Service Training and Customer Retention is the Key to a Prosperous 2014
Michelle Holmes, Director of New Chapter Learning, the specialist training provider based in North East England, looks at the reasons why companies who have invested heavily in service related training and leadership and management development are winning the battle on the street for customer retention.
Growing Pains
In our capacity as designers of training solutions, we are often confronted by teams who are under severe pressure to grow their businesses through ambitious sales targets. This places an enormous emphasis on the customer facing part of the business, and specifically in the area of new customer acquisition. Our role at first looks quite straight forward. Design and deliver training modules to a sales and customer service team, which ensures they are motivated to drive the business forward with energy, enthusiasm and with a keen eye for business development opportunities.
However, the straight forward solution demanded is not always the best. By digging a little deeper, and accessing the real value in a sales driven business, it is most common to find that the existing customer base is the secret to the longer term growth of the company. If you look at major brands, they derive most of their sales because of customer loyalty programmes. In the retail environment where competition is huge, the most successful performers generate growth from the medium to long term customers, whilst new customers are often transient and volatile.
Our training design often focuses more on delivering outstanding customer service. Only when the existing customer is completely embedded and loyal, does the organisation succeed. A loyal customer is a huge asset and a major advocate for a business, sometimes generating 6x their own sales revenue by referral and recommendation. Our training looks at the 4 A’s of customer service to ensure that the growing pains of an organisation are tempered by an exceptional commitment to customer retention.
So what are the 4A’s for Customer Service Excellence?
The 4 A’s stand for appearance, attention, attitude and accuracy, and whilst these are often applied purely as outward looking standards to help promote a business and improve customer service, they also underpin the internal customer service which is needed. Looking at each of the 4 A’s there are very simple ways an organisation can improve its internal processes which will generate big external impacts.
Appearance – First impressions count as much internally as externally. When a colleague approaches you for help, the way you deal with that request immediately creates either resistance or a positive outcome. The colleague, who sighs, pulls a face and makes a fuss when asked to support a colleague is something we have probably all experienced, but this is a first impression that can cause long term damage.
For many organisations where teams must work together to help the customer, the dealing with colleague enquiries can really impact on the final service offered to the customer. If your appearance to your colleagues is open, helpful and willing to support, then the really big gains come from an improved communication flow, which leads automatically to a better service.
Attention – Have you ever sat near a colleague who is always reading their texts, checking their emails or sorting through an in tray whilst you are trying to explain something of importance? This creates one of the most frustrating internal blockages to good communications internally.
A sales person would never dream of ignoring a customer who was talking to them by checking their mobile, or need to have requests repeated to them because they just weren’t listening. However, with colleagues this approach can be common place. Good internal attention requires colleagues to focus on their workmates and listen and respond. Simple good manners translate into really well motivated teams and managers who are seen as positive and focussed.
Accuracy – How easily do your colleagues find it to provide half answers to questions, or provide out of date information, because they cannot be bothered to search out the accurate information. The idea that you are being ‘efficient’ if you pass someone onto another contact who you ‘think’ knows the answer is nearly always doomed to failure.
The best way of demonstrating the need for the 4 A’s in practice is to consider some examples where customer service is not being applied to best effect.
A Balanced Training Portfolio is Key to Acquisition and Retention Strategies
We recently encountered a business that had a large energetic and enthusiastic direct sales force based in field sales, which were motivated and trained to develop new business enquiries through sales incentives. They were extremely successful, and had the ability to generate in the region of 4,000 new customers per month nationally. In all ways this was a signal that the business was doing well, and that by spending time with sales staff and through a range of motivational activity and incentives, lead generation and direct sales can be achieved even in the most competitive environments and the toughest trading conditions.
However, the business had no strategic plan for customer retention, and purely relied on a delivery led mechanism and direct logistics team to maintain existing customers. Whilst existing customers were frequently offered new incentives, and the business provided quarterly updates, so maintaining regular communication and contact, they had absolutely no training for the service teams. The individuals operating in servicing existing customers suffered from low morale and a lack of incentive beyond purely financial bonuses to deliver an exceptional service.
