Cutting Costs/Curtailing Services Can Produce Crappy Customer Service

Customer Service / customer service training / Employee Engagement / Employee Retention / Employee Turnover / Free Business Articles / Good Places to Work / Growing a Business / Human Resource Management / Job Satisfaction / Leadership / Talent Management / The Navigator Newsletter

One WorldIn uncertain economic times, it’s common for businesses to focus their time and energies on ways to cut costs.  However, many of the decisions to cut back have generated unintended, and in some cases, disastrous consequences.

Some of these knee-jerk reactions can have a negative impact on a business’ performance and growth. We are seeing increased rates of employee turnover, because people have learned the only way to make more money is to quit and find a job somewhere else. When a business shortchanges their labor or quality – its products, services, or level of customer service can suffer.

To weather economic storms, businesses must continue to invest in their leaders and employees – and hire, train and retain the best people with greatness in mind. This means planning for training and setting realistic goals so employees can do their jobs and produce the best results for the company. If businesses take the time to invest in their employees and allow them to build relationships with their customers, they will see the rewards in greater profitability, customer loyalty and employee engagement.

Here are four principles to keep you on track:

  1. Hire the right people. According to a survey conducted by Harris Interactive for in 2012, 40 percent of companies said they lost upwards of $25,000 per bad hire in 2011, and 25 percent estimated the cost was more than $50,000. Meanwhile, 69 percent of businesses surveyed said their business had been negatively impacted from a bad hire. Hiring the right people saves businesses time and money. Businesses succeed when they take the time to screen, research and place new hires.
  2. Equip your staff. Regardless of their position in the company, new and current employees need training. Managers need leadership training that equips them to succeed. A third of new managers fail in the first 18 months, and the reason is often lack of training, direction or mentoring. Front-line employees need training. Their personal and professional skills are key to making connections, and establishing loyal customers that will come back and refer their friends.
  3. Details matter most. Studies repeatedly show that unique gestures make a big impact on customers. Going the extra mile, answering the midnight call, remembering names, personalizing services – these social factors add up. Psychologists call it “the reciprocity effect” – where a person feels they must reciprocate when something is given to them. Moreover, it works best when the gift is not monetary. Monetary gifts can make customers feel bribed instead of cared for – while niceties and genuine hospitality inspire loyalty and referrals alike.
  4. Quality first. Businesses often fall into the “time is money” trap thinking the faster the service, the better the sales. Not so according to a 2012 Gallup Business Poll. When surveyed customers preferred a quality service or product over faster turnaround time or even a better price.

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1 Comment

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