This document discusses the importance of after-sales service and customer satisfaction. It notes that 68% of customers change suppliers due to problems with customer service. Customer satisfaction results from meeting or exceeding customer needs, wants and expectations throughout the product/service life. Dissatisfied customers will actively seek out competition and negatively impact the business through word-of-mouth. The document provides 20 guidelines for effectively handling customer complaints to resolve issues and build loyalty.

1. F&B—SALES SERVICE
CUSTOMER BRICKBATS BOUQUETS
Pareto’s Law
INPUT OUTPUT
Study Materials Exam Questions
Customers Sales
Menu Items Sales
Enquiries Sales
Service Sales
20%
80%
80%
20%
How is it possible for 20% of input to yield 80% of output?
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2. How Important Is After-Sales Service?
According to Jon Anton of Purdue University, when customers are asked, “Why did you
change products or suppliers?”, a whopping 68% reply, “I had a problem with customer
service!” In other words, we terminate most customer relationships by not focusing on
managing it after the initial success of a sale.
All others; 15%
Dissatisfied with
product; 17%
Shortcomings in
customer service;
68%
What Is Customer Satisfaction?
Customer satisfaction is a state of mind in which a customer’s needs, wants and expectations
throughout the product/service life have been met or exceeded, resulting in re-purchase and
loyalty. It is the bridge between short-term success and long-term success.
SHORT-TERM LONG-TERM
SUCCESS SUCCESS
e.g. closing a sale e.g. repeat business
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3. Consequences of Customer Satisfaction
FOUR LEVELS OF CUSTOMER
CONSEQUENCES
SATISFACTION
The DISSATISFIED customer • Will actively seek out the competition
The UNSATISFIED customer • Will bad-mouth our product/service
• Will say nothing
The SATISFIED customer • May jump to the competition if
opportunities occur
• Will tell others about our product/service
• Will re-purchase
The DELIGHTED customer • More of the same
• Other products/services
• More expensive products and services
EVANGELISM
100%
80%
60%
CUSTOMER
LOYALTY
40%
20%
TERRORISM
0%
DISSATISFIED UNSATISFIED SATISFIED DELIGHTED
CUSTOMERS CUSTOMERS CUSTOMERS CUSTOMERS
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4. Do Customers Like to Complain?
UNHAPPY CUSTOMERS HAPPY CUSTOMERS
• Retaining customers cost 20% of
• Only 4% of unhappy customers prospecting for new ones
complain • Happy customers are willing to pay more,
• More than 90% won’t come back i.e. buy A+ and A and B
• Each one will tell nine others • Each one will tell five others
The Value of Customers’ Word of Mouth
Positive word of mouth will not necessarily get us a new sale, but negative word of mouth
will guarantee us no sale. How much potential business can be generated when our loyal
customers say good things about our company and our products/services? The results of a
study conducted by General Electric’s market researchers in 1993 indicate overwhelmingly
that potential customers place great importance on the opinion of friends before making a
purchase decision.
OPINIONS OF FRIENDS
USEFUL 61%
NOT VERY USEFUL 12%
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5. HANDLING CUSTOMER COMPLAINTS—TWENTY GUIDELINES
Despite having all the best intentions to provide a first class service and product, it is virtually
impossible for a business to avoid some degree of customer dissatisfaction at some time or
another. When this occurs, the overwhelming majority of customers choose to vent their
feelings by simply deciding not to buy from you any more. Therefore, when a customer
makes an effort—and yes, it takes effort, energy, time and money for a customer to lodge
their dissatisfaction—to complain, take it seriously. Thank whatever you hold holy in your
belief and treat it as a business opportunity to
• Make amends and restore goodwill
• Re-enforce the relationship and build customer loyalty
• Alter any procedures or products to ensure that other customers don't encounter the same
problems
• Look professional and keep your company—and your personal—reputation intact
A lot of customer service complaints and enquiries arise as a result of poor communication:
perhaps customers were confused over the terms of a particular offer or misunderstood the
repayment terms. This tells us that our message needs to be put across more clearly in the
future.
In certain businesses, customer complaints can vary widely in their nature and so putting a
formal policy in place may not be very helpful when it comes to dealing with them. It can be
more constructive to define the stages of the complaints procedure and create a set of
guidelines for appropriate responses.
