How to Recession Proof Your Business with Customer Service
In rough economic times when businesses cut costs in an attempt to improve the bottom line and the cash flow needed to effectively operate during slowdowns and economic recessions, they forget in many cases to retain the staff that provides good customer service, and more often than not, it’s staff that provide the best customer service on a consistent basis are the first ones to be laid off, as Circuit City did as recent as last year in an attempt to save the business, and the employees it laid off in its cost cutting measure immediately went to work at the nearest electronics competition such as Best Buy, where they were followed by many loyal customers, and we all know Circuit City was later forced to close and cease operations.
This is just one way businesses that deal with consumers seem to be suffering from a definite disconnect, between the level of service they want to provide, and the service actually provided by their employees.
Signs of Poor Service
There are some key signs that customer service may be in need of some attention – and most probably some staff training & experience retention – to help restore the customer’s faith:
- Poor employee retention
If employees are leaving too quickly (i.e. within three years), there can be no real opportunity for them to build up relationships with customers and knowledge about individual customers leaves the company with every lost employee, so if this is the case, consider bringing in an outside HR (human resources) consultant to talk to employees and find out what needs to be done to change the situation; employees will often tell an “outsider” things that they would never tell their manager. - Customer complaints
On average, only around 6% of dissatisfied customers will actually take the time to complain, so out of all the customers who encounter a problem, 94% won’t tell you (but they’ll tell their friends and family, of course), and when these dissatisfied customers do gather the strength to actually complain, many front line employees have a natural instinct to refer the customer to someone else or, worse still, to deny that there’s really a problem. So if management sees that there are very few complaints, that doesn’t mean that customer service is perfect at all, and if employees have not built relationships with customers, many customers will defect without any further prompting, so make sure that your front line teams are required to record all complaints and any action taken to
solve them and complaints data should be treasured, documented, and shared with management. The important point here is that if you’re not getting complaint data from the front line, there’s a serious problem. - Employees aren’t empowered to handle problems
Unless front line employees are empowered to resolve customer complaints and problems without resorting to calling supervisors or referring the customer to a manager, customer service – and the company’s reputation – will suffer greatly, as customer issues should be handled from start to finish by the same person if at all possible. Remember, customers do not want to wait or, even worse, be transferred to multiple people to have their problems solved, and there is nothing worse than having to repeat the problem over and over again to different people. The important point to know here is this is where you need employee training and empowerment: give the whole customer-facing team the knowledge, tools, and authority they need to defuse angry customers. - Loss of long-term customers
When a long-term customer leaves, you need to notice it and query it, since when you have built a long-term relationship with a customer, your ability to retain that customer significantly increases, and when a customer who would normally give you the benefit of the doubt takes their business elsewhere, the problem is almost
always the service they’ve received. What you have to do is try to find out the real reason they defected, and use that information to prevent it from happening again. Remember that flexibility is needed in order to make changes in the company based on information from lost customers. - Fewer referrals
A business with delighted customers should always be gaining new customers from referrals and if your service isn’t good, referrals will drop off first – even before your existing customers defect to a competitor, and this makes the continual monitoring of referral levels one of the most powerful indicators of ongoing customer satisfaction. To quote a wise mentor, “Satisfied customers buy from you, but delighted customers sell for you.” Also, if you’re gaining lots of new customers but losing just as many existing customers, this indicates a serious disparity between what your brand is promising and what it actually delivers. - Low morale
Employees’ morale is something that shows whenever they interact with customers, and the customer is very quick to pick up on negative sentiment toward the company, and while low morale is not always a result of poor customer service (although it can be due to a lack of empowerment), it always creates poor service. If this is the case, then you as the management need to try to instill a sense of pride
throughout the company, and offer employees some well-deserved “rewards and recognition.” Empower employees to make decisions (within reasonable limits), and train them to make good decisions that have both the customer’s and company’s interests at heart. - While there are obviously more than six signs that identify bad customer service, these are certainly among the main ones to watch out for, and if you recognize any single one of these six signs, the time has come to focus attention on fixing it urgently. If you recognize more than one of these signs, there’s absolutely no time to waste, because chances are great that you’re already losing market share.
