I jumped on the Internet to do a little research for this article and the first headline I read was a compelling quote from the CEO of a major retailer that stated, “Seismic changes in consumer behavior have created the most difficult climate we've ever seen.” It just got worse from there.
Based on my work with dozens of companies both inside and out in the marine industry, there is a very clear picture emerging of the changing expectations of today’s American consumers. Whether they are buying a new pair of luxury shoes, a new car, or a new sailboat, when people decide to spend discretionary income, the way they approach these purchases is now driven by three powerful factors:
1. Quality. If someone is going to reach deep in his or her pocket for a major purchase today, they demand the absolute highest quality possible for the money they invest. They want products that are extremely well-built, reliable and will hold their value for a long time.
2. Knowledge. Today’s consumer is more educated than any other consumer group in history. They often come to purchase knowing an incredible amount of information about your product, various competitive offerings and have a solid handle on numerous comparative pricing and financing options.
3. Service. Because today’s consumers are so extremely well educated, they understand that they can get the exact same product you offer, from a variety of different sources, at about the same or even a lower price. Therefore, they view “Customized Customer Service” as a key differentiator in their buying decision.
So, if these are the three major consumer behavior factors impacting the marine market,
what must you do to address each of them?
As to Quality, the answer is exceedingly clear: now is the time to build and deliver the highest quality products you have ever put into the market. Period. I jumped up and down on this point with several of my clients; a few listened and have seen their market share remain solid and increase. A few went in the other direction and looked for ways to cut every possible cost in production (thereby lowering quality - without lowering prices) and they have lost significant market share or are no longer in business. When discretionary income is limited, consumers are exceedingly focused on buying only high-quality, long-lasting products.
On the second factor, Knowledge, the course of action is also clear: you and your staff must be true “experts” on all your products, services, pricing, options … and know the same information about your direct competitors. To succeed here, the goal is to be more knowledgeable than the best prepared customer that walks through your door. Believe me, this is challenging.
Which brings me to the last factor, and the one that I believe is absolutely the most important: Service. It is my firm belief that whatever company does the best job of listening to the needs, wants and concerns of the customer … and then builds their entire business around meeting those needs better than any other competitor … this company will dominate the marketplace.
DOUBLE YOUR PROFITS!
To make my point, let me share some numbers. I teach a very intense class on how to deliver consistently superior customer service and did a huge amount of research to uncover the financial implications of improving customer service levels. I won't torment you with a bunch of statistics, graphs and charts but here is what all of the research shows: creating a culture of engaged employees who consistently deliver superior customer service can drive as much as an 85-104% increase in your profitability. That's right, delivering great customer service can literally double your profits! I have also conducted a number of surveys for my clients in which respondents said they would willingly pay a 15 to 25% price premium to buy the exact same product … IF they received truly outstanding service. On the other hand, poor or inconsistent customer service is just about the surest way there is to chase customers away and doom your business to failure.
GREAT SERVICE … SURVEY SAYS …
Although what constitutes "superior customer service" is somewhat unique to each individual customer, a broad array of national surveys demonstrates that the most important customer expectations for great service are as follows:
- Reliability: The ability to provide what was promised, on time, dependably and accurately.
- Professionalism: Highly knowledgeable, ethical and honest employees who instill a sense of trust and confidence in the customer.
- Empathy: Genuine care and concern for the complete satisfaction of the customer.
- Responsiveness: Not just delivering prompt service, but being proactive in anticipating the needs and concerns of the customer.
- Ambience: The design and comfort of the physical facilities, cleanliness of the facilities and equipment, and appearance of the personnel.
While this list may not appear particularly daunting, the key is to ensure that every single employee in your organization embodies it every single time they interact with a customer. This is the monumental challenge! Although there are many factors that go into building an organization that delivers fantastic customer service, I want to share with you what I feel is one of most important drivers of service excellence; Moments of Truth.
MOMENTS OF TRUTH
The process of delivering any product or service to a customer typically includes multiple steps. Although every step is important, there are few critical "Moments of Truth" that carry significantly more weight in the customer's mind. Great service providers identify these critical touchpoints and are obsessive about creating systems and processes to ensure that they are delivered flawlessly every single time. For example, I made a list of every single touchpoint I could think of in the process of a customer going out to dine at a restaurant. I won't give you the complete list (I identified 157 touchpoints) but here are just a few to give you a flavor for what I'm talking about:
- Signage is clear, access to parking lot is convenient, and parking spots are wide enough for large cars and trucks.
- Parking lot is clean, landscaping is healthy and attractive, and the entrance is well lit and safe.
- Immediately upon entering, facilities are spotless, ambience is warm and relaxing, music is at an appropriate level.
- Hostess greets patrons with a warm smile as they approach the reservations desk and welcomes them to the restaurant.
- Hostess offers to take jackets, determines number of people in party, and inquires to see if they have a reservation or a special seating request.
- Hostess determines approximate wait for table, informs guests of wait time, and offers to bring beverages while they wait for their table.
- Beverage order is correct; drinks are mixed appropriately and served in an attractive manner.
Okay, we've just covered the first two minutes of a two-hour dining experience. As you can see, from pulling into the parking lot to driving away post dinner, there are dozens of touchpoints that add up to either a positive or negative dining experience. However, out of all those various touchpoints, there are a few critical Moments of Truth that MUST go perfectly in order for the customer to be fully satisfied. For a restaurant those critical touchpoints include:
- Food quality
- Service quality
You can be spectacular on all of the other touchpoints, but if you don't nail these four, there is no way to create loyal, engaged, highly satisfied customers. For example:
- Really clean restaurant, pretty good food, okay service, outlandishly high prices = no game.
- Super high food quality, very good service, reasonable price, cockroaches walking across the floor = out of business.
- Very clean restaurant, highly attentive waiters, very reasonable price, crappy food = empty restaurant.
The goal is to identify the short list of your company's key Moments of Truth -- your most critical customer touchpoints -- and design processes and systems to ensure they are done absolutely flawlessly each and every time. The aim here is to make it as easy as possible for your people to provide stunning service by removing opportunities for mistakes or failures. Through checklists, standard operating procedures, computer systems and regular training programs, you define exactly what "superior customer service" looks like in your business and then build a strategic, well thought-out system to make sure that your team consistently delivers it.
Let’s face it, times are tough and it does not look like they’re going to get significantly better any time soon. Consumers are more demanding than ever before. If you want your business to thrive, it is essential that you offer the highest quality products and services, delivered by extremely knowledgeable people who go above and beyond to deliver best customer service possible.
If you can accomplish these deliverables consistently, there is a very good chance you will enjoy a growing number of highly satisfied, loyal and engaged customers who become enthusiastic promoters of your business. And if that is not the foundation for business success, I do not know what is!
"Making the very complex...awesomely simple” is John Spence’s motto and mission. A leading authority in the areas of Strategic Thinking, High-Performance Teams, Advanced Leadership Development, and Delivering Consistently Superior Customer Service, Spence is a leading executive educator, author and professional speaker who has earned recognition as a Top CEO under the age of 40 in FL and Inc. Magazine’s Zinco Online “up and coming young business leaders.”
For the past 17 years, Spence has presented workshops, speeches and executive coaching to more than 300 organizations worldwide including Microsoft, IBM, GE, Abbott, Merrill Lynch, AT&T, Verizon, Qualcomm, State Farm, and dozens of private companies, government offices and not-for-profits. He has also served as a guest lecturer at over 90 colleges and universities across the United States including Harvard, Rutgers, Brown, Stanford and the Wharton School of Business at the University of Pennsylvania. He has also served as “Executive in Residence” for the University of Central Florida’s Technology Incubator; as a Special Advisor to the Rawls College of Business at Texas Tech University; as a lead instructor for the University of North Florida’s Executive Education division; on the Board of Directors for the University of Florida’s Center for Entrepreneurship & Innovation; as an advisor to the University of Florida’s Leadership Development Institute; and as a senior instructor at the Cornell University Leadership Development School.
His work as a business advisor and executive educator has taken him on assignments to Hong Kong, Japan, Germany, Austria, Mexico, Latin America, the Bahamas and Canada. For more information, visit www.johnspence.com