Small Business Advice: Aim for Testimonials, not just Profits
Small businesses in Singapore face more uncertainties and competition than ever before. In addition, the dynamics between consumers and businesses is changing. Consumers have more collective power over businesses and are now more discerning and demanding over what product or service they want.
In fact, in the age of social media, word-of-mouth can cripple businesses in record time. Warren Buffett quoted that “it takes 20 years to build a reputation and five minutes to ruin it”. Businesses can no longer make big mistakes and compromise on their service without expecting a huge backlash against them.
SMEs and start-ups have to be consistent and create customer loyalty for their products to ensure they keep afloat in turbulent times and thrive in bullish conditions. It is, therefore, very important for small businesses to create a positive customer experience by putting customer service high up in their priority list. According to a Walker study, customer experience will surpass price and product as the key brand differentiator by 2020.
Zappos, an American online retailer, is a great example of the impact of great customer service. It achieved $1 billion in sales in less than ten years because it focused more on how satisfied a customer is at the end of a service call, and less on efficiency. It believed that "when money goes back into the customer experience, customers will do the marketing for you". In fact, 75% of Zappos’s purchases come from returning customers.
Leveraging on excellent customer service is also the best way to gain referrals from existing clients. Small businesses rely heavily on referrals for growth because people tend to choose the products and brands that the people they trust recommend. Since small companies do not have large brand equity like multi-nationals, word-of-mouth and referrals become more crucial; as it reduces the perceived risk of buying from them.
Given the importance of customer service and getting testimonials, how then can small companies be more customer-centric? Here are some tips:
1.Embed customer service in the business culture and core values.
It is important to include customer service in the company’s core values or mission to take the first step in sending the message across the company that it is taking it seriously.
The top management still also need to educate the staff and give them the framework required to practice positive service with customers. Only by consistently driving the message across and “practicing what they preach” can the company create a culture of customer service and deliver customer service most effectively.
2.Treat team members/employees well.
Employees are the members of the team that directly communicate with the customers on a regular basis. They therefore hold the power to directly influence the customer’s overall experience with the brand. An angry or mistreated employee will likely pass on the anger or poor treatment to the customers.
Taking care of employees does not mean spending lavishly on them with expensive dinners or overseas trips. Rather, it is in the small acts such as celebrating their birthday, making time for company meals, or applauding them for their great work that will make them happiest.
3.Ask for feedback.
Small businesses often do not realise how important it is to gather constant feedback of their offerings. In fact, by not doing so, they are shooting arrows in the dark. Business owners need to view the product in the eyes of the customers to truly succeed and make the best product for the customers. They need to understand the customers’ perception of the purchasing process, product and after-sales, and act on the negative feedback swiftly. Even a minor positive change to the product or the purchasing experience can dramatically boost sales and customer satisfaction.
In the end of the day, it’s the businesses that think about the long-term and building a solid relationship with its customers, rather than on short-term profits, that will succeed. Viewing customers as humans and not a number in the income statement will ensure that businesses create a a win-win situation for their customers and themselves. Peter Drucker once quoted,” Quality in a service or product is not what you put into it. It is what the customer gets out of it.”