Today we are going to discuss how excellent customer service and the wow factor will produce referrals and improve your bottom line…even when that is not necessarily your purpose.
The Supreme Value of Referrals
Every business, every leader, and every salesperson should aim for outstanding customer service–if for no other reason (and I’m citing many) to build sales results through referrals. What could be a bigger win or a bigger business-driver than having customers actually call seeking your services, or receiving “free,” pre-filtered names of likely, receptive customers from trusted friends or family members?
Outstanding customer service makes all your staff feel good. Everyone loves great feedback. Your customers feel great and valued and will not think of going to your competitors, and most importantly they will become raving advocates.
Your likelihood of building a solid, expanding referral channel is directly linked to your success in consistently exceeding customer expectations. In many cases, this means providing requested assistance outside what you “normally” provide.
For example, I recall a situation when a customer entered our bank and asked for help in completing pension papers because he could not read or write English. One of our planners, Karen, took the time and made the effort to fulfill the request. Further, she took the extra step of posting these documents to the appropriate pension office and attaching a note with her contact information in case questions arose. Soon afterward, Karen began receiving direct referrals from many of this happy customer’s non-English-speaking friends, and these referrals enabled her to generate significant new business.
Exceptional Memorable Service
Exceptional, memorable service–successfully delivering your wow factor and creating a magic moment–is a nearly certain way of generating referrals. This commitment is incredibly important and valuable. If you do not have a wow factor that everyone in your business is aware of and are passionate about delivering, then you need to have meetings with your team to uncover it. Wow factors will be different in all businesses–what you want to aim for is an extraordinary experience, one in which the customer exclaims, “Wow!” and does not wait a moment to refer family and friends to your business.
Create a ‘Wow’ budget
Many years ago in his butcher shop, my father concentrated on finding wow factors. He had a ‘wow’ budget, into which he set aside weekly a significant sum to spend on wowing customers. He received many new customers by slipping in at no cost more expensive cuts of meat to orders of those customers ordering the cheapest variety of meats. These people would call back. “Mr. Wright, you made an error,” they’d say. “We did not order or pay for the T-bone steaks in our meat order.” Dad would say, “There is no error. You are a great customer and I wanted to wow you.” When he started this practice, it was not intended to produce new customers; Dad was genuinely looking after his existing customers, but he was shocked at the amount of new business this service generated.
It goes to show that givers receive more in life, while takers eventually get caught up. Life has a perfect accounting system!
Ask for referrals
The second most important rule on this topic is to instill the practice of asking for referrals in all your representatives. The absolute best opportunity to ask for referrals occurs whenever you receive a customer compliment.
These opportunities should never be missed because they can be seized subtly and engagingly, with no extra time investment. Remind your salespeople (and other representatives) frequently that if a customer says, for example, “You made this process so simple, and handled all our concerns so well,” they must respond appropriately.
The best response to a compliment is to say, “I love receiving compliments. It really makes me feel great about the service we provide, and I’ve truly enjoyed doing business with you as well. The best compliment we ever receive, however, is when you refer your family and friends to us, because that’s how we build our business and continue to have such fulfilling encounters with people like you.”
The next step? Stop talking–and wait for a response. Try this simple technique, I guarantee it will improve your number of referrals!
Customer loyalty = Strong company financial performance
A Walker Loyalty Report was conducted in 2005 for the communications industry. It found a significant correlation between customer loyalty and company financial performance, which echoed findings from past studies of other industries. The study included wireless services, wireless handsets, Internet service providers, local voice, and long-distance voice. The report found that companies who scored high marks in developing and maintaining customer loyalty experienced an average of 20% more revenue growth than those companies with lagging customer loyalty scores. Loyalty leaders had an average operating margin of 22% higher over three years and stock prices were elevated 34% over five years when compared to customer loyalty laggards (Marr, 2005).
This study was also done for the information technology industry and the findings were similar. The Walker Loyalty Report found loyalty leaders experienced 45% more revenue growth, 23 % higher operating margins, and 26% increase in stock prices in comparison to those companies lagging in customer loyalty scores (Marr, 2005).
I hope you gained an important lesson on customer service and the wow factor from this blog post. I hope to hear from you in the future.