Author: Shep Hyken

Ask 10 people about the best customer service companies, and you would expect to hear names like Nordstrom, Ritz-Carlton, Apple, Amazon, Zappos, and a few others. When Business Week listed the top companies last year, those names were on the list, along with some others as well, including Ace Hardware.

Ace Hardware is a chain of small, locally owned stores that manage to thrive in a very competitive marketplace among “big box” stores that are 10 times larger and spend 30 times more on advertising. How do they do it? Ace has successfully instilled a special brand of customer service built on being helpful. Ace employees will help with a weekend project, locate an obscure part … do whatever they can to be helpful.

If you are striving to build a successful business, customer service must be the foundation. If you come to the competitive world of business without a sound customer service strategy, your may watch your plans crumble as your customers seek a better experience. Study the “rock stars” of customer service like Ace Hardware to learn what sets them apart. Here are some basic strategies the top companies use to set themselves apart and reach a higher level of customer service:

• Customize your style of service and make it part of your brand. Like Ace with its focus on helpful, deliver a special version of customer service that is unique to your business. Ace promises to be the most helpful hardware store on the planet – not just the nicest (although that’s part of it) – and judging by its continuous success in the customer service arena, Ace is living its promise.

• Don’t make it too complicated. The best companies can clearly state their vision, and all employees are working together to achieve it. State your vision (or motto, mantra, etc.) in a clear and concise phrase or sentence. Ace is “the helpful hardware place.” The Ritz-Carlton’s employees know its credo, “We are ladies and gentlemen serving ladies and gentlemen.” By knowing and following these simple brand statements, company personnel deliver amazing customer service that customers appreciate and remember.

• Hire the right people. Consider the mission and vision of the company as well as the personality you want the company to project, and then hire people who will fulfill the mission. It takes the right people to create a service-oriented culture.

• After hiring right, train the employees properly. This means not only teaching the technical skills, but also, you guessed it, customer service.

• Trust and empower the employees to do the job you hired them to do. After they are trained in all aspects of the job, let them do it and trust them to do their best.

• Don’t forget to celebrate success. Once you have trained your employees and empowered them to take ownership of their responsibilities, let them know you appreciate their hard work by celebrating their successes.

Shep Hyken is a customer service and experience expert, award-winning keynote speaker, and New York Times bestselling business author. For information, contact 314-692-2200 or www.hyken.com. For information on The Customer Focus™ customer service training programs, go to www.thecustomerfocus.com. Follow on Twitter: @Hyken

I read a surprising statistic. It said that four in 10 senior executives in large companies don’t know the lifetime value of their customers. According to MarketingCharts, Forbes and Sitecore conducted a study of 312 senior executives in North American companies and learned that not only did they not know the financial value of their customers, more than half had no plans to find out. Basically, they don’t understand the significance of this important number – or they don’t care.

There is so much wrong with this. If these leaders don’t know their customers’ value, how can they expect their employees to understand it? Employees need to know the lifetime value of the customer in order to make proper customer-focused decisions.

To understand this better, let’s look at a simple example. Everyone goes to the grocery store to buy food and other staples, and studies show that the average customer spends $80-200 at the grocery store each week. Let’s just say an average customer will spend $100 a week. Even if you eliminate a couple of weeks per year, assuming that the customer is away or on vacation, that still leaves 50 weeks, which multiplied by $100 is $5,000 each year. But we’re looking at an even bigger picture – the lifetime value.

Another statistic figures into this, which is that the average family moves about every seven years. So, assuming that with each move they shop at a new grocery store, one family is worth about $35,000 over the course of seven years. How does it help to know all this? Imagine that a customer complains about a carton of spoiled milk. Knowing that their true worth is $35,000, would you hesitate in refunding their money for the milk? Of course not!

Here are some steps to understanding and applying a customer’s lifetime value:

1. Calculate: Determine the lifetime value of the customer. A simplified formula would be as follows: How much the average customer spends per transaction x the number of transactions per year x How many years they do business with you.

