How Do You Measure Your Customer Service?

Your customer service team is the face of your business. Yet, measuring the effectiveness of your customer service and how it fits into the the overall customer experience can be tricky. This is due to the fact that it is a very subjective variable based on your customers’ expectations and the impressions your business is making in order to meet those expectations.

Though customer service may be a bit abstract, there are still ways to measure it. The following are seven factors that, when taken together, will give you a pretty good idea of how effective your business’ customer service is.

1. Customer Satisfaction. If you want to measure the effectiveness of your business’ customer service, then the first place to start is with your customers themselves. You can do this by conducting customer satisfaction surveys. One thing in particular that you want to pay attention to is your customers’ level of satisfaction over time. Does it trend up or does it tend to trend down? Depending on what you find, you may have vital information on why your customers choose to either stay or leave your business.

2. Customer Retention. And that brings us to the next important factor: customer retention. If your customer service is doing a good job, then chances are your overall customer experience is pretty good as well. Customers who are happy with the service they are getting will be much more likely to stick around and continue to patronize your business.

3. Rate of Referrals. When your customers are happy with their experience, then they will be likely to recommend your business to their family, friends, neighbors, and peers. So, another factor to consider is the rate of people who are actively recommending your business to others.

4. Sales Conversion. When your customer service team communicates with a customer, what happens next? Do they to make a purchase or do they take some other desirable action? If not, then determine when during the communication process are your customers slipping away.

5. Resolution Time. Another variable to consider is the time it takes your customer service team to respond to customer inquiries and resolve any issues. These days, your customers may be expecting extremely fast turn around times- meaning they want to hear from you within a few hours. A good rule of thumb is that no more then 24 hours should go by without the your customers getting some kind of response from your customer service team.

6. Rate of Resolved Issues. How many questions and complaints get satisfactorily resolved? If your customer service team is able to solve them quickly and your customers are walking away from the experience feeling satisfied with the actions that were taken, then this is a good sign that you are providing effective customer service.

7. Number of Complaints. You certainly can’t please everyone, and your business is bound to generate some customer complaints along the way. But if you see that your business is receiving an unusually large number of complaints, or the number of complaints has been increasing without an overall increase in customer growth, then this could be hinting to a fundamental problem.

If your business keeps track of all of these factors, you will get a pretty good sense of how effective your customer service is. This information will also help you to pinpoint those areas that may need improvement and ultimately allow you to provide the best customer experience possible.

Why Do People Spend Money? The Good News

Spending money is a complicated subject in the minds of many Americans. Everywhere on the Internet you’ll find articles by wannabe pop psychologists explaining why people spend the way they do and how they could and should spend less … or differently … or something. Guilt, shame and entitlement are the used watchwords. Poppycock. It’s really quite simple. While the majority of consumers do give in to an occasional bout of retail therapy, only about 5% of the population can be labeled compulsive spenders, according to the Journal of Psychiatry.

Most consumer spending is done for very healthy reasons, such as need, want and investment. When customers receive a high level of perceived value for their spending, their relationship with the retailer or service provider will be enhanced.

John Lennon used to sing “All you need is love.” (Of course he had a fortune worth $800 million.) However, the average Joe or Jane can’t live on love alone but needs to spend money for life’s necessities. Food, clothing and shelter are considered basic needs in Western society, although the quality, amount and price tag attached to these items will vary widely depending on the individual doing the purchasing.

In theory Betty Sue may only need one winter coat, but if she lives in a sophisticated urban area and/or works in the fashion or entertainment industry, she may find herself jonesing for another stylish wrap or two. Many purchases, from an upgrade to the latest smartphone to an exotic vacation, are made due to want, and if there are funds in the household budget for such splurges, “Why not?” tends to be the operative phrase governing such decisions.

Investment spending means laying out money now to obtain future value. This is the motivation for a wide variety of purchases (and the psychology behind customer loyalty programs) such as:

  • ordering pizza for supper to save time for an important project
  • putting down a large sum for a fine quality sofa which will have a longer lifetime than a less expensive piece
  • paying for a more efficient HVAC system in order to improve quality of life and save on utility bills
  • buying high ticket items like jewelry or real estate as a means of building up wealth – either to use during retirement or to pass on to one’s heirs eventually.

