5 myths of customer service

In an article by the same name, John Goodman, Vice President of TARP Worldwide,  discusses 5 common myths retailers allow themselves to believe, myths that can hurt your business.  The following is an excerpt from the article.

Myth 1: Complaints and returns are going down so we are doing really well.
Fact: No news is not good news. There is dissatisfaction even if you are not hearing about it.

What looks like the good news may be the bad news – your customers may have stopped complaining because they have given up on you.

Action: Vigorously track and research complaint rates. If complaints go down, check to see if accessibility has been reduced. Aggressively solicit complaints because every complaint is information you need.

Myth 2: Price is the name of the game to expand share and profitability.
Fact: Great service enables you to deliver extra value, charge a higher price, and raise profits.

Price is the primary driver for product selection for only one-third of customers. The rest (that would be two-thirds) will pay a premium for higher quality and service.

Action: Prevent problems and unpleasant surprises for customers.

Myth 3: The key to great service is getting the frontline to follow and enforce our policies.
Reality: Policy and process problems related to products are costing you two to four times as much revenue as staff sales behavior and policy adherence.

This myth is really way, way off base. Usually only 20-30 percent of dissatisfaction comes from frontline staff failures.

Action: Ask your frontline reps what issues they regularly encounter but cannot fix. Modify the policy and process issues in light of the revenue damage.

Myth 4: Many customers are crooks and you need a rigorous return policy, like getting receipts.
Fact: 98 percent of customers are honest and, by running them through the gauntlet to catch the 2 percent, you are doing serious damage.

Action: Encourage employees to say yes as often as possible and to view each transaction as an opportunity to either drive the customer away or to retain the customer.

Myth 5: Out of stocks and discontinued items are ok – customers understand and expect this.
Fact: Customers do not understand or accept disappointment.

Smart retailers calculate the cost of inventory against not only a lost sale but lost future revenue due to disappointment.

Action: Avoid disappointing customers and rethink the long-term revenue implications of any policy that is creating disappointment.

To read the entire article on The Retail Customer Experience, click here.

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About Arthur De Gennaro

My friends call me Art. Welcome to my blog. In this space you’ll find information and comments on the ophthalmology world, the optical industry, the hearing industry and medical practice management. My intent is to provide information you can use to improve your business and your own performance. Please visit often and feel free to join the discussions by leaving comments.

You can learn more about me and my consulting company, Arthur De Gennaro & Associates, LLC by visiting my web site www.adegennaro.com

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September 2009

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