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"cover next page > title: author: publisher: isbn10 | asin: print isbn13: ebook isbn13: language: subject publication date: lcc: ddc: subject: The Arthur Andersen Guide to Talking With Your Customers : What They Will Tell You About Your Business (When You Ask the Right Questions) Wing, Michael J. Kaplan Publishing 1574100750 9781574100754 9780585374482 English Customer relations, Customer services, Consumer satisfaction, Motivation research (Marketing) , Market surveys. 1997 HF5415.5.W6 1997eb 658.8/12 Customer relations, Customer services, Consumer satisfaction, Motivation research (Marketing) , Market surveys. cover next page > < previous page page_i next page > Page i The Arthur Andersen Guide to Talking with Your Customers What They Will Tell You about Your Business* *When You Ask the Right Questions Michael J. Wing Arthur Andersen < previous page page_i next page > < previous page page_ii next page > Page ii This book is dedicated to Pam, Lindsay, Jacque and Brody, without whose love and support this endeavor could not have been undertaken. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Executive Editor: Cynthia A. Zigmund Managing Editor: Jack Kiburz Interior Design: Lucy Jenkins Cover Design: Salvatore Concialdi © 1993, 1997 by Dearborn Financial Publishing, Inc.® Published by Upstart Publishing Company, a division of Dearborn Publishing Group, Inc. All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without written permission from the publisher. Printed in the United States of America 98 99 10 9 8 7 6 5 4 3 Library of Congress Cataloging-in-Publication Data Wing, Michael J. The Arthur Andersen guide to talking with your customers : what they will tell you about your business (when you ask the right questions) / Michael J. Wing, Arthur Andersen LLP. p. cm. Rev. ed. of : Talking with your customers. © 1993 Includes index. ISBN 1-57410-075-0 1. Customer relations. 2. Customer services. 3. Consumer satisfaction. 4. Motivation research (Marketing) 5. Market surveys. I. Wing, Michael J. Talking with your customers. II. Arthur Andersen LLP. III. Title. HF5415.5.W6 1997 658.8'12dc21 97-7822 CIP Upstart books are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. For more information, please call the Special Sales Manager at 800-621-9621, ext. 4384, or write to Dearborn Financial Publishing, Inc., 155 N. Wacker Drive, Chicago, IL 60606-1719. < previous page page_ii next page > < previous page page_iii next page > Page iii Foreword The world is becoming increasingly competitive. Some have suggested that worldwide commerce is rapidly moving to commoditization, implying that virtually any product or service can be readily replaced by finding it elsewhere, whether domestically or internationally. The days of monopolistic enterprises are quickly fading into oblivion. Even utilities, long a bastion of monopolistic tendencies, will soon be in the midst of rigorous competition. As a result, the primary differentiating characteristic for companies is fast becoming the quality of service provided as perceived by the customer. It's no longer enough to offer customers good products or services at competitive prices. It takes total customer satisfaction to keep customers and companies performing at their best. Achieving a superior level of satisfaction requires the uniting of two of the most powerful forces in business today: employees and customers. Satisfied customers are loyal customers who purchase repeatedly from the company and recommend the company to others. In fact, we have found that repeat purchases from satisfied customers can account for up to 80 percent of company sales. Total customer satisfaction increases customer retention and employee satisfaction. The result can be a building of momentum that begins to drive up sales, drive down costs and increase profitability. To respond to one another. To align service delivery processes with specific customer needs. To convert the shortterm transaction into a long-term relationship. How does it start? With a course of action that is companywide, measurable and readily understandable. This book is a very helpful tool to help you and your firm take that course of action. Mike Wing brings considerable experience from running four different firms. All were in highly competitive industries in which success turned on making customer satisfaction a competitive advantage. Wing has the experience of a practitioner in the field and brings his insights into focus in this book. The book is designed in a manner that is readily understandable. It is intended to help you turn insight into action. It is a book that we have personally found to be helpful and insightful and trust that you will as well. Best wishes for success as you seek to improve customer service in your company in order to maximize