Seven Steps to Building Better Customer Relationships

by Richard F. Gerson, Ph.D, President of Gerson Goodson www.richgerson.com
Featured Article by Richard F. Gerson

Much is being written today about the importance of building customer relationships and maintaining customer loyalty. Youíve seen articles on this subject in numerous trade magazines, on websites and in the popular press.

There are also dozens of books being published on the subject. This aspect of business operations is so important that programs on increasing or maximizing customer retention are among the best attended at industry conventions.

While customer retention is critical to business success, we must realize that there is more to building and cementing a customer relationship than just engaging in customer-centric behaviors.

Because of the education and sophistication of todayís customer, it takes more than newsletters, special programs, e-mails, self-service and cards to keep customers happy and loyal. It also takes more than preferred discounts, high technology and other similar approaches.

CSRs (customer service reps) are uniquely positioned within a business to help that company build secure and long-lasting customer relationships. There is usually no other department or person (except maybe sales) that has as much contact with customers as often as the CSR.

When reps take the time to serve and satisfy customers who call in, there is often a measurable increase in repeat business. Conversely, when reps treat the caller or customer as if it was just a transaction to be completed in a certain amount of time, satisfaction decreases, loyalty suffers, and repurchase behavior declines.

This article will show you how to develop the appropriate behaviors in your CSR staff to increase the psychological ties that bind customers to your business. Customers who donít like the way they are treated can easily switch businesses or vendors, regardless of financial costs associated with the switch.

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when the psychological costs of switching are greater than the financial costs (meaning the customer is emotionally tied to your business), then there is less likelihood that a switch will occur.

What this means is that your CSRs must do everything possible on each contact to ensure that the emotional state of the caller or visiting customer is satisfied. When you bind your customer emotionally (mentally) in addition to physically (owning the product or service), you create a bond with that customer. CSRs are the catalysts for creating this emotional and psychological bond.


Seven ways your CSRs
can build customer relationships

1. Make certain CSRs constantly
gather accurate and current information about customers. This is critical in that customers want to be more than a number. They want to be appreciated as individuals and treated with respect. They want you to know about them; what they need, want and expect from you.

On every incoming call or visit, CSRs should take a moment to update the customerís file. The time that you gather this information during the call should be left up to the CSRs discretion. If the customer calls in and is upset, the CSR should let them get things off their chest before asking for updated information.

If the customer calls and is using a normal tone of voice, the CSR may want to get the new information up front. They should also make a positive comment on the most recent visit (this information is already in your customer relationship management system) and make sure the customer is still satisfied with that outcome. And, they must thank the customer for previously purchasing, calling or coming in to use the business.










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2. Product knowledge is crucial to successful relationship building. Your CSRs must know your businessís products, programs and service offerings inside and out. Thatís not to say they must be technical experts regarding the intricate workings of the product, service or high-tech equipment, although this helps, but they must be familiar with what everyone in the business does, how everything in the business works and how a customer is supposed to use it.

The CSRs must be products of the product. They must use the product on a regular basis themselves. They must communicate with the entire staff so they are constantly informed about improvements in the product. They must also learn how the staff uses and feels about the product. Then, they can combine this knowledge with their own plus what they gather from customers and improve the way they work with customers. This is the only way that they can truly understand the emotional makeup of the customer who calls or comes in.

A customer does not want to hear that they have to be transferred to someone else because the CSR answering the call doesnít know what the customer is talking about. It only takes one or two of these instances and the customer is likely to go elsewhere. So, while you train your CSRs on how to use the phone system, the computer system, the software and how to speak to customers, make certain you train them on what you sold to your customers.


3. Invest time to learn about customers.
Get to know what they need, the purpose of the call, and the hidden agendas or purposes within the call. The same holds true for each customer visit, whether itís for a new purchase, to return a previous purchase or to discuss a situation with the owner or manager. In many call center settings, CSRs are on a production model related to their performance. They must handle all the incoming calls within a certain amount of time.