Recognize Signs of Poor Customer Service
In times when businesses cut costs in an attempt to improve the bottom line and cash flow needed to effectively operate during slowdowns and recessions, they forget in many cases to retain the staff that provides good customer service. More often than not staff that provide the best customer service on a consistent basis are the first ones to be laid off, as Circuit City did as recent as last year in an attempt to save the business, and the employees it laid off in its cost cutting measure immediately went to work at the nearest electronics competition such as Best Buy, where they were followed by many loyal customers.
This is just one way businesses that deal with consumers seem to be suffering from a definite disconnect between the level of service they want to provide and the service that their employees actually provide.
Signs of poor service
There are some key signs that customer service may be in need of some attention – and most probably some staff training & experience retention – to help restore the customer’s faith:
Poor employee retention
If employees are leaving too quickly (i.e. within three years), there can be no real opportunity for them to build up relationships with customers. Knowledge about individual customers leaves the company with every lost employee. If this is the case, consider bringing in an outside HR (human resources) consultant to talk to employees and find out what needs to be done to change the situation; employees will often tell an ‘outsider’ things that they would never tell their manager.
Customer complaints
On average, only around 6% of dissatisfied customers will actually take the time to complain. So, out of all the customers who encounter a problem, 94% won’t tell you (but they’ll tell their friends and family, of course). When these dissatisfied customers do gather the strength to actually complain, many front line employees have a natural instinct to refer the customer to someone else or, worse still, to deny that there’s really a problem. So if management sees that there are very few complaints, that doesn’t mean that customer service is perfect at all. If employees have not built relationships with customers, many customers will defect without any further prompting. Make sure that your front line teams are required to record all complaints and any action taken to solve them. Complaints data should be treasured, documented, and shared with management. If you’re not getting complaint data from the front line, there’s a serious problem.
Employees aren’t empowered to handle problems
Unless front line employees are empowered to resolve customer complaints and problems without resorting to calling supervisors or referring the customer to a manager, customer service – and the company’s reputation – will suffer greatly. Customer issues should be handled from start to finish by the same person if at all possible. Customers do not want to wait or, even worse, be transferred to multiple people to have their problems solved. There is nothing worse than having to repeat the problem over and over again to different people. This is where you need employee training and empowerment: give the whole customer-facing team the knowledge, tools, and authority they need to defuse angry customers.
Loss of long-term customers
When a long-term customer leaves, you need to notice it and query it. When you have built a long-term relationship with a customer, your ability to retain that customer significantly increases. So when a customer who would normally give you the benefit of the doubt takes their business elsewhere, the problem is almost always the service they’ve received. Try to find out the real reason they defected, and use that information to prevent it from happening again. Remember that flexibility is needed in order to make changes in the company based on information from lost customers.
Fewer referrals
A business with delighted customers should always be gaining new customers from referrals. If your service isn’t good, referrals will drop off first – even before your existing customers defect to a competitor. This makes the continual monitoring of referral levels one of the most powerful indicators of ongoing customer satisfaction. To quote a wise mentor, “Satisfied customers buy from you, but delighted customers sell for you.” Also, if you’re gaining lots of new customers but losing just as many existing customers, this indicates a serious disparity between what your brand is promising and what it actually delivers.
Low morale
Employees’ morale is something that shows whenever they interact with customers, and the customer is quick to pick up on negative sentiment toward the company. While low morale is not always a result of poor customer service (although it can be due to a lack of empowerment), it always creates poor service. If this is the case, the management needs to try to instill a sense of pride throughout the company, and offer employees some well-deserved rewards and recognition. Empower employees to make decisions (within reasonable limits), and train them to make good decisions that have both the customer’s and company’s interests at heart.
While there are obviously more than six signs that identify bad customer service, these are certainly among the main ones to watch out for. If you recognize any single one of these six signs, the time has come to focus attention on fixing it urgently. If you recognize more than one of these signs, there’s no time to waste: you’re already losing market share.