The impact of this major imbalance in the use of training resources means that for the first time in the businesses history, they achieved negative customer growth figures in the second quarter of 2013. Whilst they were bringing on 4,000 new customers per month, the number of lapsed or closed customers was 4,300 per month, meaning a net loss of customers.
These staggering numbers, show that for any organisation to really succeed, it needs a balanced staff training portfolio, and the importance of customer retention is just as important as customer acquisition.
The Fair-weather Customer Service Company Creates an Unstable Customer Pool
An online retailer we have worked closely with has created a great niche market for their products, and in terms of SEO, has excellent Google rankings across a number of key generic search terms. In many ways, this organisation has achieved the online vision, of a global market place with limited need for direct sales efforts and marketing. This has enabled the business to focus on product and offering the best price for the product. With impressive site visitor numbers and good quality products, at a highly competitive price, they sit in a very strong position.
However, they have failed to grow beyond a specific size because their customer retention levels are poor. Having spent some time with the business, and developing a real understanding of how they operate, what became clear was a fair-weather approach to customer service.
The business has a seasonal profile for peaks in workload, and during the periods of lower demand, the customer service offered by the business is excellent. Rapid delivery, good consistent and clear communications, and a real attention to detail with the customer, means that they offer an online experience as good as any comparable retailer, and because they personalise lots of communication, this fosters enormous goodwill and feedback from customers.
In peak periods of sales, this approach is completely absent, and the focus shifts from personalised online retailer, to mass market tactics, with no evidence of customer service. The company recognises this issue, but was unwilling to accept it as a problem initially, blaming resources and escalated logistics for the problem. The net outcome of this is that loyal customers are disappointed by the response they get from referral customers who do not get the same consistent approach to customer service. There is also a major drop off in customers acquired during the peak periods of site traffic and sales.
The business has remained buoyant despite this apparent fair-weather approach to customer service. However it potential for exponential growth has been seriously hampered because of a lack of focus on customer service when it is needed the most.
By altering the priorities of the business, and focussing on customer service with training and development of systems which ensure consistency for customer experience at any time of the year, the business could achieve major growth, and the customer retention it needs could easily be achieved.
Trading Online is no excuse for a lack of best practice in customer service training. Whilst the initial transaction may be through technology and interactions can be automated, the reality of the world is that people buy from people, and so having a customer service ethos is an important online and on the High Street or over the telephone.
Conclusion
We develop solutions for companies which work to develop their people. We look at leadership and management as the key to developing an organisation which moves single-mindedly in the right direction and has a clear focus. The major drive in 2014 for an organisation like New Chapter Learning will be to shape and deliver training for businesses which ensure new customer acquisition is balanced alongside customer loyalty and retention training, so that the foundations for growth are established.
About Michelle Holmes
Michelle is a highly experienced trainer and designer of training, having working in major financial institutions at a senior level, and now as an independent contractor. With over 20 years experience she regularly delivers leadership and management training programs to groups and has been at the forefront of designing and embedding e-learning as a practical tool for organisations from SME’s to major public sector clients.
About New Chapter Learning
New Chapter Learning based in Northern England is a leading independent training consultancy working directly with businesses and offering specialist training design and delivery services to other training organisations and large in-house teams. The business has an ethos of developing learning
Mark Carton
0191 5641444
If you plan, design or deliver learning, New Chapter Learning can help you to start a new chapter in your business success.
Through passing on a few of our tried and tested secret recipes, we can help you to improve learner engagement whilst reducing delivery costs and improving the impact of training investment.
The team at New Chapter Learning is passionate about learning, we champion personal and organisational development through learning, and we recognise that training professionals need opportunities to learn too. Our customers tell us that we’ve helped them to start a new chapter in their business success by introducing learning that sticks, and we’d really love to help you to start your own new chapter too
Tags:
