Retail Observer

RETAILOBSERVER.COM MARCH 2024 42 T he reason most organizations deliver poor or mediocre customer service is that they don't understand the power of a customer service strategy. What do I mean by this? Strategy is a powerful tool you can use to gain market share and market dominance. When you develop a customer service strategy, you'll crush your competition and grow the value of your business by 100 to 400 percent. It's a powerful and cost effective tool, but it requires commitment and relentless support from top management. Only a handful of companies deliver great service or understand the real financial impact it has on a company. If you want to drive your business to great heights, you must have a service strategy. A business strategy should focus on the question: What can we do to dominate the market and achieve rapid growth? My answer is: You can develop a strategy that emphasizes customer service above all else. When you provide service that is so extraordinary that you earn the customers' loyalty for life, you'll own the market. There's another benefit of implementing a customer service strategy: Your competitors won't copy you. If your strategy focuses on price – maybe reducing the price of your most popular product by 50 percent – your competitors will copy you within a day or two. But if your strategy focuses on providing exceptional customer service, they won't copy you because they haven't got the tools ready to do so. A service strategy must start with a commitment from the CEO and travel through middle management down to every frontline employee. I can't emphasize this enough. It's also crucial that management understands the importance of those frontline employees, because they are in direct contact with your customers and are the face of your business. You must empower them to make decisions that are in the best interest of your customers – and you must support their decisions. A service strategy is also the least expensive tool you can use to grow your business. Advertising is expensive and will only get customers through your doors the first time. It's a one-shot deal that can't guarantee they will return. But extraordinary customer service is so powerful that it will keep your customers returning time and time again. I constantly name Amazon as an example of how providing superior customer service can drive a company to great heights. Amazon spends hardly anything on advertising worldwide, because it doesn't need to. From its founding, the company has made customer service a focus and has never wavered from that commitment. It's a focus that permeates everything from speedy deliveries to free returns to the ability to contact customer service staff and get immediate help. Amazon describes itself as "earth's most customer-centric company," and I agree with that assessment. The proof is in the numbers. Amazon had sales of $574.8 billion in 2023, an increase of 12 percent or $60.8 billion over 2022. Simply put, Amazon is amazing. Costco is another company that is realizing great profits by focusing not only on price but on customer service. During the fiscal year ending September 3, 2023, Costco had net sales of $237.7 billion and a membership renewal rate of 90 percent, resulting in $4.6 billion in membership fees. The company operates in 871 locations, has 316,000 employees, and focuses on a blend of price, quality, and customer service. In order to drive a customer service strategy, you must value your customers – and your employees. Invest in your employees by training them to provide the best customer service possible, and by supporting their efforts. When you train them, you're saying, "I value you." This is critical, because how you treat your employees is exactly how your employees will treat your customers. Exceptional customer service is the most powerful and least expensive tool you have at your command. Use it and you'll see your business grow to great heights. Visit www.customer-service.com for more information on John Tschohl and the Service Quality Institute. John Tschohl Customer Service John Tschohl is the founder and president of Service Quality Institute, a global leader in customer service. He is considered one of the world's foremost authorities on all aspects of customer service, and is the author of several books including Moving Up: A Step-by-Step Guide to Creating Your Success. His monthly strategic newsletter is available online at no cost at www.customer-service.com. SERVICE STRATEGY: THE MOST POWERFUL TOOL YOU CAN HAVE RO

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