What Risks Are Lurking in Your Customer Satisfaction Strategy?

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What Risks Are Lurking in Your Customer Satisfaction Strategy?

by Charles T. Wilson

Do you want to grow your business and develop new customers? And do you agree that satisfying current customers is the best way to achieve those growth objectives? If you answered "yes," you are among most business owners, and you understand the everyday struggle to make this happen successfully.

As a risk manager, I'm always looking to help clients avoid unpleasant surprises and disasters. So, what are the key risks that might threaten your growth and business development strategies? And, how can you avoid or minimize these risks?

Giving and getting quality information about customer satisfaction are the two key approaches. And successful outcomes will depend on doing both well, time after time. In today's competitive world if you don't know what your customers think, you may be quickly out of business.

Giving great information actually starts with listening and questioning. These skills will guide the conversation to where the customer has concerns or needs more detail. Then the communication process has three additional elements:

Do you have different people requesting, preparing and signing checks? Do you receive bank and credit card statements unopened and reconcile them yourself? Do you count inventory and review payables files on a regular basis?

Who describes your services - are they knowledgeable and skillful communicators?
What do they say - do they describe the benefits in terms important to your buyer, or bore them with your work processes?
How do they say it - do you use customer stories or examples and avoid the hard sell?

Any breakdown here can spell trouble. If your staff is inexperienced they may come across as brusque or just trying to justify what you do or charge. The process of educating your customers needs preparation and practice - or else it can backfire.

The other side of the coin is getting great feedback, and this can happen in many ways in today's flat organizations. Make sure you know all the ways your customers might communicate with you - mail, phone, website, and perhaps in person. And ensure you or your staff in these different areas can give - or find - complete, helpful, fast answers for each kind of question or problem. For example, what if a payment is late? Do you send a "2nd Notice" form letter? Or do you have an experienced person call, ask if there's a problem, listen carefully to the answer and come up with an agreed solution?

Customer satisfaction information can only come from regularly asking for feedback. In addition to surveys, you can ask questions directly or include a "comments" card with every order or sale. One of the biggest risks with customer feedback can be not doing something with the input you receive. Customers will see it as a sham and assume you don't care. At least call or email to thank them for the input.

Think about what drives you crazy when you're the customer. If you can turn these around, you'll have a great chance to create pro-active customer satisfaction. Here are some opportunities you can take advantage of:

Be flexible with company guidelines. Listen and ask a few good questions to understand what might make a customer happy. One example might be with your policy on returns - can listening and understanding the customer's problem turn a return (and lost sale) into an upgrade?
Create sound customer expectations. If your communication is sloppy or you've made false assumptions - from not listening - a business relationship can quickly get soured. Use a checklist for your phone call. Then email the customer to confirm the results of your conversation regarding time, quality and cost.
Under-promise and over-deliver. Bolster your reputation. Be realistic in all areas, then try to deliver better, faster, cheaper. For example, if you quote a price range, your customer will "hear" the lower number. To successfully over-deliver, you'll have to come in under that figure.
Stick to your sweet spot. If you can't perform a service really well or your staff doesn't understand one of your products, try referring your customer to another business. And be sure they say who sent them! This will really enhance your credibility.
Be careful with unpaid fees or late payments. Fully understanding why your customer has not - or is unwilling - to pay can be a chance to nip a problem in the bud. The act of sending an overdue account to collections too quickly can lead to a nasty lawsuit that could easily have been avoided.

Education - first for your staff, then for your customer - is the path to great communications, effective service delivery and satisfied customers. As a bonus, you'll also create satisfied, confident employees.

Knowledgeable customers know what they need or want. They understand from your descriptions how your product or service will perform. And they make choices and perhaps compromises knowing the options.

How can your business provide and obtain regular, high-quality information? Your answers will help you build win-win successes and avoid the risks, expense and wasted energy lurking in a poorly executed communication strategy.

A version of this article first appeared in The Journal of Practical Business Ideas, volume VII, no. 3

© RiskSmart Solutions® 2006