They must answer customersí questions and then make specific dispositions of these calls. Their effectiveness is often evaluated on how many of these activities they complete instead of how well they are serving the customer (quantity vs quality). In lieu of this, I recommend that you first consider the quality of the customer contact. Let the CSRs stay on the phone as long as is necessary to help the customer become satisfied.

When the completed call has a satisfied customer on the other end of it, the CSRs performance should be rewarded in a similar manner as if they were meeting a production or sales goal. The same holds true when the CSR does a great job in a face-to-face encounter. Remember that behaviors that get rewarded get repeated. So, reward CSR behaviors that serve the customer well, that satisfy the customer, and that help to build those long-term customer relationships.

4. Provide value to customers on every contact. Whenever a customer calls, whether it is to complain, get information from your CSR, or make another purchase, give them something of value. This does not have to be a monetary reward for doing business with you. Itís even better if the value is more perceptual or psychological. This will have more meaning to them. And, always remember to have CSRs say thank you.

5. Establish a win-win partnership for service. Train your CSRs to work with the customers so that the success of the call or visit is dependent upon a collaborative effort. When the CSR resolves the problem for the customer, and there is no involvement on the customerís part, you only get half the result you should have gotten.

Train your CSRs to work through the problem or situation with the customer and, together, they should come up with the answer. Customers who perceive that their CSR (and the entire business) wants to work with them and cooperate to give him or her what they want, will spend more time and money with that business. That means more renewals and lower attrition rates.


6. Reward customer loyalty. How you do this is up to you. Whatever you do, make sure the reward is perceived to be of high value by the customer. Again, it does not have to be financial to be valuable. My book, Beyond Customer Service: Keeping Customers for Life, has descriptions of various loyalty reward programs you can implement in your business.

One customer reward program we developed for a client involved assigning specific CSRs to certain customers so that when the customers called or came in, needed help or had a problem that needed to be resolved, they asked for that person. Even though anyone could have helped them, customers felt they now had their own personal CSR.

This made the customer feel very important and kept them involved with the business for an extended period of time. (This was a fairly small business so assignments could be made. This concept may not be feasible in larger companies.)


7. Communicate regularly with customers. CSRs should be very proactive in their customer service. While most CICs and businesses are reactive with regards to customer service, and they wait for customers to call or come in, you can make your business more proactive and have the CSRs call customers just to see how they are doing. Customers will perceive this as a very caring act on your businessís part and this will strengthen the psychological relationship they have with your business.

Some other benefits

The most important thing in business right now is to attract and retain the most profitable customers for your business. Your CSRs are the customerís first contact with your business each time they call or come in.

By training your CSRs to be more than greeters, order takers or information gatherers, you can achieve higher retention rates, increased referrals because customers like your businessís friendly and helpful atmosphere, and higher customer satisfaction ratings. All this then translates into greater customer loyalty and retention.

Using CRM to increase retention

There are two primary co-issues in business today. They are how to attract and retain your most profitable customers, and how to recruit and retain your most productive employees. While customer retention pays the bills, employee retention is as important as customer retention when it comes to making a business successful.

With turnover rates increasing in both arenas, and the cost of replacing an employee now equalling or exceeding the cost of acquiring a new customer, businesses must use their CRM processes in a dual retention effort.

Here are some suggestions on how to use CRM, and what I call ERM (Employee Relationship Management) to attract and retain the best customers and the best employees. Please notice that nothing is said here about using the latest technology, although computerization may help the process. What we are talking about with this concept is the softer side of C/ERM.

Recruit with Integrity: Deliver what you promise

Whether you are dealing with customers or employees, the retention process begins with the recruitment process. What you say and do while you are trying to attract customers and employees will have a definite effect on how loyal they become and how long they stay with you. It is imperative that the promises you make are the ones you deliver on.

Years ago, businesses were taught to underpromise and overdeliver as a way to manage expectations and provide great customer service. That behavior may still work today, but it is more important to deliver exactly what you promise.

Too much fluctuation between promises and deliveries will be perceived by customers and employees as attempts at manipulation. Overcome this with integrity. Be honest in all your dealings with customers and employees and they will reward you with loyalty.


