer service training, the process in not an end unto itself. It needs to be purpose-driven. A business needs to decide what is important to it, what its values are, and what outcomes it seeks. Is your philosophy that the customer is always right? If so, that requires a specific type of customer service training. But if there are other values or outcomes that are more important, a different approach is required.

In the case of an airline, for example, keeping customers happy is important, but keeping them safe is more so. Customers like to get up and walk around the cabin. That makes them happy. But doing that when the plane is taking off, landing, or flying through turbulence could jeopardize their safety. Obviously, safety trumps customer happiness in that situation.

Business owners should take an organized approach to identifying their customer service training needs. Start by distinguishing between organizational and employee training needs. What is the problem that needs to be addressed or the goal you want to achieve? Can that best be done through customer service training, or are there issues elsewhere in the company - such as your marketing plan or execution strategy - that hold more promise to achieve the desired outcome?

If customer service is the answer, it must be targeted in order for it to be effective. Targeting your training means first analyzing your needs, including who needs the training, what needs to be trained, where the training should occur, and when it should be completed.

Arguably, customer service is more important to a small business than to a large one..

Different people learn best in different ways. In order to be effective, customer service training must be presented in ways that match the learning styles of those receiving the training. There are three basic types of learning styles:

  • Visual learners, who learn best through seeing. They need to see the instructor’s body language and facial expressions to get the most from training. Visual learners tend to think in images and learn best from visual displays such as diagrams, illustrated material, videos, etc.

  • Auditory learners, who learn best through verbal communication. Lectures and discussions are effective training methods for these workers, who like to talk things through and listen to what others have to say. Auditory learners rely on tone of voice, pitch, speed, and other auditory cues to ferret out the underlying meaning of the words being spoken.

  • Kinesthetic/tactile learners, who learn best through physical interaction such as touching, moving, and doing. A hands-on approach that gives them the opportunity to actively explore the physical world around them works best in training these workers, who may find it difficult to sit still for long periods and may become distracted by their need for physical interaction.

    • DIVERSE METHODS

    Using diverse delivery methods is particularly important when training adults. You have to give information in as many ways as possible to help those being trained own it. Ownership is critical, and it only happens if you get people involved in their learning. Fortunately, technology offers an almost limitless number of ways to do this.

    Multiple learning channels in training programs are important, even if your workforce is relatively homogeneous in terms of age. More important, though, is making sure the customer service training modalities you implement represent the best match for your unique situation.

    No matter how small your business or how tight your budget, it’s possible to find a customer service training solution that meets your needs at an affordable price. If you’re really on a tight budget, it can be as simple as spending $10 on a book. Two good ones are Renee Evenson’s Customer Service Training 101 and Robert Bacal’s Perfect Phrases for Customer Service.

    Bacal’s book is a how-to manual for employees and includes hundreds of tools, techniques, and scripts for handling various customer interaction situations. Along with general tips and advice, it provides game plans for coping with specific customer situations, i.e., when you are late or know you will be late, when a customer is in a hurry, when a customer is abusive, etc.

    Customer Service 101 is a comprehensive but easy-to-read guide that helps business owners prepare front-line employees to deal with any customer-facing situation. It uses a step-by-step format and interactive lessons to help business owners come up with training solutions that are effective and easy to implement. The book includes practical techniques for training employees in critical customer service behaviors, such as:

    A buisness needs to decide what is most important to it and what outcomes it seeks.

  • Projecting a positive attitude and making a great first impression.

  • Communicating effectively, both verbally and non-verbally.

  • Developing trust, establishing rapport, and making customers feel valued.

  • Confidently handling difficult customers and situations.

  • Interacting effectively face-to-face and via telephone and e-mail.

    • Low-cost (and sometimes even free) resources are also available online. For example, E-Learning Center (www.e-learningcenter.com) offers a series of online customer service training courses covering topics such as defining service, communicating, fixing problems, building a customer service department, and tools of the trade.

    Customer service training seminars begin at $20 to $50 per head, and off-site three-day workshops start from about $1,800. Business coaches and business consultants offer on-site customer service training at prices typically starting around $250 per participant. Most also offer project pricing.

    Companies going the do-it-yourself route should be prepared to spend between $500 and $1,000 on materials. You want to make sure you get materials covering the right content and information to meet your needs and in sufficient volume for all your people. It’s also important to get materials in enough formats to cover different types of learning styles.

    In order to be effective, customer service training must match diverse learning styles.

    At many companies, customer service training is seen as a discrete event. When the trainer leaves, the workbook is filled in, or the online course is completed, the experience fades away until next time with no attempt made to measure its impact. Customer service training experts say that’s a big mistake. No matter what, training has to provide a return on investment, and that must be measured.

    How it is measured will depend on what goals you set out to achieve when you initiate training. In some cases, it might be measurable improvements in sales or profits. In others, it might be verifiable changes in employee behavior, i.e., the number of rings before a phone is answered, amount of time spent on customer service calls, etc.

    When it comes to customer service training, rarely is it possible to measure ROI with the level of accuracy achievable in some other areas of running a business. Nonetheless, researchers continue to try, especially in the area of customer service training’s impact on customer loyalty, as measured by customer retention. Consulting firm Bain & Co. found that increasing customer retention (a primary objective of most customer service training initiatives) by 5 percent can increase revenue by 25 to 90 percent and profitability by up to 75 percent.

    DO IT NOW!

    To reap the benefits of customer service training, businesses need to keep two caveats in mind: Don’t wait until it’s too late, and never stop.

    Customer service training is almost always undertaken to address some problem or achieve some goal that has been eluding a business. The problem is, most businesses wait too long to do it. Training is too often used in a reactive rather than a proactive manner. The businesses that have the greatest success with customer service training are those that integrate it into a more holistic approach.

    Hands-on management is key here. As a business owner or manager, unless you observe what is going on, you will never know the level of service your employees are providing.

    Business owners also need to be realistic in terms of their expectations from a timing perspective. When you wait too long and then bring in customer service training, often there is an expectation that behavior will change immediately. That won’t happen. It takes time.

    Finally, this needs to be an ongoing endeavor at every business. Learning, as well as training, is continual. Always be on the lookout for new ways to do the old. Start this process again when new products are introduced. The main reason customer service training must be a continual activity is that things will constantly change. Good customer service is critical to the success of all types of businesses. When it’s not there, businesses suffer. In a survey conducted by Mobius Management Systems, Inc., 60 percent of respondents said they had cancelled accounts with banks because of poor customer service, 36 percent changed insurance carriers, and 35 percent changed credit card providers. That’s a lot of unhappy customers.

    High levels of customer satisfaction translate to higher levels of repurchase intention.

    In contrast, research has found that high levels of customer satisfaction translate to higher levels of repurchase intention and actual repurchase, increased market share, and greater positive word-of-mouth. In other words, keep your customers happy and not only will they keep coming back and spending more, they’ll also recommend you to their friends and relatives.

    Customer service training is the key to making that happen, and it can’t be an afterthought if it’s going to be successful. The training doesn’t have to cost a lot to be effective, but it does need to be integrated into a process-based approach to identifying problems and opportunities in order to get the most out of it.