Four Levels Of Customer Service

The level of customer service wherever you are on one of these levels largely determines business success or failure.

  • Number one, you meet expectations. The first level is the basic level, the minimum requirement for survival without meeting customer expectations consistently; you have no chance in a competitive business. Most anger and other negative emotions in life and in business arise as the result of frustrated expectations. When you expect to get something, whether or not your expectation is based on fact or fantasy and your expectation is not fulfilled, you become angry if someone promises to meet you at a certain time and you wait around for an hour, but the person never comes. You\’ll be angry about the situation. Your expectation was frustrating, and you were disappointed. Similarly, customers expect to get certain things when they buy a product or service. They expect the product or service to work the way you said it would work. They expect that you will treat them politely and courteously. They expect that your billing and payment procedures will be accurate. They expect correct change from you if they\’re giving you money. They expect that the product will be clean and presentable. They expect that if they have a question, someone will answer the phone and give them a complete and accurate answer in a positive and polite tone of voice. Some customer expectations are explicit. This means that they\’re clear and part of your offering, even written down or promised verbally. Other customer expectations are implicit, like the expectation that you will treat them politely. It\’s not written down, but people just assume that you will. They\’re neither spoken about or written, but they exist nonetheless. Your failure to meet customer expectations of either kind will cause customer blowback and can frustrate any of your desires for repeat business.
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  • The second level of customer service is where you exceed expectations. This is where you do something in the sale or after the sale that exceeds what the customer expected. The action of exceeding expectations brings a smile to the customer\’s face. It causes the customer to feel warm and positive toward you. It makes the customer happy. All business growth and success in a competitive economy requires that you continually exceed your customers’ implicit and explicit expectations. This, of course, requires that you are clear about what your customers expect so that you can go beyond it. There\’s a restaurant not far from where I live. This restaurant is always falling and has been full for 15 years since it opened. Many other restaurants offer the food of similar quality, but this restaurant is always full. Why is that? Here\’s one reason from the first month that they were open, the manager of the restaurant would make random phone calls to people who had dined at the restaurant. When you found in to make a reservation, you gave your name and phone number. Within a couple of days after your visit, the manager would phone and ask, How was everything during your visit? No other restaurant that I have ever been to has ever used this strategy. It\’s quite endearing. In most cases, my comments have been positive and uplifting. Occasionally, I\’ve had a problem with a particular dish. The next time I came in, they would always give me a complimentary order, dessert, or even a bottle of wine. They would explain that this was to thank me for giving them my candid comments to help them be better in the future. People who go to this restaurant are very loyal. They return over and over again. They bring their friends and family members who also become regular patrons. As I said, the restaurant is always at full because they exceed expectations. Even the small effort of phoning their customers afterward to ask for their opinions and, you know, people love to give their opinions.
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  • The third level of customer satisfaction is where you delight your customers. This is where you do something that is above and beyond the actions of exceeding expectations. You delight your customers when you go the extra mile. You do something that is considerably more than what they could imagine that the business would do. It comes as a pleasant surprise. For example, when a woman shops at Nordstrom stores and feels torn among three dresses or outfits, the salesperson quite cheerfully recommend that she buy all three, take them home, get an opinion from her husband, and then just bring back the ones she doesn\’t like. Nordstrom has a 100 percent refund guarantee policy. No questions asked. You can buy anything from a Nordstrom store anywhere and take it back any time and get a full refund with no questions and no hassles. For this reason, among others, people who go to Nordstrom stores buy with both hands. Nordstrom consistently delights its customers by making shopping so easy and enjoyable.
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  • The fourth level of customer service is where you amaze your customers. This is when you do something that is so beyond imagination that your customers light up like an electrified Christmas tree and become so excited and impressed that they tell everybody they know. Federal Express has a slogan when it absolutely positively has to be there overnight. For this reason, people who absolutely have to get a letter or package delivered use Federal Express to the tune of $50 billion each year. Sometime ago, a blizzard closed the mountain passes between Denver and Breckenridge, Colorado. Federal Express had committed to delivering a rush package to a business in Breckenridge on his own initiative. The local Federal Express office manager chartered a helicopter for $7500 to fly over the mountain land in the parking lot and deliver the package. When the business owner expressed his amazement and delight, the Federal Express manager said We value keeping our delivery promises more than the money. He then flew back to Denver. This story has now been told and repeated thousands of times. It has generated millions and billions of dollars worth of additional business for Federal Express. When you make a special effort to amaze your customers by doing something that they could not imagine a normal company would do, you create goodwill and customer loyalty that can generate business year after year?
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Stu Leonard, who built the Stew Leonard Dairy Store in Norwalk, Connecticut, into the most successful grocery operation in the world, did it all on the basis of incredible customer service on a huge rack outside the store. He had engraved the stool entered customer service principle, which I paraphrased earlier, rule number one.