Twenty Guidelines
1. Receipt, Acknowledgement and Logging of Complaint
• This is the initial contact from the customer whether it is done verbally, by e-mail, by
letter, over the phone or by fax
• If the complaint cannot be resolved immediately, it should be acknowledged, in
writing if appropriate, and any relevant details logged
• The acknowledgement letter should indicate that the matter is being investigated and
with an estimate of when the complainant can expect a follow-up reply
2. Investigation
• The problem should be looked into in detail and the source identified
• If there is a fault, it should be remedied
3. Response
• You should contact the customer when the investigation has been completed
• Report your findings
• Let the customer know what action is being taken to remedy the situation
• Depending on your customer relation policy, the particular complaint, any warranty
or guarantee commitments, consumer rights, the customer expectation, etc, you may
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6. wish to make amends at this point by offering some form of compensation, perhaps a
refund or gift voucher
4. Follow Up
• It is important to follow up on the complaint resolution by finding out whether the
customer is satisfied with the way in which the complaint was handled
• This is very useful since it enables us to find out which level of compensation is
needed to offer to keep the customer on board (!)
5. Candour
• Customers like to see some level of transparency when we are dealing with their
complaints
• Honesty can be the best policy in certain circumstances but always be aware that your
frank admission that a product you sold had seen better days may backfire if your
customer seeks redress through the courts
6. Equity
• Fairness is an important part of complaint resolution and it must apply to customers
and staff
• Poorly-treated employees invariably poorly treat customers
7. Efficiency
• Speed and effectiveness should feature highly
• Don’t procrastinate
• There's no point on letting unresolved problems drag on
• A delay in responding will only irritate customers further
• Handle complaints quickly and first time
8. Accountability
• Make sure that the customer knows who is handling the complaint and give out
contact details
9. Commitment to Customer Service
• Ensure that commitment to good customer service shines through in each step of the
resolution process
10. Admit Mistakes and Apologize
• Just because you made the sale does not mean you can become defensive
• Equally, just because you did not make the sale does not mean that it is not your
problem or your fault
• As far as customers are concerned, they have bought from your company, not from
John or Mary
• Whether or not you have personally made the sale, whether or not you are in the
“sales department”, listen actively, admit mistakes and apologize
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7. 11. Show Compassion for Your Customer
• It does not matter if the complaint initially appears to be true or false, reasonable or
exaggerated, real or imagined
• Show the customer that you are concerned and will investigate the problem
immediately
• Help the customer calm down by saying "I can understand why you feel they way you
do."
12. Actively Listen to Your Customer's Complaint
• Let customers talk
• Let them vent their dissatisfaction, unhappiness, frustration—even anger—if
necessary
• Talking reduces the stress and anxiety
• On our side, listen, listen and listen—and listen some more
• Give sympathetic acknowledgement responses and the appropriate non-verbal
communication and paralanguage
13. Don't Pass the Buck
• We may transfer the complaint to someone else in the company but we cannot
transfer customer to someone else
• Doing so undermines the integrity and organization of the company and your
customer will lose confidence in your firm
• Everyone is responsible for handling customer complaints
• It is everyone’s responsibility to listen, take notes and then transfer it to the best
person in the company to handle it
14. Build Meaningful Relationships With Employees
• Employees need to believe in the value of each customer to know how to serve them
well and be motivated to do so
• Employees must be made to understand their mutual dependence with customers—
without excellent customer service, businesses stagnate and fail
• Jobs, wages, working conditions and raises are all paid for with customers' money
• Employees need to think like owners when it comes to valuing customers
15. Treat Employees As Partners
• For customer service—and handling of customer complaints—to work, employees
need to be treated as partners and to feel as if they are important and valuable
° Create an environment where people enjoy working
° Employees must be basically satisfied with their jobs in order to give good
service to customers
° They must feel that they are respected and fairly compensated for their work
° Unhappy employees will not give good service no matter how good your training
programmes are
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8. 16. Involve Staff in Customer Service Decisions
• Front line employees in particular have direct information about what customers want
• Including employees in the process of designing and implementing a customer
service strategy helps motivate them to make it work
• Employees are more likely to consistently offer exceptional service if they have been
instrumental in defining it
17. Empower Employees
• When employees are motivated and trained to meet customer needs, they can be
empowered—trusted—to deliver great performance
• While empowerment is a part of employee satisfaction, it is critical for excellent
customer service
• For customers, it means there is always someone available with the tools and power
to meet their needs
• The basis for empowerment is trust in employees
• Empowered employees have ownership of their jobs and have the authority to use
their best judgment in performing their work
• They are accountable for their performance and gain the respect of their co-workers
Example of Employee Empowerment
• An example of employees being empowered to give excellent service would be
authorizing every employee to handle a situation in which a customer is unhappy with
a product he or she bought, without having to tell the customer, "I'll have to get the
manager" or "I'm not sure that our policy allows that."