customer satisfaction and organizational performance. JOSEPH P. O'LEARY ARTHUR ANDERSEN CHICAGO HOWARD BARRETT ARTHUR ANDERSEN LONDON < previous page page_iii next page > < previous page page_v next page > Page v Acknowledgments The author wishes to acknowledge the tremendous assistance provided by Patrick Hogan throughout the conception and editing process; the long hours contributed by Rod Woodard in typing the manuscript; and the encouragement of many "customers" desirous of such a book. < previous page page_v next page > < previous page page_vii next page > Page vii Contents Preface Chapter 1 How Do You Know How You're Doing Unless You Ask? xiii 1 2 Quality Service is a Competitive Necessity 6 Quality Service is an Ongoing Project 7 Notes on Using the Assessment 8 Introductory Organizational Assessment of Customer-service Activities Chapter 2 What Are Your Customers' Expectations? 13 14 The Expectation Gap 15 Communicating with Frontline Employees 16 Interaction between Management and Customers 16 The Need for a Strong Marketing Program 17 Customer-service Accountability 21 Notes on Using the Assessment 22 Handling Customer Expectations and Perceptions Chapter 3 What Do You Want to Know? 25 26 Purposeful Listening < previous page page_vii next page > < previous page page_viii next page > Page viii 26 Setting Objectives 43 Notes on Using the Assessment 44 Setting Objectives Assessment Chapter 4 Choosing the Best Survey Technique 47 48 Telephone Surveys 50 Mail Surveys 50 Face-to-Face Personal Interviews 51 Focus Groups 53 Mystery Shopping 53 Toll-free Numbers 54 Comment and Complaint Cards 54 Frontline Contact 54 Mutual Education 59 Notes on Using the Assessment 60 Assessment of Methodologies Chapter 5 What You Need to Know about Statistics 63 64 Validity 64 Bias 67 Sampling 69 Variables 71 Statistical Analysis 73 General Guidelines for Your Research Efforts 76 Notes on Using the Assessment 77 Statistics Assessment Chapter 6 Distribution, Collection and Analysis of Surveys 79 80 Survey Distribution 82 Survey Collection 83 Survey Analysis 84 Sharing Information with Stakeholders 85 Do It Yourself or Hire Out? 87 Notes on Using the Assessment 88 Distribution, Collection and Analysis Chapter 7 Are Your Assumptions Correct? 91 93 Management by Fact 93 Choosing a Target Market 94 Innovation and Improvement < previous page page_viii next page > < previous page page_ix next page > Page ix 94 Goals from the Customer 96 Notes on Using the Assessment 97 Assessment of Key Organizational Assumptions Chapter 8 EmployeesFrontline Ambassadors 99 100 Employees: The Critical Link 101 Employee Development 101 Employee Development Must Be Managed 102 A Common Beginning 103 Organizational Attitude 108 The Cost of Quality 110 Notes on Using the Assessment 111 Employee Assessment Chapter 9 How Do You Keep Your Customers? 113 116 The High Cost of Migration 116 Marketing: A Two-Part Process 117 The Moment of Truth 117 Obstacles to Superior Customer Service 120 How to Increase Customer Retention 123 If a Customer Leaves, Ask Why 125 Notes on Using the Assessment 126 Customer Retention Assessment Chapter 10 How Customers Can Help You Beat the Competition 129 130 The Purpose of Business 130 Product Life Cycle 131 Innovation or Imitation 132 The Importance of Timing 133 Differentiation 133 Decision-making Priorities 135 Notes on Using the Assessment 136 Marketing Reconnaissance Chapter 11 How Effective Are Your Marketing Efforts? 139 140 Define Your Message 141 Target Your Customer 141 Prepare Your People 142 Measuring Marketing Effectiveness 142 Promise and Deliver < previous page page_ix next page > < previous page page_x next page > Page x 143 Notes on Using the Assessment 144 Assessment of Marketing Efforts Chapter 12 Do You Say What You Mean to Say? 147 148 Personalize Your Communications 149 Good Customer Communications Start with Management 150 International Communications 151 Communications Assistance 156 Conclusion 157 Notes on Using the Assessment 158 Communications Assessment Chapter 13 Benchmarking: How Do You Measure up? 161 162 Competitive Benchmarking 167 Premier Benchmarking 172 Internal Benchmarking 174 Summary 175 Notes on Using the Assessment 176 Benchmark Assessment Chapter 14 Are You Investing Your Resources in the Right Places? 