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Advertising and marketing have the same goal in mind: to make the phone ring or bring customers in the door. After that, what happens is up to you. If customers like what they see, if they find great products or service, if they are treated well, they will return. When that happens, you have the most prized of all things: a valued, loyal, returning customer.

According to Inc. magazine, it costs five times more to create a new customer than it does to retain a current one. Similarly, there is a rule of thumb that says that 80 percent of your business comes from 20 percent of your customers (the 80/20 rule). The best thing you can do to stay successful in business is make new customers consistent customers by treating them well, giving them exceptional service, and doing what you say you will do when you say you will do it.

By the same token, you also need to care for your employees. Employees are the backbone of your business. If they are happy, your business runs well; if they are not, well, you know. Your job once you get your business up and running (among your many other jobs) is to care for these two constituencies. Take care of your customers and employees, and they will take care of you.

 

Almost every business will have three different types of customers: new customers, existing customers, and exiting customers. You need to know how to handle all three correctly if you want to succeed in business.

Creating new customers is an ongoing process, and it is one of the fun aspects of business. Many entrepreneurs enjoy spending their time figuring out ways to lure in new business. Where many drop the ball, however, is after the initial sale. Flush with success, a new entrepreneur often neglects the new customer after that sale, inadvertently failing to realize that that new customer may become one of the valued 20 percent if treated properly. You turn that new customer into a returning customer by treating him or her well from the start. If you don’t, it’s the business equivalent of a onenight stand.

Existing customers are one of your most valuable business assets and cannot be taken for granted. They usually make up the bulk of your business, so it is incumbent upon you to nurture that relationship and let those customers know how important they are. Existing customers should be given special services and discounts when appropriate, and should always be shown appreciation for their patronage.

Finally, all business will have customers who are ending their relationship for one reason or another, and even this customer needs special treatment. The ending may just be the natural course of the relationship; for example, a chiropractic patient who is ending his care or a customer who is moving away. Because you never know who they talk to or who they may refer to you, this customer needs to be cared for just as well as the others.

Why do customers leave? Consider these statistics from a Small Business Administration (SBA) survey:

• 4 percent of customers leave a business because they have moved away.
• 5 percent change their purchasing habits.
• 9 percent decide that they like the competition better.
• 14 percent become disenchanted with a company’s overall service.
• 68 percent feel unappreciated.

 

As old customers leave, you need to constantly be bringing in new customers to take their place. And as you do that, you need to be converting your new customers into existing, loyal customers. This important cycle of your business cannot be ignored. Old customers will leave (because they do), and if there are no new customers coming in to pick up the slack, you will soon be out of business.

At Carpet World, in Long Beach, California, a huge sign reads “Our Word of Mouth Advertising Starts With You!” That is the attitude. Taking care of your customers, all of your customers, and letting them know how much you respect and appreciate them will go far toward keeping your business on top.

 

What Is Great Customer Service?

 

While “great customer service” is a mantra we all hear about, few businesses actually incorporate it into their modus operandi. It may be because they have never given it much thought, or because it is simply not a priority, or that the culture of the company may be so hectic that employees feel stressed. Unless you want to be on a neverending quest for new customers because you have no returning, loyal ones, you had better make customer service a priority.

Furthermore, serving your customers well is also a great way to distinguish your business from the competition. You have to give people a reason to patronize your business—better prices, a better location, better products, or, yes, better service.

The essence of superb customer service is that service becomes one of the guiding principles of your business. You need to put pen to paper, create a policy, and then see that every employee receives and understands it. Also, make sure that it is made a part of the employee manual. For employees to realize how important you take customer service, it must be stressed every day, in many ways.

