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Is good customer service important?

Is good customer service important?Customer service is the biggest retail cliché around. NOBODY ever disagrees with its relative importance, even though hardly anybody can quote any real evidence as to why it works, and very rarely prove its efficacy anyway.

Has ‘customer service’ has just become a bogeyman for retailers to lump all their issues together instead of dealing with poor systems, product quality and organisational culture and so forth? That is; for lack of imagination in identifying the real issues, they just blame on customer service because it makes intuitive sense.

In fact, there is plenty of evidence that customer service DOES work:

IBM (1994-1999) saw a 5.5 percent increase in customer satisfaction coincide with savings of $7Bn and a stock price that increased x1000! No doubt that better customer service would not be the only causal factor in this equation, but it is also not the only piece of research.

Another study (Harvard, 1994) found that employees who felt that they were meeting customer needs had 2x the job satisfaction level of employees who did not believe they were meeting customer needs. The relationship between cost savings and job satisfaction has proven time and time again.

The same study found that more than two-thirds of customers defect and stop using your service because they find service people indifferent or unhelpful.

But as they say in the classics: ‘lies, damned lies and statistics.’ Research can be made to prove anything if you know how to play with the numbers.

Can anyone explain WHY good customer service leads to customer satisfaction, and not merely postulate that it does because it seems to be a sensible assumption?

The answer might be as simple as ‘conditioning’ and dates back to 1890 – almost 120 years ago! Pavlov introduced us to the concept of conditioning and ‘association’ by proving that the dogs produced a physical response to an external stimulus (the bell) simply because that stimulus became associated with food.

If you think Pavlov’s bell has very little to do with modern marketing principles, consider this: Why would Holden (or any car manufacturer) always put a beautiful girl in or next to their car in their advertisements or at the car shows?

The answer is of course that they are drawing on the power of association, wanting prospective buyers to associate one kind of beauty with another – so to speak.

In exactly the same way, customers will come to associate visiting your store with a pleasant experience if they are ‘conditioned’ by specific stimuli (good customer service). Retailers who succeed at creating and delivering the right stimuli will find that customer satisfaction becomes a conditioned response and all it will take is a trigger like a simple smile of acknowledgement from a sales assistant.

Good customer service delivers the results, and there is plenty of scientific evidence that it is positively correlated with financial performance and there is sound underlying scientific principles to prove how it works.

What do you think?

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Dennis Price

Dennis Price

Dennis is an entrepreneur, author, speaker, consultant, and trainer. He is CEO of Ganador Management Solutions, and Founder of Retailsmartresults.com – a site helping retail businesses find productivity solutions in conjunction with their suppliers.

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