Many Happy Returns

This story appears in the May 1998 issue of Startups. Subscribe »

What's the most important part of your business? It's not your product, your equipment or your marketing campaign. It's your customers--and it's up to you to keep them coming back.

One of the biggest mistakes any entrepreneur can make is taking customers for granted. The '90s has ushered in a new breed of customer--one with higher expectations than ever. "Today's consumer is less likely to tolerate poor service," warns Tim Schneider, co-owner of Soaring Eagle Enterprises Inc., a Las Vegas firm that specializes in customer-service training.

What does it take to satisfy customers today? It could be as simple as a smile. "Customers want to be greeted in a friendly manner," says Beth Hannley, owner of Catalyst Consulting Inc., a Mill Creek, Washington, company that specializes in customer-service training and leadership development.

To build rapport with customers, Hannley suggests using their names, becoming familiar with their needs and using the human touch--literally. "There are reports indicating that customer satisfaction increases when human touch is involved," she says. "Shake hands soon after you see the customer, or touch them on the arm or in some other way that's appropriate."

These days, it's not enough to meet customer expectations; you must exceed them, say the experts. Paul R. Timm, department head at Brigham Young University's Marriott School of Management in Provo, Utah, uses the term "equity theory" to teach clients how to exceed expectations.

"Human beings constantly go in and out of relationships," Timm explains. "Psychologically, as soon as we enter into a relationship, we begin to measure the relative fairness of that relationship. If we give something to the relationship--even something as simple as saying `hello'--and we don't get something of comparable value back, we start feeling psychological discomfort."

How can equity theory improve your customer service? "If you give more to the relationship than the customer expects, it creates psychological pressure for them to `rebalance' the relationship by giving something back," Timm says. "That may mean coming in more often or telling their friends about your business."

To exceed customer expectations, however, you have to know what those expectations are. At the most basic level, customers expect you to return phone calls in a timely manner, make deliveries as scheduled and treat their problems as if they were your own. To uncover additional expectations, Timm, author of several books on customer relations, including Customer Service: Career Success Through Customer Satisfaction (Prentice Hall, $37.33, 800-922-0579), suggests using surveys to get constant feedback. Surveys can be as simple as comment cards next to a cash register or a page sent out in monthly billing statements.

Through surveys, you'll learn it's often the little things that matter most in keeping customers loyal. For an auto shop, details could mean providing fresh coffee and comfortable chairs for waiting customers. For a food delivery service, provide plenty of napkins and plasticware with each order or guarantee delivery by a certain time.

Business owners sometimes fail to examine phone demeanor with the same scrutiny they apply to face-to-face communications. "Probably 80 percent to 85 percent of business is conducted over the phone today, and that's where we most often blow it," says Schneider. Do you treat phone calls as an interruption of your work . . . or as an opportunity to serve a customer? Customers can tell the difference. Make sure employees, too, are well-versed in proper phone etiquette.

"Service is not a policy, a procedure or a mechanical process; it's a feeling," says Schneider. "We need to be enthusiastic about our customers and recognize that the highest compliment customers can pay us is to come to our business."

What can you do to create customer loyalty? Whatever the customer wants. "You don't have to exceed customer expectations by some huge magnitude," says Timm. "Beat their expectations by just a little bit, and you'll start to create a very strong sense of customer loyalty."

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Patricia L. Fry is a freelance writer in Ojai, California.

Above And Beyond

How do you meet--and beat--customer expectations? Paul R. Timm, department head at Brigham Young University's Marriott School of Management, uses the a formula he calls "VISPAC," which stands for:

• Value: Give customers a little bit more value in products or service than they expected.

• Information: Provide information to help customers use your products or services. "For example," says Timm, "at some auto dealerships, salespeople show you each thing on the car and explain how it works, instead of just telling you to look at the owner's manual."

• Speed: Meet or exceed your customers' expectations of timeliness.

• Personality: Make sure your company projects a friendly image. Do you greet every customer? Is your store or office clean and inviting? Are your employees well-groomed and smiling?

• Add on: Give customers something extra. "This can be as simple as giving a free pair of socks with each pair of shoes sold," says Timm.

• Convenience: Make it easy for customers to do business with you. "Look around your business and think about what's inconvenient for your customers and how you can make it better," says Timm, who cites pizza delivery and quick-lube shops as two industries that have found innovative ways to offer customers the ultimate in convenience.

Contact Sources

Catalyst Consulting Inc., (425) 485-0351, bhannley@aol.com

Soaring Eagle Enterprises Inc., 3172 N. Rainbow Blvd., #411, Las Vegas, NV 89108, (702) 242-9080.