Here are two stories that suggest that good customer service really starts with the basics. Both stories are true. And while the examples concern a consumer real estate business, the lessons can apply to nearly any service business.

In the first case, a real estate agent sent a prospective home buyer copies of ten MLS listings of homes for sale. The next day, the buyer called to tell the agent that there were two properties that he was interested in. When he called, another agent answered the telephone and told him, “Becky just stepped out of the office. She’ll get back to you in about 30 minutes.”

Thirty minutes went by, a day went by, a week went by. The agent never returned the prospect’s phone call. Understandably, the buyer interpreted the agent’s non-response as disinterest in his business. He contacted another agency and eventually bought one of the two properties through the new agent.

The price of the missed phone call? Approximately $10,000 in commissions.

In another case, a prospective home buyer left several messages at an agency about some properties they had listed on their Internet site. Again, the buyer’s phone calls were not returned. Finally, in frustration he called and spoke to the agency owner, who apologized profusely for the oversight. “I’ll send you some information about our properties right away,” she promised.

The buyer expected to get the material in a day or two. But five days went by, a week passed, ten days went by, and still the information never arrived. Finally, he called the agency again, there was no answer, so he left a less than flattering message with the owner’s voice mail. He also told his story to another agency, as well as to several of his friends.

The owner, it should be noted, never called to apologize, or at least explain why she never sent the materials.

In the first case concerning the lost commissions, the agent most likely never returned the customer’s phone call because she never got the message in the first place. In the second case, we can assume the owner of the agency intended to send the materials, but simply forgot to do so.

As noted at the outset, we spend a lot of time and money on sophisticated customer relationship management programs, high-tech tracking systems that measure service quality, and employee training and re-training. However, these two stories suggest that many businesses would be better off focusing on the basics. . . .

For example, do you know that phone calls are being returned promptly at your business? Are you sure, or are you jus assuming they are? Customers expect to have their phone calls returned promptly. Unless they tell you otherwise, “promptly” to a customer means today – tomorrow at the latest.

Are employees checking and returning their email and voice mail messages regularly? In some cases businesses installed voice mail to alleviate the problem of lost or missed telephone messages, yet employees allow their messages to back up for days, forget to return calls, or – the worst offense – use their voice mail as a way to avoid customer “interruptions.”

If you are worried that customer calls are not being returned, consider setting up a centralized location for messages so that none get lost in a pile on someone’s desk. Instruct your staff that messages should include the name of the person who took the message, the time of the call, and – obviously – the name and phone number of the caller.

If nothing else, “audit” your telephone message procedures. Make sure they are clear, and that everyone in the office knows the procedures, as well as the financial impact when service procedures are not followed.

In our second case, the agent who forgot to send the customer the requested information simply needed to ‘fess up and apologize for the oversight. We’re human beings, not machines, and most people are willing to forgive a mistake, as long as the guilty party owns up to the error. Good customer service starts with taking responsibility for the customer. In this case, the owner of the agency failed to take responsibility, irritating a prospect and setting a bad example for the other agents in her office.

Some years ago a company that actually has a terrific customer service record established what they call their “Ooops!” fund. They use it to buy gift certificates at local restaurants or gift baskets from local florists. Whenever they goof up with a customer or prospect, they apologize promptly and send one of their “Ooops!” gifts. When they do make mistakes, which is rare, they are ready to make amends with the customer. By preparing for such an eventuality, it is easier for them to admit it when they make a mistake – and it is easier to make things right again.

This second case also demonstrates how important internal or personal support systems are to good customer service. A “support system” might be as simple as a personal information manager or Daytimer that reminds you of your appointments, your to-dos, and your phone calls. Many sophisticated computer-based and Internet resources are available. The idea is to have some sort of back-up system, so that when the frontal lobes fail (or wherever in the brain we remember these things!), the customer doesn’t suffer as a result.

Good customer service starts with the basics: returning phone calls, replying to emails, following-through as promised, and recovering promptly and graciously when we make mistakes.

“With the spiraling cost of heating oil, we’re starting to see an upsurge in the number of people walking into our store. Although my one salesman and I seem to do pretty well, I still get the sense that we are not selling as much product as we should, given the increase in traffic. Customers seem to be interested, then they don’t bite when we go for a close. I know our prices are at or below prices in larger retail stores. What do you think we should do?”

An inability to close a deal with an interested customer can be the result of numerous factors. Assuming the prospect has a need and the means to buy, and you have a product or service that satisfies that need, what might sabotage the sale?