Perceived Value for Money
Whatever the item or service, financial savvy folks are reluctant to spend in ways they see as wasteful or “not worth it.” They are however, ready and willing to lay out hard-earned cash to receive perceived value, goods or services that deliver a real bang for one’s buck. Even the decision about which beverage to start the morning with is made on the basis of perceived value; a pricy designer coffee may give the caffeine addict more pleasure per dollar than the local diner’s brew. And if the barista gets your cappuccino to you in record time with a pleasant smile, that extra service will make the purchase even more satisfying.


Canny marketers know that the perception of value determines not only which of two items Carl Consumer will buy, but also his attitude and loyalty toward the seller. (See the 2008 study Perceived value, customer attitude and loyalty in retailing” by Ruiz-Molina and Gil-Saura, published in the Journal of Retail and Leisure Property.) A more germane question for small businesspeople might be “Why Do People Spend Money on Particular Items and at Particular Enterprises?” This will encourage raising the perceived value of products and services, thereby increasing customer satisfaction and retention.

Understanding the Basics of Inbound Marketing

The growing acceptance and implementation of inbound marketing represents a definitive shift in the way businesses are approaching sales and advertising. Instead of running after customers and looking for ways to make them open their wallets, smaller companies in particular have recognized the value of creating and sharing valuable content in order to encourage potential leads and to make current customers come back for more.

sales onlineIn other words, it’s a way of doing business that is based on “giving,” something that very much flies in the face of the traditional business model. For this reason, smaller companies are coming out ahead and leveraging content creation channels, such as blogging, videos, imagery, and even audio along side social media, to level the playing field against their bigger competitors.

If you are new to the ideas behind inbound marketing for your own business, then here is a rundown of the major themes:

Focus on Content Creation and Promotion. You create targeted content that answers your customer’s most pressing questions and needs, and you make a concerted effort to share that content in ways that will get it noticed by your target audience.

Marketing as an Organic Process. Your customers will go through stages as they interact with your company, and at each stage you need different marketing actions and approaches. It’s as if you want your marketing efforts to “grow” and mature with your customers.

The Power of Personalization. Without realizing it, many of your customers are already be getting bombarded with personalized content and promotional offers every time they go online. This trend cannot be ignored. As you learn more about your customers over time, you can better personalize your messages to fit their specific needs.

Multi-channel Efforts. Inbound marketing is inherently multi-channeled because it is based on reaching people where they already are, in the channel where they will most want to interact with you.

Big Integration. The platforms that support your content creation, promotion, calls-to-action, and customer support as well as the analytics tools you have in place to keep tabs on it all, must work together like a well-oiled machine. This allows you to focus on publishing the right content in the right place at the right time.

In short, inbound marketing is definitely a new way of doing business. But, it presents a great deal of opportunity to smaller companies that understand that in order to encourage the interest and investment of their customers, they need to give in order to receive.

5 Resolutions for Small Business Owners in 2013

The new year hasn’t even arrived, yet many small business owners may be wishing the clocks would go backwards. With big issues such as the Fiscal Cliff and the early stages of health care reform slated to go into effect on January 1st, there’s little wonder why.

But even if 2013 looks a bit rough from the outside, it doesn’t mean small business owners should be sticking their heads in the sand. If you are running a small business heading into the new year, here are five resolutions that you can make to keep your business on course:

1. Work on focus. If there is one thing that small business owners should have learned from the 2012, it’s that bigger businesses are pulling out all the stops when it comes to acting like a small business. This is evinced by the push for personalized service and same day delivery. To survive, small businesses have to be hyper-focused on their niche market, only providing the products and services they can truly deliver with quality.

2. Work those networks. Another big resolution for 2013, is to work on partnering with other businesses and professionals. Now more than ever, small businesses need to pool their resources in order to be more competitive, more relevant, and more profitable. This goes for businesses based both online and off-line. Even if you are not a natural when it comes to networking, in the new year the success of your business may depend on how well you can reach out to other business owners.

3. Work your customer service. One of the biggest assets a small business can have these days is also one of its most elusive: customer loyalty. I just saw an article at Business Insider about a Zappos customer service representative who spent a mind boggling 9 hours and 37 minutes (!) with a customer on the phone (they weren’t talking business the whole time… but, still…). Now, obviously you can’t afford to go that extreme with your customer service, but you can make a commitment to revamp some of your customer loyalty programs in 2013, and try to improve your overall customer service experience.