■ Great Customer Service

 

• Be attentive. Think like a customer. What do they want from you? What are their needs? The better you can meet those needs, the better your customer service.
• Make it personal. Endeavor generally to anticipate the needs of particularly special customers. Offer recommendations and ideas that they might be able to use. Become their partner. Send them a handwritten thank you or other token of your appreciation. They won’t forget it.
• Give them a discount. A discount on future purchases is a great way to make customers feel special (and remain loyal).
• Keep them informed. Costco sends its allimportant small business customers a special newsletter every month loaded with information, business tips, ads, and discounts. Can you do something similar?
• Take personal responsibility. Make sure customer service representatives act promptly, keep their promises, and follow up. The idea is to have one person accept responsibility for fixing a problem, do more than the client expected, and do so in a positive, helpful way.
• Go the extra mile. Infusing your troops with the power to solve basic customer problems without seeking extra authority will not only increase the level of your customer service, but it will simultaneously show your employees how important customer service is to the company.

 

Helping Employees Help Customers

 

The California Chamber of Commerce recently conducted a survey of 100 of the most successful small businesses in that big state. One of the questions it asked was this: The real key to business success is:

A. Hard work and perseverance

B. Fine products and service

C. Advertising

D. Knowing the fundamentals of business

E. Employees

The overwhelming answer was E, employees.

■ Real Life Example

 

“For my whole career in retail, I have stuck by one guiding principle. It’s a simple one, and I have repeated it over and over and over, but I’m going to say it again anyway: The secret of successful retailing is to give your customers what they want,” said the world’s greatest retailer, Sam Walton of WalMart.

Walton certainly knows a thing or two about business success. Bigger than Sears, Kmart, and JCPenney combined, with nearly 4,440 stores, WalMart is the world’s number one retailer and employs more than one million people worldwide. Not bad, considering Walton started with a single store in Bentonville, Arkansas (population 3,000).

Sam Walton attributes much of his success to customer service, as exemplified by practicing what he called “aggressive hospitality.” Said Walton, “Let’s be the most friendly—offer a smile of welcome and assistance to all who do us a favor by entering our stores. Give better service—over and beyond what our customers expect. Why not? Exceed your customers’ expectations. If you do, they’ll come back over and over again.”

This philosophy is also expressed in something WalMart calls the “Sundown Rule.” It is one reason the company is well known for its customer service. The Sundown Rule states that employees strive to answer customer requests by sundown on the same day the request is made.

It is not hard to understand why. Employees do the work. Employees make decisions. Employees are on the front lines. It follows then that if you want to offer great customer service, you have to infuse your employees with that desire, because for many businesses, it is the frontline employees who deal with customers on a daily basis. If you want to be known for having great customer relations, your staff needs to know what is expected of them.

■ Helping Your Employees Help Your Customers

 

•   Support employees who deal with customers every day. Make their jobs easier. If they have what they need, they will be happier and that will translate to the customer. Waiters at Outback Steakhouse, for example, are allowed to offer patrons free food after a problem has arisen.
• Train all employees in customer service. One CEO takes training so seriously that he often teaches the customer service class given to new hires himself. This training should also include phone courtesy training, which is the first contact many people have with your business.
•   Stress communication. Again, those who deal with customer complaints need to know how to solve the problem and need to tell the customer that they will solve it. Make sure they keep the customer up to date and offer a solution in a timely manner.
• Reward a job well done.
•  Have a “no tolerance” policy. Never tolerate employees who give poor customer service, no matter how bright they may be. If you begin to stress the importance of increasing the quality of your customer relations and back it up with actions, the message will be received.
•  Poll customers frequently to get feedback on how you’re doing. Not only do most customers not mind giving feedback, they feel important when they do.
•  Stress manners. Customers like hearing “Thank you” or “We’re so sorry” or other considerate words, when appropriate.

When problems do arise, the company motto should be: This will be fixed. Always acknowledge a customer complaint as soon as possible. Let the customer know you are sufficiently concerned about the problem and your team is on the job to resolve it.

For example, Nordstrom department store has an enviable reputation for superb customer service. One reason is that customer service is stressed, even as early as the initial hiring interviews. One interviewee tells the story of how she was told by a Nordstrom executive that if a customer brought in a used pair of shoes six months after the sale, Nordstrom would gladly take the shoes back. That the customer is number one at Nordstrom is not hyperbole, it is reality. Says David D. Glass, president and CEO of WalMart, “Outstanding customer service and Nordstrom are synonymous. Their innovative approach has allowed them to find out what the customers want and then do it. Their standards of service are what we all shoot for.”

