Chapter 1 Know Why Service Matters Chapter One Chapter 1 Know Why Service Matters

Healthy relationships: Key to business and personal success Succeed by attracting, keeping loyal customers “Service economy” not as it should be

What Happened to the Service Economy? Ignoring customers Unmet promises Incomprehensible customer service people Jargon instead of answers

Ockham’s razor Wal-Mart vs. K-mart

Satisfied customers lead to success K-mart sales about $50 Billion/yr Wal-Mart sales about $400 Billion/yr But they sell the same stuff for about the same prices from the same type stores in the same locations . . . Same, same, same . . . DIFFERENT

A “customer” is someone with whom we exchange value Money for a product or service Work for wages Time as a volunteer

No one succeeds without loyal customers External customers: transactions involving an exchange of money Internal customers: employees and co-workers

Relationships with customers can become partnerships Ongoing relationships Service intimacy Generosity, trust Share joint purpose Speak truth with compassion and care Pursue equality with grace

Positive word of mouth gets and keeps customers Cost of getting a new customer A friends’ advice or recommendation Turbocharge with email, blogs, or other electronic communication “word of mouse”

How do you calculate the cost of a lost customer? 10-30% loss of customers per year Customer retention programs= profits jump 25-100% Ripple effects

What are the numbers behind an unhappy customer? An upset customer tells 10-20 other people These tell five more The total number affected by one poor experience = 50 to 100!

How much does it cost to replace the unhappy customer? Five to six times more than keeping existing one About $118 to get a new customer About $19 to keep one

Some key change in the diverse nature of customers Most diverse customer base ever Wider age range of employees and customers More 60+ customers Broader globalization means customers from all around the world More work/life balance

Few companies fully back their promise with strategy that Makes customer satisfaction/loyalty key strategic goal Trains all employees to use behaviors that make customer feel important Translates slogans into actions that convey caring to customers

Your number one task, regardless of your job title, will always be to attract, satisfy, and preserve loyal customers.