In a word: risk.

Risk is probably the most common reason that prospects don’t buy. I think a case can be made that successful marketing is more about risk management than anything else. Risk consists of the uncertainty prospects face when they cannot foresee the consequences of making a purchase decision. A big part of a marketer’s job is to help prospects manage their perception of risk.

Some of the most common types of risk –

1.  Functional Risk is the risk that the product will not perform as expected. (“Will the wood stove produce the amount of heat we need?”)

2. Physical Risk is the risk to self and others that the product may pose. (“Are wood stoves a fire hazard?”)

3. Financial Risk is the risk that the product will not be worth its cost. (“Will a wood stove have a negative effect on the value of our home?”)

4. Social Risk is the risk that a poor product choice may result in social embarrassment. (“Will my friends think we’re cheap if we start heating with wood?”)

5. Psychological Risk is the risk that a poor product choice will bruise the customer’s ego. (“If I make a wrong choice, I’ll feel very embarrassed.”)

6. Time Risk is the risk that the time spent in product search may be wasted if the product does not perform as expected. (“If this wood stove doesn’t work out, will I have to go through the shopping effort all over again?”)

To make the sale, you have to address each of those six types of risk.

Prospects handle risk in various ways: by seeking information and personal reassurance, relying on the “brand” image of the product or the image of the store, sticking with a known quantity, or simply by buying the most expensive product they can in the belief that a higher price means greater quality and less risk.

As the seller, ask yourself: “What can I do to provide the right kind of information or reassurance to customers? Do I carry the best brands? Does my store image create confidence and trust? Do I have an inventory of product at different price points, so that customers who want to buy ‘the very best’ can do so?”

In nearly every case, you can help your prospect manage risk by being the one who provides useful, detailed information, timely reassurance, a positive, professional image, and a great deal of personal empathy and understanding. That will go a long way in helping your customers feel comfortable about saying, “Yes!”

For the past few years I have been trying to unravel the mystery of why so many local retailers are reluctant to embrace new marketing technologies such as email marketing and e-commerce web sites. The explanations I get from various small business consultants and web gurus usually fall along the line of “they are resistant to change,” “they are stuck in the past,” “they’re just old-fashioned.”

Barely hidden behind these comments is a raw contempt that suggests that local retailers deserve to fail because they are so “slow to change”

None of these comments have made sense to me. The independent retailers that I know are smart businessmen and women. They are as aware of the challenges as anyone and eagerly looking for solutions. They are not resistant to change. More often it’s a case of not being sure about which change to embrace and which ones will be worth their investment in time and money.

A few weeks ago I came upon another explanation — one that makes sense to me — about the local retailer’s reluctance to embrace new marketing techniques and technology. Last April the Journal of Retailing published a paper, When Do Relationships Pay Off for Small Retailers? Exploring Targets and Contexts to Understand the Value of Relationship Marketing. The authors are Mavis T. Adjei, David A. Griffith, and Stephanie M. Noble.

Their study of 172 local retailers showed that there was a significant difference in the value of customer relationships depending of the audience (customers and suppliers) and local market conditions (highly competitive and dynamic, high levels of customer change). Retailers in their study had an average of eight employees, $634,000 in annual sales revenue, two locations and 18 years in operation.

As you might expect, in most cases the better the retailer’s relationship with customers, the better the store’s performance. In one situation, however, a strong customer relationship actually had a negative effect on performance.

I know that sounds illogical and counter-intuitive, but the study suggests that retailers can become over-reliant on customer feedback. Having that personal, face-to-face contact gives them a false sense of security that they are “in touch” with the marketplace. With that confidence in their customer relationships, they tend to discount what is taking place outside the store.

As the authors of the study explain it –

Market dynamism resulted in a negative relationship between relationship quality
with customers and market responsiveness. This negative moderation suggests a small retailer’s over-reliance on relationship quality creates an inertia effect, thus when practices are changing relying on quality relationships with customers hinders a retailer’s market responsiveness because they fail to adapt to changing marketing practices in the industry.

Independent retailers have been exhorted to embrace new marketing practices and technologies for years with mixed success. As the study shows, the reluctance to do so is not because retailers are stuck or resistant to change. It is primarily because they believe they are already doing what logic tells them they must do: create excellent customer relationships.

Clearly, that is not enough. Now we see that the next step is to maintain those relationships and to monitor and respond to today’s dynamic retail marketplace.