> Rule: The customer is always right. Rule number two If the customer is ever wrong, reread rule number one.

Stu Leonard had a moment of awakening early in his career by conducting customer surveys. He estimated that a loyal customer who shopped at his supermarket would spend $100 per visit and visit 50 times each year. He also discovered that the average customer would shop with his store for about 10 years if he or she were satisfied. Doing a quick calculation 100 times 50 times 10 equals $50,000. He concluded that each person who came to his store was a potential $50,000 customer. From that moment on, every person who works in his store at every job is trained to imagine a label on the forehead of every customer that reads $50000. Each customer was treated as though he or she was there to buy $50,000 worth of groceries. Each customer was treated as though he or she was an extraordinarily valuable customer, and it paid off. Still, Leonard carries only 2000 items, but it sells more of those 2,000 items individually than any other store in the world. And people keep coming year after year to experience the fantastic customer service and bring their friends along for a visit.

Fred Recalde of Bain and Company wrote a book in 2006 called The Ultimate Question.

He and his colleagues did many years of market research, interviewing customers in a variety of ways to determine methods to increase customer satisfaction. After several years of research with many thousands of customers, he concluded that the most important question, the one question that distills all the other answers to all the other surveys, was Would you recommend us to others?

In the final analysis, the true measure, the success of a business, the true evaluation of the products and services sold are summarized in answer to that question. Would you recommend us to others? They then instituted one to 10 surveys. They would ask customers on a scale of one to 10. How strongly do you feel about recommending us to others? What rankled and his associates discovered was that 85 percent of their new business came from people who answered this question with a 9 or a 10 on the one to 10 scales. They call this the ultimate question. I think it\’s one of the greatest breakthroughs ever made in understanding business, marketing, and customer service. This ultimate question can become your focal point and measure for all of your business operations, and especially all of your interactions with customers. Your goal is for every customer to rank you at a 9 or a 10 in answering the question. Would you recommend us to others?

In 1981, Jane Carlson, an executive, took over the presidency of the troubled Scandinavian Airlines system SAS, a company with a bad reputation for quality and customer service. It was losing money.

Carlson was brought in to save the airline. He took the corporate pyramid with the president on top and staff at the bottom and turned it upside down. He announced to the company that from that day forward, the front-line people, those who dealt with customers both personally and on the telephone, were at the top of the pyramid, and the president, executives, and everyone else in the company worked for them. Everyone in the company, including himself, was lower down in the corporate pyramid than the people who worked with customers. Carlson then called every customer contact a moment of truth; a term coined by Richard Norman in his book Service Management. He said that every single time a customer comes into contact with anybody in SARS, it is a moment of truth that determines whether they use SARS or a competitor in the future.

Every person in the company was empowered to do everything possible to make every customer contact a positive moment of truth. Their job was not only to meet expectations but to exceed expectations and to amaze and delight customers in every way possible by implementing this philosophy companywide. The people of Scandinavian Airline Systems turned the business around. It went from losing money to becoming highly profitable. It went from being criticized by customers to being one of the most desirable airlines in Europe by focusing on customer service on ensuring a high score to the ultimate question. Would you recommend us to others? Carlson and his people created a modern marketing miracle. Customers are the most important person in your business. Without customers, there is no business to grow your business. You need more and better customers. You need to attract people to buy from you and to bring their friends. You need to upsell and cross-sell those customers, so they buy more each time, and they buy more frequently. In every case, it is customers, customers, customers to ensure a high, steady, and an increasing number of customers. You must continually test and measure every part of your marketing mix. You must continually evaluate your business against the four keys to marketing strategy. You must continually improve in every area and activity of your sales process. One small change can dramatically improve the results and profitability of your business.