Investing Checklist: Consider the Quality of Customer Service

Most organisations have the sound bites when it comes to customer service and have good intentions as relayed in their mission statement, which often aspire to providing a market leading level of service, but in reality very few businesses actually achieve this. Customer service is not rocket science nor is it an exact science, but in essence it is a about understanding your customers and satisfying their needs. A happy customer will participate in repeat transactions and promote your business to their friends and family through positive word of mouth, an unhappy customer may never return and might advise others to follow suit.

 

As a result of the economic downturn consumers are demanding even more when buying a product or service, some businesses will rest on its laurels and others will evolve to offer a mix that meets the exceeded needs of the customers in terms of service, price, quality and range. The importance of customer service as a differentiator will be vital to the success of many UK businesses, and those companies that evolve their service offering to continually search for new ways to improve its policies and procedures, with the customer as the central factor will have a better chance of long term prosperity.

Recently Which? carried out the biggest survey of its kind, in a poll consisting of 100 of the UK’s top shops which drew on the experience of 14,000 shoppers.  The survey was aimed at identifying customer satisfaction with the retailer offering, focusing on, price, quality, range, service and the store look and feel.  The top of the poll was dominated by specialist stores, Lakeland, Richer Sounds, Apple and Lush, with John Lewis department stores in at a respectable 5^th place.   At the opposite end of the 100 strong store survey came two major PLC’s in Currys Digital Dsg International (LON:DSGI) and Wh Smith Plc (LON:SMWH) . [ref] Top of the shops revealed by Which? Poll, 27 May 2010,   [/ref]

So far this year I have personally had two customer service experiences which are worth noting for opposing reasons.  Having been extremely pleased following my first experience purchasing a holiday with Tui Travel Plc (LON:TT.) last year I became a repeat customer this year, and must say that the pre, during and post level of service provided was exceptional in all aspects of the delivery.  Having a level of service delivered in this manner for the second year running certainly makes me want to look at the TUI Travel fundamentals in greater detail, as based on what I have experienced they clearly have their product and service at an extremely high level and embedded within their culture.

On the flip side, I have this year been disappointed with the level of service received by The AA in my hour of need.  Whilst on my way to delivering a 9:15 business studies lecture, my relatively new car ground to a halt on the main road just off a busy roundabout.   Having made the initial call, I was reassured that an AA patrol van or a local subcontractor would be out to assist me.  As it stands, The AA did not arrive for two hours, and followed a further two calls by myself to the call centre.  In the meantime I was pulled to nearby safety by The RAC, who stated that regardless of who I had cover with, The RAC could not leave me in a dangerous location.  The following day I received a call from a member of The AA Customer Service team which gave me an opportunity to air my concerns, with the most disappointing aspect of the service being a clear lack of communication with a stranded customer.  The customer service assistant pointed out that they usually phone and use the SMS to keep their customers informed but on this occasion the system failed, as a result I was given a 3 month extension to my membership period free of charge.  

By focusing on the customer and the quality of service provision, businesses could benefit from:

1. Reducing complaints:- dealing with complaints costs organisations a considerable amount of money through time, compensation and adverse word of mouth if not dealt with properly.

2. Increased repeat business:- a satisfied customer returns and potentially provides a long term source of trade. Retaining existing customers to participate in repeat buying is much more cost effective than attracting new customers through a marketing campaign.

3. Increased basket value:- through a level of service that exceeds the customers expectations it is more than likely they will increase their spend and buy additional associated products increasing the spend per head and overall sales revenue.

4. Improved brand image and reputation:- through focusing on becoming a brand that the customers trust and can subconsciously associate with for excellent customer care before, during and after a transaction. When customers realise that some of the businesses who offer cheap products and services don’t provide the level of service they expect they will always return to the reputable business.

5. A happy team:- An organisation who has the notion to provide excellent customer service in all that it does at its core and embedded within its culture and will have a happy and motivated team. Customer service starts with ensuring that your internal customers are happy, this will then be reflected in the service provided to the external customers. When customers are happy with the way they are cared for they are less likely to complain, which mean less unhappy and awkward customers to deal with!

Delivering excellent customer service is about exceeding the customer’s expectations in every aspect of their dealings with the business. It not a matter of devising a customer service policy and saying that will do, its about the policy and procedures evolving with the business taking into account the changing customer needs and technology.

When investing in a B2B or a B2C organisation, analyse the quality of customer service provided in all aspects of the business and then compare it to their main competitors. For a long term investment, brand image and customer service reputation both to its internal and external customers needs to be a key consideration.

Have you got any customer experiences good or bad?

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