Customer Service Management Tips - Part 1
by: Daryl Cowie
Customer support teams are perhaps the most misunderstood, and underappreciated teams in the business world. In many businesses the customer support staff talks to the customers more than every other team combined. They play a critical role in ensuring customers are satisfied. Satisfied customers are repeat customers. Everybody knows that a large percentage of business comes from repeat customers. And yet customer support teams are commonly staffed with junior, inexperienced people that don't have the authority to make any decisions, or the training and knowledge to answer difficult questions. What's the deal?
What is Customer Support?
First, let's clarify what I mean by "Customer Support", because different companies use this term in wildly different ways. I am talking about the team that takes care of the customer after the contract has been signed and the initial invoice has been paid. You may work in a company where a customer service team handles the transaction from order to invoice. You may have been taught that customer service starts when the customer walks in the door, and doesn't end until the customer dies or decides not to be a customer any more. These are fine concepts, but what I am talking about here is the role of taking care of the customers' needs after the invoice has been paid, and before they have expressed a specific interest in buying again. I refer to this as Post-Sale Customer Support to differentiate it from other definitions.
What's So Important About Post-Sale Customer Support?
As a customer, up until the time that the invoice is paid you always hold the trump card of being able to withhold payment if you are not satisfied. And everybody understands that money talks. After the invoice has been paid you can often be left feeling powerless. The delivery team has collected their money and been assigned a full load of new customer transactions to look after. The sales team is being pressured to focus on customers who have already expressed a specific interest in making a purchase to meet monthly sales targets. So who takes care of you now?
This is where customer support comes in. There is a general feeling within most companies that they need to provide some sort of post-sale customer support, but there is a poor understanding of why. The sales team brings in the customers – which equals the promise of money. The orders team works out the details – which equals the promise of money. The delivery team provides the solution – which equals the collection of actual money. The customer support team ensures the customer is able to use the solution – which equals what? Happiness and karma? Let's face it; shareholders can't trade in their karma for a retirement home. Companies want money.
Here's what people are missing. In a healthy business between 25 and 75 percent of all revenues should come from repeat customers. 25% to 50% is considered typical for a healthy retail outlet, and 75% repeat business would be the top end for a healthy service business. Retail outlets with less than 25% repeat business are probably not meeting their customer needs or more of them would be coming back. Service businesses with more than 75% repeat sales are probably losing their skills at generating new customers and run the risk of severe financial problems if they lose 1 or 2 major accounts. Any way you look at it, a very large part of your business should be coming from repeat customers.
The other factor you need to look at is that the cost of getting a new customer is much higher than the cost of keeping a customer that you already have. Marketing and advertising are expensive business.
Smart businesses invest in retaining customers. That's what customer support is all about. There is no better time to ensure repeat business than when your customers are feeling that they have no leverage. That is exactly when they appreciate your support the most, and will remember it as something that makes them want to come back.
In part 2 of this series we'll look at some practical management tips for customer service managers to get the business behind your team and your customers.
Customer support teams are perhaps the most misunderstood, and underappreciated teams in the business world. In many businesses the customer support staff talks to the customers more than every other team combined. They play a critical role in ensuring customers are satisfied. Satisfied customers are repeat customers. Everybody knows that a large percentage of business comes from repeat customers. And yet customer support teams are commonly staffed with junior, inexperienced people that don't have the authority to make any decisions, or the training and knowledge to answer difficult questions. What's the deal?
What is Customer Support?
First, let's clarify what I mean by "Customer Support", because different companies use this term in wildly different ways. I am talking about the team that takes care of the customer after the contract has been signed and the initial invoice has been paid. You may work in a company where a customer service team handles the transaction from order to invoice. You may have been taught that customer service starts when the customer walks in the door, and doesn't end until the customer dies or decides not to be a customer any more. These are fine concepts, but what I am talking about here is the role of taking care of the customers' needs after the invoice has been paid, and before they have expressed a specific interest in buying again. I refer to this as Post-Sale Customer Support to differentiate it from other definitions.
What's So Important About Post-Sale Customer Support?
As a customer, up until the time that the invoice is paid you always hold the trump card of being able to withhold payment if you are not satisfied. And everybody understands that money talks. After the invoice has been paid you can often be left feeling powerless. The delivery team has collected their money and been assigned a full load of new customer transactions to look after. The sales team is being pressured to focus on customers who have already expressed a specific interest in making a purchase to meet monthly sales targets. So who takes care of you now?
This is where customer support comes in. There is a general feeling within most companies that they need to provide some sort of post-sale customer support, but there is a poor understanding of why. The sales team brings in the customers – which equals the promise of money. The orders team works out the details – which equals the promise of money. The delivery team provides the solution – which equals the collection of actual money. The customer support team ensures the customer is able to use the solution – which equals what? Happiness and karma? Let's face it; shareholders can't trade in their karma for a retirement home. Companies want money.
Here's what people are missing. In a healthy business between 25 and 75 percent of all revenues should come from repeat customers. 25% to 50% is considered typical for a healthy retail outlet, and 75% repeat business would be the top end for a healthy service business. Retail outlets with less than 25% repeat business are probably not meeting their customer needs or more of them would be coming back. Service businesses with more than 75% repeat sales are probably losing their skills at generating new customers and run the risk of severe financial problems if they lose 1 or 2 major accounts. Any way you look at it, a very large part of your business should be coming from repeat customers.
The other factor you need to look at is that the cost of getting a new customer is much higher than the cost of keeping a customer that you already have. Marketing and advertising are expensive business.
Smart businesses invest in retaining customers. That's what customer support is all about. There is no better time to ensure repeat business than when your customers are feeling that they have no leverage. That is exactly when they appreciate your support the most, and will remember it as something that makes them want to come back.
In part 2 of this series we'll look at some practical management tips for customer service managers to get the business behind your team and your customers.
About The Author
Daryl Cowie has shared management tips with 1000s of people in over 30 countries around the world. His mission is to help you and your company turn business opportunities into business realities. Sign up for his free business management home study course at http://FreeManagementTips.com
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