As I posted on my Facebook page the internet in the area went down after a storm. Something techie thing broke down and the part had to be flown in during a holiday. Stuff like that happens and sometimes things are just beyond one’s control. What isn’t beyond any business’ control however, is to communicate to your customers about what is going on. Even a “heck if I know when the internet is going to be back on” is communication. It beats “it will be on within the hour” and it then lasting another 24 hours before it is back up.
Running a service business is all about managing customers’ expectations. Doing this right and as a result, offer great service, does not only benefit your customer, but also your business and you as a business owner.
Research shows that companies that offer a superior level of service, achieve higher than normal market share growth, can realize a higher price than their competitors and have higher profits. This applies to businesses that sell their services and businesses that sell products that come with services. However, there are 5 common mistakes that businesses make when it comes to delivering good service and managing expectations.
Mistake #1: Not realizing that businesses merely exist by the grace of their customers
The most common mistake is not seeing the customer for what he or she is: the customer. In the past businesses were looking to sell their products, instead of trying to solve their customers’ problems. Unbelievable so, some businesses still stick to this product-centered – by now Neanderthal – philosophy. Such businesses distance themselves so far from their customer that they do not recognize them when they deal with one. Sometimes they even view customers as a nuisance. Very often employees do not even realize that if it weren’t for paying customers, they would not be paid their salaries.
Solve this problem by changing the culture of the business. It is up to the owner to show by example and communicate what they expect of their employees. This means managing for expected behavior, but also dealing with behavior that is inappropriate.
Mistake #2: Not knowing what customers expect
This is another biggie. How can anyone be expected to deliver good service if the business does not know what it is that its customers expect. Very often, the business has no insight into what the customer wants, simply because they have not asked. Traditionally many businesses have been broadcasting to their customers instead of creating a dialogue. Without dialogue there really is no relationship between business and customer. This all results from the attitude underlying mistake #1. Social media bring with it the opportunity for dialogue but old patterns are hard to change.
Sometimes the business has knowledge of what the customers want, but the knowledge resides and remains with the employees who are in contact with the customer. If communication within the business malfunctions, or if the business is just too big, knowledge does not travel to where it should and is needed.
There are different ways to find out what customers expect from a business. Market research could be instrumental in getting the information that is needed, as is focusing on building a relationship with the customer. Unless you are in the business of selling once-in-a-lifetime products or services, you want your customer to come back for more. Therefore, communication is key, but underlying is the culture of the business once again. If building relationships is not in the business’s DNA, it is just a trick, and a heartfelt inauthentic one at that. Customers sense that and if they do, they will not come back. The business owner leading for quality service is essential.
Mistake #3: Not having the right business processes and quality standards
Mistake #3 builds upon the first two. If there is no customer -led culture within the business and the business does not communicate with its customers, designing the service process and setting quality standards, becomes a game of chance. One can then only guess at their customers’ expectations.
Leadership is responsible for designing processes and standards and if the problem lies with the business owner, it is advisable to leave it to a manager. If the problem lies with the manager, evaluate if he or she is the right person for the job. Involving the rest of the business is essential also. Employees often have good ideas about what customers want or how things can be improved. Involving employees leads to their empowerment and higher motivation.
Mistake #4: Not delivering to the agreed service standards
Everything can be in place for good service, but things can still go wrong. The most important one is not having the right employee for the job. If an employee does not fit within the company culture of service, he or she can never live up to the expectations customers hold.
Sometimes businesses depend on partners and intermediaries in helping delivering the service. Among them there may be conflicting goals, cultures, or sometimes different standards that lead to differences in delivering quality.
Sharp made the best microwave ever. I had one. After about 20 years of use, one main part had to be replaced. Multinational Sharp redirected customers to a national repair and maintenance service, which turned out to be a non-Sharp company to which all maintenance had been outsourced. The service at this company was awful. They hardly answered the phone, were extremely rude when they did, and when asked if they could pick up broken equipment outside of office hours, they said they could not because then every customer would want that. A partner company in one phone call demolished twenty years of wonderful Sharp microwave experience.
In services, great employees are the most important capital. If the business’s recruitment is subpar, it will not attract the right people. When there are no good employee evaluation systems in place, employees will not know if and how they should do their job differently. Delegating responsibility to employees and empowering them to find solutions to customers’ problems, contributes to better service delivery.
Business partners should be complimentary to the business they partner with. Not only in services, but also in culture and quality standards. It does not mean that culture has to be identical, but it should match. If it does not, it hurts the business’s brand and reputation.
Mistake #5: Not matching performance to promises
All the bases are covered and there is still one hurdle to overcome: mistake #5. Overpromising to customers in external communication results in higher expectations than the business has the ability to fulfill.
Overpromising often is the result of not integrating external communication with the process of service delivery. Sometimes there is a disconnect between the communication department and other departments, be it in procedures and policies or be it in culture. Sometimes it is just a case of the right hand not knowing what the left hand is doing.
Having a service businesses means managing the big picture as well as the details. It means knowing what customers want and knowing how to empower employees to deliver great service. It means having a culture where everyone is on the same page and knows what is expected. It means doing business, every day, from a shared set of principles or guidelines.
Happy customers make great ambassadors. It is great for word-of-mouth, which is the cheapest and most effective advertising any business can have. This word-of-mouth is the same reason why social media can be so powerful, but also so devastating, if you do not live up to your customers expectations.
By Pepita Bos