4. Work your online reputation. In these heady days of social media, a business’ reputation can literally be made or broken in an instant. The range and speed with which information is exchanged today is unprecedented. Another commitment for 2013, is to improve your online reputation. This includes: staying in touch with what people are saying about you online, ensuring that you business’ profile information is accurate, up-to-date, and complete, and in short, ensuring that your business is being properly represented.

5. Work your cash flow. Last, but certainly not least, is to re-evaluate how you manage your cash flow. If you haven’t yet learned your lesson from the chronic economic difficulty or any of the natural disasters that have happened in 2012, then make a commitment to incorporate strategies, such as creating an emergency fund, and using financing tools, such as a business cash advance or accounts receivables financing, to help you be prepared for emergency expenses and ultimately smooth out the flow of working capital in your business.

In short, as a small business owner, if you make it a point to truly focus on any of the areas mentioned above, then it may be just what you need to get your head out of the sand and paint a brighter picture in 2013.

5 Steps to Win Back an Unhappy Customer

Coming up against an unhappy customer can be unpleasant at best and downright damaging at at worst- threatening to drive away other customers and derail your efforts to run a successful business. But it is an inevitable part of doing business. You just can’t please everyone all the time.

That said, there are many ways to bring the majority of your disgruntled customers back over to your side. Here are five steps to diffusing even the most toxic of customer service snafus:

Step 1: Listen to your customer. The very first step to turning an upset customer to a happy one is to stop and listen to what he or she is saying and get the information you need to offer a solution. It’s also important that you understand how the customer sees the problem. If you do speak at the beginning it should only be to ask clarifying questions or to make statements of empathy and understanding. It is usually a mistake to open the conversation up with an apology since you generally will not even know what to be sorry for, and your apologies will come across as insincere anyway.

Step 2: Analyze the problem. Once you make the effort to listen you will be able to discover the reason behind your customer’s unhappiness. At that point you need to assess who or what was the cause. Was there some mis-communication between the customer and one of your employee’s? Was there a logistical problem? Is the customer upset about the quality of your product or service?

Step 3: Decide what actions to take. Once you understand what went wrong and why the customer is unhappy, you need to come up with a strategy to make rectify the situation. Vague assurances are exactly that- vague. You stand a greater chance of winning over upset customers if you present them with a specific solution to the problem at hand. Just a caveat: make sure the solution matches the level of discomfort or money lost.

Step 4: Address the problem sincerely. When you communicate the solution to your customer, remember attitude is everything. If you try to rectify the situation with an air of disdain or in a condescending way then even if the solution is appropriate, you will only end up doing more harm than good.

Moreover, if you are not a solo operation then you may be able to pick someone who is naturally good at identifying and defusing a dispute, and being sensitive where needed, yet being able to set boundaries, and make this person the go-to customer service rep for difficult customers. I once was in a store where an employee stepped away from a disgruntled customer and called in a co-worker. The co-worker swiftly and skillfully handled the situation that involved a considerable amount of discomfort for the customer with little recourse.

Step 5: Evaluate your response. One of the biggest mistakes that a business can do when dealing with an unhappy customer is to walk away from the situation the minute it is either solved or deemed unresolvable. Doing this is like leaving money on the table. You have a lot to gain from evaluating how the issue was handled, how long it took to deal with it, and how successful you were at resolving it. Where possible, you should even turn to the disgruntled customer for feedback. By doing so you’ll be in the best position to learn from any customer service mistakes, identify areas in your business that are constantly drawing negative responses, and know how to bring that unhappy customer back in the door.

How to Win Over Your Customers in the New Year

If you are like most small business owners, then chances are your ’08 holiday sales were a bit lackluster. But don’t despair. By introducing a few changes in the way you operate your business, you can brighten your outlook for the new year.

As a follow-up to my previous post on creative marketing techniques, here are a few low-cost strategies to develop customer loyalty.

Tip #1: Promptly respond to customer inquiries.

Make it a priority to get back to your customers. When customers feel that they and their concerns are important to you then they will be more likely to give you their business. Even if you don’t have an immediate answer to an inquiry, you should try to acknowledge receiving a customer’s e-mail or voice message within 24 hours, and inform the person that you are looking into the request or already taking action on it.

Tip #2: Make sure out-going correspondence is clear, concise, and professional.