 

Handling Complaints

 

Indeed, feedback from your customers, whether positive or negative, is one of the most valuable things your business can get. According to the SBA, most business owners get one to five complaints a week, and most are about billing and pricing. Interestingly, the SBA survey also says 95 percent of dissatisfied customers would do business again with a company if their problems were solved quickly and satisfactorily. Solving the customer’s problem is your job, even if you disagree with his or her complaint.

All you need to do is listen. To win back dissatisfied customers, be willing to hear them out instead of being defensive. Then placate angry customers by letting them know you are more than happy to correct the problem to their satisfaction. After listening:

•   Ask the customer how he or she would prefer the problem be resolved, and resolve it that way if you can. If a customer wants a refund, give it to him or her, if possible. If you do, you will likely keep a customer.
• If the problem has to do with employees, discover whether the problem is endemic and, if so, root it out.
•   Even if you are convinced that your business is not to blame, be humble, express your regret that the customer had a bad experience with your company, and offer something to mollify him or her.

Complaints are good because they help you learn what your business is doing wrong. But feedback need not be negative to be helpful. Soliciting feedback is a valuable way to find out what customers like and dislike about your business, as well as a way to discover what they would change or keep.

By offering a small gift certificate for participating, you can learn a lot of valuable information from your clients, while also getting their addresses that you can add to your mailing list. Another benefit of using customer feedback surveys is that you can get testimonials from them. Once you get their permission, those testimonials can be used in your marketing and promotional materials.

Customer feedback can be one of the best friends your business has.

 

Caring for Employees

 

Not only must your customers know they are appreciated, but so should your employees. There are many ways you can run your business. You can be a dictator, a jerk, a facilitator, a cheerleader, or any number of other personalities. The important thing to realize is that the style you choose to use will, in large part, determine the kind of business you create. If your employees learn to loathe you, you can bet it will affect the bottom line, just as it would if they learn to love you.

A trait common to many highly successful businesses is that the owners and managers put a lot of effort into communicating with employees to make sure they are happy and motivated. A simple but highly effective thing you can do to create a positive work environment is to be, like Ronald Reagan, a great communicator. Good communication could be a quarterly “state of the company” report to employees, encouraging them to give suggestions or ask questions, or it could be oneonone meetings devoted to career goals.

Another thing you can do to create a great work environment is to be sure to properly reward your employees. A large part of making employees happy has to do with compensation. Compensation comes in many forms, the most obvious of which are paychecks, bonuses, profit sharing, and stock options. While the thought of sharing profits with employees may nauseate you, consider that doing so becomes an incentive for them to do well, it improves productivity, and shows your appreciation for a job well done. Less evident rewards can also make a difference too. A gift certificate, a luncheon to honor employees who have made outstanding contributions, or free Tshirts all help boost morale.

“Share your profits with all your Associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations. Remain a corporation and retain control if you like, but behave as a servant leader in a partnership. Encourage your Associates to hold a stake in the company. Offer discounted stock, and grant them stock for their retirement. It’s the single best thing we ever did.”

—Sam Walton, Made in America.

There are many measures for employee satisfaction beyond money. Employees want to be appreciated, and they want a life outside the office. Knowing that happy employees create a happy workplace, and, usually, a more productive and profitable workplace, it is not a bad idea to take the pulse of your staff once or twice a year to see how you are doing.

The things that you want to find out, via a feedback form, private meeting, or some other method, include:

• If the employee feels that he is cared about as a person, not just a cog in the machine
• If the employee feels her work is appreciated and praised
• If he feels that people care what he has to say
• If she likes her job, and what she would change about it
• What he needs to perform his job better (tools, training, equipment, support, etc.)

You will be spending a lot of time at your new business and with your employees. Being a good boss is one of the easiest, and least expensive, ways to ensure the success of your business.