179 180 Markets 181 Customers and the Products or Services Offered 183 Operations, Facilities and Technology 183 Financial Allocation Decisions 191 Notes on Using the Assessment 192 Allocation of Resources Assessment Chapter 15 Planning Your Future 195 196 Prudent Planning 196 Strategic Planning 200 Notes on Using the Assessment 201 Strategic Planning Assessment < previous page page_x next page > < previous page page_xi next page > Page xi Chapter 16 The Internet: Modern Electronic Communication 203 205 Nonstop 24-Hour World Wide Web World 205 Customer Perspective 206 Elements to Consider 211 Notes on Using the Assessment 212 Internet Assessment Epilogue: A Call to Action Index 215 217 < previous page page_xi next page > < previous page page_xii next page > Page xii List of Figures 108 8.6 Employee Assessment of Customer Satisfaction Characteristics 114 9.1 Cost of Losing Customers 124 9.2 Sample Inquiry and Questionnaire for Lost Customers 134 10.1 Sample Employee Participation Card 150 12.1 Telephone Communication Checklist 151 12.2 In-Person Communication Checklist 152 12.3 Written Communication Checklist 152 12.4 Sample Telephone Script 153 12.5 Order Confirmation 154 12.6 Complaint Call Response 155 12.7 Potential Customer Visit 164 13.1 Competitive Benchmarking Worksheet 166 13.2 Sample Competitive Benchmarking Worksheet 168 13.3 Premier Benchmarking AssessmentProfessionalism 169 13.4 Premier Benchmarking AssessmentFrequency of Contact 170 13.5 Premier Benchmarking AssessmentOverall Customer Satisfaction 171 13.6 Premier Benchmarking AssessmentShipping/Delivery 172 13.7 Internal Benchmarking Worksheet 182 14.1 Measurement of Customer Awareness, Utilization and Interest in Products or Services 184 14.2 Market Developments Affecting Operations, Facilities and Technology 185 14.3 Six-Step Strategic Assessment of Allocation of Resources 186 14.4 Outline of the Six Steps in the Allocation of Resources Assessment 187 14.5 Return on Total Assets Formula 188 14.6 Return on Total Assets Worksheet 189 14.7 Break-Even Formula 190 14.8 Break-Even Analysis Worksheet 199 15.1 Ten Steps for Business Strategic Planning < previous page page_xii next page > < previous page page_xiii next page > Page xiii Preface All businesses need programs in place that will allow them to regularly ''talk" with their customers. There is no better or more efficient way to know how your firm is doing or how your products, services and employees are perceived in the marketplace than by asking your customers. The cost of not talking with your customers can be staggering. On average, two-thirds of customers that leave a firm to do business with another do so because of perceived indifferent attitudes of the owner, manager or employees. Only 4 percent of dissatisfied customers will take the time to complain to the firm; the vast majority leave quietly to share their dissatisfaction within their spheres of influence. Ironically, the average firm in America spends six times more money on efforts to attract new customers than it does on efforts designed to nurture and keep its existing customers. It is up to you to ask your customers on a regular basis how you are doing, how you can serve them better, what they perceive are your strengths and weaknesses, and who they regard as your competition and why. The goal of "talking" with your customers is for you to formulate a strategy for keeping your hard-earned customers. During the early part of my career, I became increasingly frustrated with the lack of effective resources for measuring and managing customer satisfaction. As a result, I developed high quality customized instruments for just such a purpose. This led to the derivation of customized instruments for conducting widespread customer satisfaction < previous page page_xiii next page > < previous page page_xiv next page > Page xiv assessments across hundreds of different industries. As a senior manager with Arthur Andersen, I design customer satisfaction assessments, conduct comprehensive analyses and provide other management-related services. Over the years I have worked with a broad spectrum of businesses and associations, both domestic and international. I have seen firsthand the problems caused by poor customer service as well as the amazing results superior customer service can produce. Few books available on customer service contain the hands-on advice that you will find in this book. I have included numerous worksheets and time-tested surveys, including the following: Self-assessment surveys that will ensure an ongoing evaluation of your customer-service performance Sample surveys that can serve as models for your own efforts Sample letters covering a variety of situations that may impact customer service In The Arthur Andersen Guide to Talking with Your Customers, I have provided the tools that will help you make customer satisfaction an integral component of your business strategy. Asking the right questions will yield information that is useful in every aspect of your businessmarketing, finance, employee management and the sales process, to name a few. Small businesses have traditionally focused on customer service as a competitive advantage. Lacking the bureaucratic layers of management of larger corporations, small companies often have the flexibility to be more responsive to their customers. However, the same customer-service concepts and tools are available to an organization of