2. Communicate: Share this information with employees so they can make better decisions.

3. Demonstrate: Give specific examples of the kinds of decisions they can make such as refunds, exchanges, upgrades and more.

4. Recognize: Show your approval and appreciation when employees make good decisions.

5. Teach: Conversely, if an employee makes a bad decision, kindly instruct the employee about the right course of action and coach him or her about how to handle the situation the next time.

6. Share: Tell the story. Share good and bad examples of decision-making based on the lifetime value of the customer. Look at it as part of your employees’ ongoing training.

In short, knowing the value of a customer makes sense. If you manage interactions with your customers while keeping their lifetime value in mind, you will make the most of each and every interaction.

Have you ever rented a car at an airport car rental agency? If you have, you would know that before you drive away in the car, a few things are done. Someone checks your paperwork, looks over the car to check for any pre-existing scratches or dings, and will usually ask if you would like the fuel option. This allows you to avoid worrying about filling the car up before returning it.

I have a friend who recently rented a car at the airport. While he was there, he was offered an upgrade to a Tesla. Since he had never driven one and had always wanted to, he eagerly took the opportunity to upgrade. When he went to exit, all of the typical questions were asked, including, “Would you like the fuel option?”

He thought about the question for a moment and then began to laugh. For those who may not know, a Tesla runs on electricity. No fuel is needed. It’s an incredible piece of technology. At first, the attendant didn’t realize why my friend was laughing. When he did finally figure it out, he was rather embarrassed.

Something like this happened to me not so long ago at McDonald’s. I don’t go there often, but when I do it’s always because I’m craving those amazing fries! On that particular day, I ordered a chicken sandwich. And fries, of course. As if it were a written memorized script, the woman behind the counter said, “Would you like fries to go along with that?”

My response was, “Do you mean another order of fries, or did you mean to ask me if I’d like a hot apple pie with that chicken sandwich and fries?” I smiled at her. At first, she blushed with embarrassment and then laughed.  And, just so you know, I added the apple pie to my order, which I love almost as much as the fries.

This brings me to my point. Both of these employees, the McDonald’s worker and the gate attendant weren’t thinking about what it was they were saying. They simply asked the questions they so regularly asked. But in both situations, the question being asked was the wrong one. It was not only wrong, it simply didn’t apply.

These workers were simply going through the motions. Now, at times this can be understood. It has been a long day, or the worker is simply tired. But, the best people will always be alert and focused. They will know when to ask the right questions, and when not to ask the wrong ones. The best people understand that each customer is different and special, that each one deserves a unique experience.

Going through the motions is easy, but it’s not what your customers deserve. To avoid this, find a way to customize your interactions with your customers. If you notice a customer wearing a basketball jersey, say something about the team. This breaks the ice and makes the customer feel like you actually care. It allows them to feel special, because they are.

Every interaction you have counts. Every interaction you have should be slightly different. Never make a customer feel as if they are anything less than special and unique.

There are some experiences in life you just never forget. Having dinner with my good friends Kim Tucci and the late John Ferrara is one of those experiences. This was over 30 years ago. But like I said, some things you just never forget.

We were in Phoenix, Arizona and this dining establishment was a very nice one. John’s son Ben was with us. At the time, he was only 12 years old. When the server came along to take our drink order, we were curious to know what the daily specials were. When he mentioned a seafood dish, my friend Kim asked, “Is the fish fresh?”

This is the part that has stuck with me after all these years. He told her, “The fish is so fresh it hasn’t even thawed out.”

He was saying two different things, and I was a bit lost. The fish was fresh. But it was also still frozen? What could he possibly have meant? I wasn’t the only one who thought this was odd. Ben, although just 12 years old, was also looking at the server in complete confusion. It turned out that when he said fresh, he was simply implying that the fish hadn’t come from a freezer aisle in a grocery store.

In this case, our server gave the wrong answer to the question. That is the whole point. In every business, there are simple questions that customers are going to ask over and over again. Great employees will know the answers to these questions, because great employers will train them to.

