F&BSALES SERVICE CUSTOMER BRICKBATS BOUQUETS

Paretos Law

INPUT Study Materials Customers Menu Items Enquiries Service

OUTPUT Exam Questions Sales Sales Sales Sales

20%

80%

80%

20%

How is it possible for 20% of input to yield 80% of output?

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 1 of 10

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 customers 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 SUCCESS e.g. closing a sale

LONG-TERM SUCCESS e.g. repeat business

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 2 of 10

Consequences of Customer Satisfaction

FOUR LEVELS OF CUSTOMER SATISFACTION CONSEQUENCES

The DISSATISFIED customer The UNSATISFIED customer

Will actively seek out the competition Will bad-mouth our product/service Will say nothing May jump to the competition if opportunities occur Will tell others about our product/service Will re-purchase More of the same Other products/services More expensive products and services

The SATISFIED customer

The DELIGHTED customer

EVANGELISM

100%

80%

CUSTOMER LOYALTY

60%

40%

20% TERRORISM 0%
DISSATISFIED CUSTOMERS UNSATISFIED CUSTOMERS SATISFIED CUSTOMERS DELIGHTED CUSTOMERS

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 3 of 10

Do Customers Like to Complain?

UNHAPPY CUSTOMERS HAPPY CUSTOMERS

Only 4% of unhappy customers complain More than 90% wont come back Each one will tell nine others

Retaining customers cost 20% of prospecting for new ones Happy customers are willing to pay more, i.e. buy A+ and A and B 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 Electrics 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 NOT VERY USEFUL

61% 12%

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 4 of 10

HANDLING CUSTOMER COMPLAINTSTWENTY 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 effortand yes, it takes effort, energy, time and money for a customer to lodge their dissatisfactionto 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 companyand your personalreputation 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

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

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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 Dont 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

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 6 of 10

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, frustrationeven angerif necessary Talking reduces the stress and anxiety On our side, listen, listen and listenand 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 everyones 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 serviceand handling of customer complaintsto 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

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 7 of 10

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 empoweredtrustedto 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 encouragingas 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

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 8 of 10

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 employeeseven the CEOneed 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 companiesand managers and employeesdo 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 assetloyal customersunprotected Every job description must begin with providing excellent customer service Everyone must understandand apply itthat 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.

Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets

26h Consecutive Year

Page 9 of 10

FOUR COMPONENTS OF CUSTOMER FOCUS

Build relationships

Inform

Show we care

Solve 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 askand 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, Murphys Law will holdanything 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 Lausanne Executive EducationSummer Programme 2006 F&BSales Service, Customer Brickbats Bouquets 26h Consecutive Year Page 10 of 10