The Mission Statement

Another way to let employess know what is expected of them is to create a mission statement for your business. A mission statement is a very effective business tool because it tells you, your employees, and your customers just what your business is really about and where it is supposed to be headed. Knowing what your mission is also helps you know whether your daily activities and policies, are getting you closer to or further from your goal. Thus, it not only keeps you focused, it also helps employees understand what is expected of them.

Many small businesses have a mission statement prominently displayed somewhere, and employees often pay it lip service. But great businesses get their employees to actually buy into that mission and believe in it. When employees don’t understand what the business is about, or if they are forced to heed to some maxim that they neither buy into nor believe is true, morale suffers. Conversely, when they feel part of something larger, their value increases.

■ Creating a Mission Statement

 

Your mission can be either personal or for your business. In this exercise, we will create one for your business. It should be between 50 and 400 words. It is your dream, your focus, your purpose. Create a mission statement by answering the following questions:

• What personal values do you want to be embodied in your business?
• What qualities and characteristics should be best exemplified by your business?
• What resources are at your disposal?
• What is your niche?
• What is your grand vision for your business? (Don’t be shy!)
• Based on your values, vision, characteristics, and resources, what is the purpose of your business?
• Which of your personal qualities do you want to be infused in the business?
• How can your business best serve your clients, family, employees, and investors?
• How much money do you want to make? What are your markets? Who are your customers? What is your responsibility and commitment to them?
• Are you willing to commit to your mission, your vision, your dream? Are you willing to pay the price, whatever that is?

Based on your answers above, based on your values, dreams, plans, niche, resources, etc., draft a mission statement for your business. Make it large and bold and fantastic; something you believe in with all of your heart. Surrender to your purpose.

“By intentionally raising your own expectations of yourself, you create a gap between where you are and where you choose to be. Having created this gap for yourself, everything about you automatically begins working on your behalf to close it. This explains why people with a mission enjoy boundless energy.”

Here’s an example:

Mission Statement  Steven D. Strauss

My MISSION is to be—and to be recognized as and respected as—

The World’s Leading Entrepreneur Expert

In support of my MISSION, I will gather and disseminate the very best hints, tips, ideas, and entrepreneurial strategies. I will offer valuable insights and ideas that enable people to be freer, more independent, wealthier, and happier.

Backing my MISSION, I will create significant books, columns, programs, products, businesses, and speeches for the experienced and amateur entrepreneur alike.

Steven D. Strauss

Mission statements can also be created in conjunction with your employees. The value of doing this is that everyone owns the result. The downside is that you may not like the result. For a new startup, it is probably best to have the top management create the mission statement, and then help all new employees buy into it from the day they are hired.

 

The purpose of a meeting is to share information, brainstorm, and work toward accomplishing a goal. But that’s not what happens at most meetings, and employees tend to tune out when meetings are confusing, lack focus, or are boring. Bad meetings result in more meetings, lower morale, and decreased productivity.

It need not be so. These tips should produce both better meetings and thus a more efficient business:

• Keep it short and sweet. Meetings run into trouble when they are allowed to continue ad nauseam. Of course, some meetings need to be
• long, but those should be the exception. Most meetings, if they stick to a well thoughtout agenda, can be finished in well under an hour, and a good facilitator should keep the meeting on track and moving forward
• Speak plain English. Jargon and mumbo jumbo waste time and make the meeting pointless.
• Offer recognition. Recognize the winners on your team. Take a few minutes to congratulate and thank them for meeting goals, closing deals, and making money. Praise reinforces positive behavior and encourages everyone to do well.
• Open up your circle. Bring in people from the real world. Have a customer attend a sales or staff meeting and explain why he or she buys from you. This is a powerful dose of reality.
• Take action. It is a good idea to create an action plan at the end of every meeting. The plan will list each task that needs to get done, who will do it, and when it will be completed. The action plan should be distributed to everyone who attended.

If your meeting becomes a way to help your staff make more money instead of a rote rendition of the last meeting, then you just might find that the once dreaded sales or staff meeting is no longer an unwelcome chore.

 

Resources You Can Use

 

Breakthrough Customer Service: Best Practices of Leaders in Customer Support by Stanley A. Brown (Editor) (John Wiley & Sons, 1998).