Think about your business and your industry. What are the common questions that get asked time and time again? In a restaurant, a few of them might be about pricing, ingredients in the dishes, side items offered, or substitutions. As a frequent restaurant patron, here are some of the top questions that I regularly ask:

• What’s the soup of the day?
• Does this entrée come with a salad or side dish?
• How is the fish prepared?

That first question, the one about the soup of the day, is one that always puzzles me. It’s amazing to me (in a bad way) how often the server doesn’t know the answer to this. Their response is almost always, “Let me go back to the kitchen and ask the chef.” What blows my mind is how could they not know? What’s just as bad is, how could the manager have someone on the floor who doesn’t know the answers to these simple questions.

So, here is a little homework. There are three main steps to the assignment:

1. Come up with the top three questions your customers ask your employees.
2. Create the best responses.
3. Train your people to know the correct answers.

Once this is done, everyone in your company should be able to answer these questions, from the newest hire to the person who has been there the longest, from the lowest paid employee to the highest paid. Once all of your employees know the answer to these questions, train them on three more. Continually do this, as often as you see fit.

When your customers realize that your employees have the answers to their frequently asked questions, this will instill trust in your company. Trust turns into loyalty to your business.

I love jokes, and there’s one that is quite well-known, especially in the dental world. A client walks into the office and sits in the chair. As he is getting his teach cleaned, he asks his dentist, “Which teeth should I floss?” The dentist replies to him, “Only the ones you want to keep.”

You should look at your customers in the exact same way. 

There’s no such thing as a bad customer. They’re all good. Well, maybe not each and every customer is good. But for argument’s sake, and for this article, we are going to act as though every customer who wants to do business with you is a customer you would like to do business with. Let’s pretend this is a perfect world.

In this perfect world, all customers are good. However, there are still certain customers who are better than others. The reasons behind this vary, but it could be because they visit us more regularly, or because they spend more money each time they come in. Perhaps they are just more pleasant. Whatever the reason, some are simply a bit better than the average “good” customer.

When we use the teeth metaphor, it almost sounds ridiculous. Would you rather keep the front teeth, which are seen by everyone? Or would you like to keep the ones in the back that help you chew your food? Obviously, you want to keep them all. The same can be said of your customers. They are all valuable, they are all needed, and we should want to keep them all.

Your loyal customers are most likely the ones who are connected emotionally. Perhaps they feel like the employees treat them like friends. Maybe they feel comforted knowing they will receive a predictable and consistent experience, every single time. Many things beyond product and price connect customers to a company.

On the opposite end, we all have those customers we don’t see or hear form very often. Maybe when they do give us a sale, it’s a small one. But, they still come back from time to time. That makes them good customers, just as much as the ones who come more regularly and spend more money.

I once bought a dress shirt from a salesman at a men’s clothing store. It was on sale. Realizing my purchase was small, I commented, “Maybe next time I’ll see a sport coat or suit I like.” The salesperson smiled and said, “If I had 500 customers just like you, I’d be the happiest salesperson in the store.” He told me that he likes customers who walk out of the store happy, regardless of how much they spend, because he knows they will come back. He was right. I did go back, and I bought a suit. And, I’ve been buying clothes from him ever since.

The exact lesson that I am trying to teach, this guy had figured out and mastered. It didn’t matter how much money I had spent that first time. It was that I represented one of his customers. The point here is that you should be taking care of all of your customers. The small ones matter just as much as the big ones. Everyone, regardless of how much they spend, should feel happy, respected, and appreciated.

And, remember, be sure to floss your teeth. All of them!

The term “loyalty” usually brings to mind a long period of time … in other words, a lifetime customer. However, when I teach the concept of loyalty, I like to change the focus a bit. Don’t worry about a customer’s actions years in the future, focus on now. Or, more specifically, the next time. Customer loyalty is about ensuring a customer will come back to your business the next time, every time. Consider the following, what I call The Loyalty Question:

Is what I’m doing right now going to get the customer to come back the next time he or she needs whatever it is that I sell? 