• The employee would see the customer's displeasure as an opportunity to build loyalty
and trust by offering whatever it takes to make the customer satisfied
• The employee knows that management will be supportive and encouraging—as long
as it puts a smile on the customer's face
• It is probably impossible to create relationships with customers without a valued,
empowered workforce
• Building relationships with staff sets the stage for exceptional service
• Caution: employee empowerment can backfire if
° Abused
° Mis-used
18. Empathize With Customers
• View the customer-employee relationship from the perspective of the customer
• Storytelling about personal experiences of employees as customers and role-playing
customer interactions put employees in the customers' shoes
Example of Employee Empathy
• At a recent workshop, an employee told a story about shopping in a hardware store
where she had asked an employee for assistance in finding the electrical department
• She did not feel appreciated or served when he dId not stop or even turn to her
• He merely pointed and kept going
• I asked if there were any signs or maps indicating where the electrical department
was
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9. • She replied, "Maybe, but he was right there. He could have helped me!"
• Later, another employee commented that customers never bother to read signs
• By recalling the previous story, we were able to shift feelings about customers from
judgment to empathy
19. Knowledge on the Importance of Customers
• All employees—even the CEO—need to understand the relationship between
customer satisfaction and business success
• They also need skills to deliver good service and the opportunity to practise their
service skills away from customers
• Involving employees in developing customer service standards builds relationships
with them and makes it even more powerful
• In addition, employees can help develop a programme of recognition and rewards that
reinforces and sustains performance
• As people are rewarded for certain behaviours, they feel more successful and build
more knowledge about what works and what doesn't
20. Prioritize
• Too many companies—and managers and employees—do not consider customer
service a priority
• We develop systems to ensure accurate pricing but not customer service
• We make sure products are refrigerated properly but leave serving customers to
chance
• We invest in resources to safeguard cash but leave our most value asset—loyal
customers—unprotected
• Every job description must begin with providing excellent customer service
• Everyone must understand—and apply it—that serving customers is PRIORITY #1
• It is more important than stocking shelves, ordering products, filing in a report and
most critical of all:
It is more important to serve the customer
than to serve the boss.
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10. FOUR COMPONENTS OF CUSTOMER FOCUS
Build Inform Show Solve
relationships we care problems
Build Relationships
• Demonstrate basic courtesy and respect to customers
• We want them to feel welcome
• We hope they will like us and want to come back
• The focus is on friendly, welcoming and attentive behaviour
Inform
• All employees must learn how to help customers by actively listening to them and
giving them what they want
• Active listening involves being aware of and sensitive to our written
communication, verbal communication, non-verbal communication and
paralanguage
• Learn how to tell when customers need help before the ask—and before the leave
• Identify FAQs and appropriate responses
Show We Care
• Build quality into every aspect of the business
• Every decision, procedure, policy, guideline, function and process should be tested
by the question: “What does this do for/to the customer?”
• Return policy, special order system, billing and pricing, suggestions, telephone
messages, e-mail protocol, etc need to make the customer experience easy,
satisfying and friendly
• It is our job to remove barriers, not create them
Solve Problems
• Train employees how to solve problems with grace and concern
• No matter how hard we try, Murphy’s Law will hold—anything that can go wrong
will go wrong
Sources:
http://www.independentbusinessadvisor.co.uk/marketing_sales/cs_customer_complaints.jsp,
http://www.alessandra.com/saysyes.htm,
http://www.cooperativegrocer.coop/cg1997/custservice.shtml and
http://www.resultsforbusiness.co.uk/customerservice/complaints.shtml,
accessed 25 October 2005
Louis Lim, June 2006
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