The Case For Moving From Service To Sales
Over the past months we’ve received a lot of comments and questions about our April 27 blog Stop Trying To Delight Your Customers. Conventional wisdom holds that customer delight drives loyalty, and to delight customers you have to meet and exceed their expectations. But we reported on an article Stop Trying to Delight Your Customers1 which suggested that there are other, more effective ways to increase loyalty than delighting customers.
We’re indebted to our colleague John Goodman for shedding additional light on this topic. As Vice Chairman of TARP, John is the customer service guru who is behind nearly all the cutting edge quantitative research on customer loyalty. If you have read any article which cites data relating to customer loyalty, chances are that there is a TARP study behind it.
John was kind enough to share a number of resources, including his articles Grow Your Top Line With Service2 and Marketing Myths and Service Slips3.
Here are some key takeaways:
There’s nothing “wrong” with trying to delight customers. The real question is cost-effectiveness. How much does it cost to exceed the customer’s expectations, and what is the return in increased customer loyalty?
It turns out – not surprisingly – that it may be costly and time-consuming to delight a customer. And what’s the upside? TARP’s research found that it’s a 12-14% increase in the likelihood that the customer will recommend your company to someone else.
Meanwhile, there were four relatively simple actions that turn out to be twice as effective and increase positive word-of-mouth by 26-32%. They are:
- Interacting briefly with the customer about something other than the basic transaction to create a personal connection (26%).
- Telling the customer about a new product or service that fills a genuine need (30%).
- Providing consistently good service (30%).
- Proactively educating the customer about how to avoid problems or get more out of a product or service (32%).
These are remarkable findings! They suggest a simple and cost-effective two-step strategy your business can use to increase customer loyalty and generate positive word-of-mouth referrals and recommendations:
Step 1: Take a personal interest in your customers and make sure you provide them with consistently good service.
Step 2: Proactively make suggestions and recommendations based on customer needs. In other words, move beyond a narrow and reactive view of “service” to a broader and more proactive approach to “sales AND service.”
Transform Your Organization From Service To Sales!
In today’s challenging business climate it’s more important than ever for your business to increase customer loyalty and generate positive referrals and recommendations. Isn’t it time for your front-line team to move from a narrow, reactive focus on service to a broader and more proactive focus on sales AND service?
The Elkind Group specializes in helping organizations transition from service to sales. We are always collecting best practices. And we invite you to share what you are doing in your organization to move your team to take a broader and more proactive approach to service. Please let us know – we’re looking forward to hearing from you!
References:
1 Matthew Dixon, Karen Freeman, and Nicholas Toman. Harvard Business Review July-August, 2010.
2 John Goodman. Journal of the American Management Association, Volume 8 Number 3, Summer/Fall 2009.
3 John Goodman and Dennis Gonier, TARP white paper, April 2007.