Most companies’ customer service is so bad that consumers “really expect to be treated like crap,” according to Peter Shankman, consultant and author of Nice Companies Finish First. He and his business partner Rachel Honig are so certain that treating customers kindly translates to higher revenues, that helping businesses be nicer is the main offering of their new consultancy, Shankman|Honig.
Turning things around shouldn’t be that difficult: “If you treat your customers one level above crap they’ll remember that and be loyal,” Shankman says.
But convincing businesses they need to change might be a tough sell. Among the data Shankman|Honig share in the infographic shown here is the sad statistic that 80 percent of businesses believe they deliver "superior" customer service, but only 8 percent of customers believe they have experienced superior service from those same businesses. How can businesses be so unaware that their customers think their service stinks?
Yahoo Small Business spoke with Shankman and Honig about what companies are doing wrong in customer service and how to fix it.
YSB: First, what’s your proof that nice companies finish first?
Peter: It’s great to be nice and there’s good karma, but at the end of the day a company is there to make money. I went to over 100 companies and talked to them. Companies that are nice and focus on customers have much higher revenues than companies that don’t care.
YSB: What is a typical trait of a nice company?
Rachel: Empowered employees, and active listening, and a CEO who doesn’t shield himself from anyone. Everyone from the janitor to the second in command has access to the CEO. When you have a CEO who is aware that revenues come from happy employees who feel like they make a difference in a company, customer service tends to be better
Peter: It’s cultural. It has to start with the CEO putting that culture in place and maintaining it or putting the right people in place to maintain it.
YSB: How can companies be so oblivious to their customers’ unhappiness?
Rachel: It takes constant evaluation. A company might audit themselves and hold onto that knowledge for 10 years. They need to do it regularly. A lot of companies confuse contact with service. Their account mangers say, “I’m talking to customers all day every day.” They might be talking all day but are they really picking up the phone and asking, “Are you happy? What could we be doing better?” You have friends you feel in touch with all the time on Facebook, but you recognize that’s not a real sit-down looking face-to- face asking, “How are your kids and how’s your marriage?”
YSB: Should companies use social media to get a handle on how they’re doing?
Peter: For years companies had no gauge. They have that today in the form of social. The problem is that a lot of companies use social media as a crutch: “We’ll just apologize on Twitter.” That’s not a customer service strategy, that’s a recipe for disaster.
We’re in a conversation economy. Providing great customer service almost guarantees a positive conversation. We are a society that trusts the people we know over the people we don’t know. For instance, I just became a Dad. If I have a great experience with a baby product, I’ll share that with my network. Customer service starts in real world and translates to social.But a lot of companies are confusing social media with customer service. They’re constantly focusing on trying to get new customers, while ignoring the customers they have. How many times have you seen a Twitter or Facebook message offering a discount to our 10,000th customer? What does that say to the first 9,999? It costs companies five times as much to acquire new customers as it does to keep current ones.
YSB: What one thing could every small business owner reading this do today to improve customer service?
Peter: If you’re B2B, call five of your customers tomorrow just to say, “Hi” and ask, “How are we doing?”
If you’re B2C, empower your employees to treat customers kindly and make customers happy. Let them offer a little discount when they want to and mark a “$1 smile discount” on the customer’s receipt. That kind of thing almost always promotes sharing. People are posting that receipt on Facebook, which makes other people smile and increases your revenue because it really does get people into the store.
Those customers become loyalists. Loyalists go out of their way to tell someone why you’re so good. On average, consumers tell 15 people about good experiences, but they tell 24 about their bad experiences.
And if you need proof of that, check out the Share Your Story section of the Shankman|Honig website where lots of livid customers—and a few happy ones—are sharing their most memorable customer service stories. Share yours too on Twitter using the hashtags #shstory and #ysmallbusiness.