If you concentrate your efforts on the here and now – and the next time – the future will take care of itself. If you consistently perform in a way that will keep customers coming back, you will ultimately end up with loyal, lifetime customers.

In these modern times, however, with technology and social media, customer service strategies are constantly changing and evolving, and this one is no exception. In light of today’s technology-driven social world, we can now put a new spin on this question.  I refer to it as The Evangelist Question:

Is what I’m doing right now going to make the customer want to leave a good review on social media sites? 

In the past when we talked about customers as evangelists for business, it was mainly in reference to the recommendations they would offer in face-to-face interactions. Today, customers can voice their opinions – good or bad – about a business in an instant on social media for the whole world to see. An important tool in business today is evangelism via the Internet – positive reviews on social media channels such as Facebook, LinkedIn and Twitter, and websites like Angie’s List, Urbanspoon and Yelp.

And, a positive review gives you the answers you hope for to both the Loyalty Question and the Evangelist Question. The customer is willing to return, and he or she is pleased enough to freely offer positive reviews.

You might be tempted to think that this concept is limited to retail businesses selling directly to the consumer. However, B2B must not write off the concept as there are avenues in which industry magazines and conferences, as well as bloggers, will effectively “review” your company.

Social media has evolved rapidly and become a part of most people’s daily routine. As people “talk” on these channels, they share experiences with those in their circle of friends and beyond. It would be foolish for a business to overlook the importance of using social media to its advantage, so how can you ensure your company is portrayed in a positive light? Most importantly, do a good job! Create a customer experience that is so good it makes your customers want to share it with others, online and by word of mouth. This will not only evangelize for your business, but also create loyal customers who continue to grow in number.

Your Brand is Only as Strong as Your Weakest Link

Recently I was flying to a speaking engagement. While waiting for my flight to board I bought a yogurt parfait. After paying for it, I looked for a spoon. There were forks and knives, but no spoons. The little compartment next to the forks and knives was empty. I asked the cashier if they had any spoons. She pointed to where they weren’t. I told her they were out, and in an effort to get rid of me, she suggested that I could go to the restaurant next store and ask them for a spoon.

I walked by the first restaurant a few minutes later and there were plenty of spoons. Obviously, there were spoons somewhere. The employee just didn’t want to get them, when a customer needed them.

I didn’t want to make a scene over this, but I thought I’d mention something to the manager. He wasn’t there when I bought my yogurt. He apologized, but then said something interesting. He mentioned that the restaurant was managed by a group at the airport, so I really shouldn’t expect the same service or quality I am accustomed to at this company’s regular restaurants.

This was a major brand with locations throughout the US. The airport restaurant had the same signage, the same logo and looked just like any of the restaurants you would visit outside of the airport. I’m sure that any executive of this brand would cringe at the response the manager gave me… “I really shouldn’t expect the same service or quality I’m accustomed to…” Really?!

And, that is where our lesson begins. You see, it doesn’t matter if it is an airport restaurant, a small kiosk or a full-service restaurant. There must be a similar experience across all locations, regardless of size or where it is. The logo is the logo, and the brand is the brand!

Let’s switch industries and talk about an icon in the world of customer service. When Nordstrom decided to move into the online world, many of their customers were concerned that they would erode their reputation for amazing service. Management thought long and hard about how to create an online experience that matched the expectation of a Nordstrom customer, and they delivered. Regardless of location – instore or online – Nordstrom will always focus on making sure the customer has the best experience.

Now we move to an employee within a company. If there are 100 employees, and 99 of them are amazing, but one is not, what happens when a customer encounters the one who is not? You know the answer. That one bad employee just created the reputation for your brand – at least with that customer.

The old saying is that a chain is only as strong as its weakest link. Well, the brand is only as strong as its weakest location – or weakest employee.

Shep Hyken is a customer service expert, keynote speaker and New York Times bestselling business author. For information contact or www.hyken.com. For information on The Customer Focus™ customer service training programs go to www.thecustomerfocus.com. Follow on Twitter: @Hyken