any size, whether in the public or private sector. In today's competitive economy, large businesses are placing more resources in formal customer-service programs. Small businesses must be prepared to meet the challenge. The resources available to small businesses are limited, and these companies can ill-afford to spend their time, money and energy in efforts not clearly focused on their customers' needs. Providing superior customer service and creating customer satisfaction will continue to be the crucial elements in determining which organizations will "win" and which will "lose." It is my sincere hope that this book will help move your business into the "win" column. < previous page page_xiv next page > < previous page page_1 next page > Page 1 Chapter 1 How Do You Know How You're Doing Unless You Ask? Sam represents the third generation involved in running the family-owned businessa specialty toy store located in a large midwestern city. When asked how he knows how well the store is doing with respect to its customers, Sam wryly replies, "I have been in or around this store for most of my 60 years. I've seen a lot of kids grow up and bring their kids into the store. I know my customers all too well." When pressed, Sam acknowledges that revenues for the store have been flat over the past several years. Reluctantly, he agrees to conduct a customer satisfaction assessment. What he finds is enlightening: Customers like his store for tradition's sake but purchase most of their toys elsewhere because of competitive prices; the demographics of his primary customer base have changed dramatically; and the hours of operation and promotions offered are largely ineffective. Upon receiving this information and suggestions for improvement, Sam makes some modifications. Within months, the store's monthly revenues as well as profits increase. Sam is quoted as saying that he only wishes he asked customers how the store was doing earlierhe plans on asking on a regular basis from now on. < previous page page_1 next page > < previous page page_2 next page > Page 2 Customer satisfaction is one of those topics that everyone claims to know something about: from the company executive who just announced a comprehensive customer-service program, to the employee in receipt of the latest management customer initiative, to the customer who beats a path to the service provider that has an excellent product or service at a reasonable price, and treats him or her in an important manner. Many customers are growing weary of the search for such organizations. In his book The Marketing Imagination, Theodore Levitt describes the importance of paying attention to your customers. The natural tendencies of relationships, whether in marriage or in business, is entropy, meaning the erosion or deterioration of sensitivity and attentiveness. A healthy relationship maintains, and preferably expands, the equity and the possibilities that were created during courtship. A healthy relationship requires a conscious and constant fight against the forces of entropy. It becomes important for the business person to regularly and seriously ask, "How are we doing?" "Is the relationship improving or deteriorating?" "Are we neglecting anything?" The irony associated with customer satisfaction in today's economy is profound. No business intentionally decides to do a bad job, few ever say, "We don't believe in customer service. We try to do a poor job. We are going to go out today, lose customers and make them dissatisfied." Quite the contrary, if asked, most would probably indicate that they or their company are trying to please customers to the best of their ability. Quality Service is a Competitive Necessity The impact of customer dissatisfaction can be staggering. For example, if an organization were able to handle 99.9 percent of transactions accurately, there might still be plenty of room for error. Consider the following: 99.9 percent of accurate transactions might be 22,000 checks deducted from an incorrect account every hour. 99.9 percent of accurate handling might mean the U.S. Postal Service loses more than 17,000 pieces of mail every hour. 99.9 percent accuracy might mean more than 3,700 incorrectly filled prescriptions each day. < previous page page_2 next page > < previous page page_3 next page > Page 3 The purpose of an enterprise is to gain and keep customers. It is self-evident that without customers in sufficient and steady numbers, there is no business. And no business can function effectively without a clear view of what prospective customers want. An understanding of competition, perception, product, pricing and relevance of strategies and programs may enable a business to keep its customers but the key is customer service. Whether you are buried in research and develop..."

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