But… it is not enough to just respond to your customers, you must also pay attention to how you respond to them. Voice messages, emails, and letters should be clear and concise. The time for elaboration is either in person or when speaking to someone directly on the phone. Make sure also that any written correspondence is spell-checked and free from grammatical errors, and that the response is relevant to the inquiry.

Tip #3: Look for where you can give a personal touch.

Handwritten notes, special “birthday coupons”, personally addressed and targeted emails, and no-obligation follow-up phone calls, can make a big impression on your customers’ minds and will measurably improve your customer loyalty.

Tip #4: Reward repeat business.

Give your best customers preferential treatment, such as small coupons or rebates as well as flexible payment options.

Tip #5: Seek ways to involve your customers in your business.

Try to get your customers involved in improving and promoting your business. I cannot emphasize enough how important it is to talk to your customers. You can speak to them in person when they come to your business and ask them for suggestions, or you can ask them to fill out a quick questionnaire, or have a suggestion box. Here again follow-up is very important. Even if you do not end up using a customer’s suggestion, you should let him or her know that you considered it. You can also get customers involved in promotion by, for example, having them forward emails to friends in exchange for a discount at your business, or you could run contests for the best logo or T-shirt design.

How to Avoid Being Screwed by Customer Service (Part II)

Read How to Avoid Being Screwed by Customer Service (Part I) first.

A supervisor can help you. They have:

  • More ability to provide perks/freebies/refunds
  • Power to put a note (good or bad) in the file of someone else you spoke to.
  • Special training to deal with customer grievances to prevent them from escalating to the higher echelon/legal channels.


If you are obnoxious and just seem like you are out to get something, then it is unlikely that you will succeed. If you yell and threaten, it is also unlikely you will prevail. Unless you are a lawyer, the supervisor probably knows laws relating their industry better than you do.


  • Be polite.
  • Use the person’s name as often as possible.
  • Take thorough notes.
  • Be honest.

How Your Side of the Call Should Go:

  1. Thank the supervisor for taking your call.
  2. Briefly summarize any positive experiences you have had or have heard about their company.
  3. Calmly and correctly outline your issue from the beginning.
  4. Describe the response you received from the customer service agent.
  5. “How do you advise we solve this problem so that I can feel good about your company again?”

Next Step: Lawyer

If you don’t feel that you have been properly treated, and you still want to put up a fight, then you can take your notes to a lawyer to see what your options are.

Good Luck!

How To Avoid Being Screwed By Customer Service

Whether you are on the phone with the airlines or you bought some defective merchandise, there are many situations where you might hope for a better resolution than the customer service agent “helping” you is able to offer.

What are your choices?

1) You can give up.

2) Use expletives and throw the phone across the room.


3) You can use what my mother taught me are the six most powerful words in the English Language when dealing with customer service.

May I Speak With Your Supervisor?

If you want to be polite, then you can say, “Please.”

Now that you’ve said it here is how you may still be screwed and the best ways to avoid it…

1) Sure, please hold a minute. Oftentimes, the minute will drag out for 20 or 30 minutes. To avoid this, at the beginning of any conversation with customer service personnel, ask for the employee number, the first and last name, or the the first name and the name of the call center. Each company has it’s own policy of which identifying information should be given to customers.

2) Hang Ups. Yes, even the most professional sounding “customer service” agent might hang up on you if you have not gotten identifying information first. Before begining your complaint kindly ask for the agents name and number if possible.

3) “My supervisor will tell you the same thing I did.” The first response should be, “Well, please let me try.” If they persist, then your response should be: “If your supervisor did not have any more power than you have, they would not be your supervisor. Please, may I speak to your supervisor.”

4) “I don’t have a supervisor.” Your response should be, “Oh, then are you the CEO of XXXX (Whatever company you are calling)?”

5) General stalling. At a certain point, if the person will not transfer you, you need to ask them point blank: “John, employee number 12345, are you refusing to transfer me to your supervisor?”

6) Pretending to help. Sometimes the agent will pretend to have resolved the issue just to get you off the phone. Later you will realize that the problem has not been corrected and you will need to call back and begin the process all over again, most likely reaching a different customer service agent with no record of your previous conversation. In order to avoid this have the agent fax to you a signed document stating your case and the proposed actions/ resolutions. Remain on the phone until the fax is received. Make sure it includes all the important information and official company mentions (logo and contact details). Keep a log of all your dealings with the company about the issue.

Check back for part II… “what to do once you are on the phone with the supervisor”