ACHRNEWS

Service truths that can make or break your business

May 9, 2000
Throughout the 19th century and the first half of the 20th, railroad companies ranked among our nation’s corporate elite. Railroads provided the main means of hauling people and freight over long distances throughout a growing nation.

Now, the railroad industry is but a shadow of its former self. Many of the biggest names have long faded from the scene through mergers and bankruptcies. The U.S. government feels compelled to operate its own railroad, Amtrak/Conrail, to fill perceived gaps in needed service.

This, many business professors would tell you, was a result of the railroad companies failing to see the big picture in understanding what business they were in. They looked at themselves as railroaders.

In reality, they were part of the transportation industry. How they moved goods and people was irrelevant to their customers. All the customer cared about was getting from one place to another in the quickest, cheapest, most convenient way possible.

As time passed, they increasingly saw trucks and airplanes as better able to meet those criteria than railroads. Had the railroad companies diversified into trucking and air transport, they might well still be thriving.

Stinkin' thinkin'

What business are you in? The vast majority of you would likely reply that you are in contracting, providing specialized construction-related expertise and labor.

This is accurate as far as it goes, but invites peril if you don’t take a broader look at what you do.

You also are part of a huge agglomeration of businesses known as the service industry. Customers hire you because they are looking for you to provide particular kinds of construction services they are unable or unwilling to do for themselves.

How you render that service is just as important as the technical expertise you bring to the job.

Contractors who see themselves solely as skilled technicians have a tendency to think their customers need them more than they need the customers — especially when they have more work than they can handle.

This is stinkin’ thinkin’.

Sooner or later work slows down, and in any given market there are numerous competitors who can do the work just as well, more or less.

The average first-time customer can’t tell the difference between the skillful contractors and the schleps. If they could, they might not be so inclined to worship in the temple of the low bidder.

Service-oriented contractors do everything possible to accommodate the customer’s needs and desires with regard to budget, scheduling, and any other particulars the customer regards as important. They adhere to the old adage, “The customer is always right.”

That old adage has fallen by the wayside in modern times. In reality, we all know the customer often is wrong, and sometimes acts downright foolish.

Consumer psychology

What “The customer is always right” really means is that the customer is always to be treated with dignity, respect, and professionalism.

A wrong-headed customer needs to be turned around through diplomacy and salesmanship, not bluster and intimidation.

Technical Assistance Research Programs (TARP), Arlington, VA, is a company that has made a business out of probing consumer psychology. Here are some of its landmark findings.

Profound Customer Service Truth #1: Word of mouth is the best form of advertising.

TARP’s studies have shown that if you excel at customer service, each satisfied customer will tell an average of three other people about you.

This is encouraging. It’s like getting three satisfied customers for the price of professionally serving one.

However, before you get too excited about this, ponder for a moment the next profound truth, which ought to send a big chill up your spine.

Profound Customer Service Truth #2: Bad news travels farther than good news.

TARP also has determined that if you mess up, each dissatisfied customer will tell, on average, 15 other people about you.

Contemplate that arithmetic. If you do well by someone, that person will spread the word to three other people. But if you goof up, on average 15 other people will hear about it.

This means you have to recruit five satisfied customers to make up for every one who gets peeved at you.

What’s more, it is much easier to irritate someone in the course of your work than to please a person. Show up on time, do a decent job, charge a reasonable price, and most of the time you won’t get any special thanks. That’s what a customer had the right to expect all along.

But inadvertently track a little dirt in the house, say the wrong thing, take a little longer, or charge a little more than expected, and you’ve made an enemy. If the customer is in a bad mood to begin with, the slightest misstep could trigger a snit fit.

This is the most daunting customer service truth. You have to truly excel at customer service to overcome all the badmouthing that is bound to come your way, even when you try to do a good job.

Profound Customer Service Truth #3: Complainers are your best friends.

TARP found that for every complaint made to a company, there are 26 silent, dissatisfied customers. Only 4% of customers with a grievance will bother to raise it with company personnel.

Your problem is not with the 4% who call or write a letter telling you they’re mad; it’s with the other 96% who suffer your perceived neglect in silence. That’s because of the next profound truth.

Profound Customer Service Truth #4: Silence is not golden.

TARP’s studies determined that of customers who have a grievance but do not take the time to complain, 63% will switch companies without telling the offending firm why.

For most people in business, dealing with complaints is the most agonizing part of their work. But cherish the complainers. Their complaints serve the same purpose as a baby’s cry. They are the ones who inform you that something is wrong, and thus give you a chance to correct it.

The people who suffer in silence are the ones you have to worry about.

Profound Customer Service Truth #5: Customer anger can be turned to your advantage.

Of customers who do complain and receive a satisfactory response, TARP found that 70% become a firm’s most loyal customers.

Just as reformed sinners become the most avid churchgoers, so it is with business clientele who get turned around. A mistake is an opportunity to solidify business relationships and establish long-term bonds. It enables you to talk at length to a person as you investigate the complaint. This helps you get to know them, to connect with them as a friend.

Remember, you don’t have this opportunity with the majority of dissatisfied customers who simply take leave without telling you why. Learn to love the complainers.