Create a customer-based culture

Let your customers and employees know that the company is behind them 1000%. Focus on doing what is best for them and they will, in turn, reward your business with their loyalty. Customers will purchase more from you more often.

You will achieve a greater share of their wallets. Employees will reward you with greater productivity and longer-term employment.

This will reduce your recruitment, training and ramping-up costs for new employees. And, your customers will be more appreciative because they will be dealing with the same employees over time. With both customers and employees, the bottom line is to show them you care.

Individualize reward and recognition programs

Although one size doesnít fit all, too many businesses are mired in the muck of a standardized loyalty rewards program. This program was designed by someone, somewhere, and it is supposed to motivate and incentives employees to perform well and customers to make additional purchases.

Unfortunately, cookie-cutter reward and recognition programs only work for a few people some of the time, and the only reason they work is because they are exactly what those people want.

The reasons these programs donít work for others are because the rewards and recognitions are so far removed from what they truly want, and they quite often see through the programs as simple manipulations to influence behavior. The lesson here is to ask customers and employees what they want in the way of rewards and recognition.

You may be surprised to receive answers other than money. However they respond, make sure you input the data into your CRM system so you can implement the appropriate programs for the respective employees and customers.

Professional development and Ďpathingí

Most companies agree that it is important to provide professional development programs for their employees, as well as visible career paths. They even track these programs in training management or HR software.

However, companies that provide professional development opportunities for their customers go a long way to cementing those relationships and creating customer loyalty. Hold seminars and educational programs for your customers. Teach them how to perform better in their business. The pathing concept can also take it a step further by creating service paths for customers.

Those customers who spend the most money with you and who have been with you the longest should receive a different level or path of service. This tiered approach makes customers feel special and it also motivates other customers to achieve these higher levels of service.

Longevity and loyalty

Hereís a radical suggestion that will work with both employees and customers. Instead of trying to constantly recruit new employees and develop new business relationships, why not find out what makes your loyal and long-term people stay with you. Then, give them more of what they want so they will stay loyal longer.

Recognize and reward longevity and loyalty for employees the same way you would for customers. In fact, treat all employees as the primary customers they truly are. Your appreciation of them will be returned by increases in retention. We already know that it takes up to five times more money to acquire a new customer than to get a current customer to make another purchase, and we can extend this statistic to employees.

This should motivate everyone to work to keep their employees and customers. Similarly, if youíre going to develop special offers or loyalty programs to attract new customers, think about giving those special offers to your long-term customers instead of the new ones you are trying to attract.

Reward the loyalty of the few who have stayed with you and they will bring you more business than you can imagine. In both cases, track their loyalty in the forms of referrals and repurchases.


One lasting thought

When you have long-term customers and employees, you should also ask them to recruit others like them to your business. This has a multiple benefit for everyone involved. First, recruiting costs for employees and acquisition costs for customers go way down because referrals are always the least expensive approach to new business.

Second, employees and customers who refer tend to refer other people or businesses who are like them (possessing the same values, work ethic, goals, etc.) so you will be getting a new employee or customer who has the potential for longevity. Third, your new customer or employee brings a feeling of trust into the new relationship with you. This makes all your C/ERM efforts easier because of the positive first experiences, which leads them to tend to stay with you longer.


Richard F. Gerson, Ph.D

Richard Gerson is president of Gerson Goodson, Inc., a consulting firm that specializes in helping companies increase their profitability by developing and managing long-term customer relationships. The company also works with clients to measurably improve the performance of their employees by maximizing productivity through psychobehavioral techniques.

The results of his training and consulting programs turn individual and organizational ordinary performers into extraordinary performers. GGI has worked with clients ranging from individual entrepreneurs to Fortune 500 and Inc. 500 companies. Gerson has also coached executives, sales professionals, athletes and teams to achieve performance improvement and peak performance.

Gerson is an internationally renowned, and much sought-after, speaker and trainer. He combines humor, education and entertainment to get his message across to audiences. He has authored 16 books and published over 350 articles in journals, magazines, newspapers and newsletters. He has a Ph.D. in Sports Psychology from Florida State University, along with six professional consulting certifications.





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