You run a small business, and you have been hearing a lot about the importance of personalized customer service. “You are not sure what this means, or whether it will increase your profits, but you want to find out more. First, what is personalized customer service? How do other businesses provide this? How have other businesses profited from this? Do hidden costs exists? Overall, is personalized customer service worth providing?   

Personalized customer service

 Personalized experiences are a hot topic these days. Certain types of businesses have become very skilled at delivering personalized service.  What is meant by personalized? It has the meaning that every person who receives support, whether provided by statutory services or funded by themselves, will have choice and control over the shape of that support in all care settings”. Customer service is the process of ensuring customer satisfaction with a product or service. Often, customer service takes place while performing a transaction for the customer, such as making a sale or returning an item. Customer service can take the form of an in-person interaction, a phone call, self-service systems, or by other means. (Define customer service in your own words? What does it mean for you? - Bayt.com Specialties) 

Thinking about the hotels, from the moment entering in the hotel how they greet their customers, giving all the services possible to them makes the hotels to have a good relationship with their customers. Treating them perfectly, this is spreading in other industries also especially in a retail industry. When a customer walks into a retail store, the salesperson has two choices: simply ring up a purchase, or truly help the customer get what he or she really needs. New research proves that consumers are expecting, if not demanding, highly personalized experiences. And the good news, for those businesses that can deliver, is that customers are typically willing to spend more when they receive such custom-tailored service. They want personalized recommendations. Customers are willing to spend more money, and the companies that make the effort to deliver a personalized experience win. Based on the results of a survey which is conducted to 1000 customers here are the results; • Personalization drives impulse purchases • Personalization leads to increased revenue • Personalization leads to fewer returns • Personalization leads to loyalty   How do other businesses provide personalized customer service? There are many ways on how the companies provide the personalized services to their customers. And when the companies sell their products and services, they typically target the largest opportunities first and the smallest customers last. The logic behind this is trying to generate the highest return on the investment.   Get to know your customers by name – which leads toward to the first impression.  Knowing and using your customers’ names sounds simple. But, the gesture makes a major impact when it comes to building trust and relationships – There’s a reason why companies like Starbucks put so much emphasis into knowing and calling their customers by name, especially those who are loyal. Recognize and reward loyal customers When a repeat customers stops in, consider giving him or her a spontaneous discount for their continued business. For instance, a coffee shop might give a repeat customer a free cup of coffee one day. Simply say, “Thanks for being a loyal customer. Your drink is on the house today.” Reward customers for valuable feedback   Encourage customers to give feedback on both good and bad experiences so you can improve procedures and customer satisfaction. Ninety seven percent of consumers are more likely to be loyal to a company that implements their feedback. Consider rewarding customers for feedback that leads to changes, and give them credit for it on social media, your website and in a thank you note with a small gift certificate. Do business with your customers   If your customers own a business, consider frequenting their establishment or using their services. A lot of local business owners belong to associations or chambers of commerce. As you meet business owners and network with them you can support each other.   Educate your customers with free tastings, classes and demonstrations   Personalized service includes teaching customers new skills. Consider offering classes, workshops, webinars or tastings that add value to your customers’ lives. A bar might offer a class on wine pairing; a coffee shop can offer classes on brewing the perfect holiday beverages; and a salon could offer a demonstration on easy summer up-dos. Create a customer loyalty program   If you don’t already have one, implement an effective customer loyalty program. Eighty one percent of consumers are more likely to continue doing business with brands that offer loyalty programs and 73 percent of loyalty program members are more likely to recommend brands with good loyalty programs. (Personalized Customer Service is Powerful! Here are 9 Ways to Offer It)   How have other businesses profited from personalized customer service? Personalization is causing a seismic shift across the landscape of consumer-facing brands, and we are only starting to feel the shocks. Already brands that create personalized experiences by integrating advanced digital technologies and proprietary data for customers are seeing revenue increase by 6% to 10%, according to our research—two to three times faster than those that don’t. As a result, personalization leaders stand to capture a disproportionate share of category profits in the new age of individualized brands while slow movers will lose customers, share, and profits. Over the next five years in three sectors alone—retail, health care, and financial services—personalization will push a revenue shift of some $800 billion to the 15% of companies that get it right. (Profiting from Personalization)   

Is hidden cost existing in personalized customer service? 

Of course, every business understands the need to maintain a high commitment to providing excellent customer service. Oddly enough, some businesses still ignore the hidden costs of poor internal customer service. The reason is simple. Management doesn't even realize or acknowledge that internal customers exist.   Who is an Internal Customer? We define an internal customer from a business process perspective as any employee who has the authority to place constraints, requirements, or demands on the following aspects of the process:  

• When      it should start - what kicks it off
• How      it should be performed
• Who      plays a role in the process
• How      long it should take
• What      the outputs are
• What      is an acceptable level of quality for the outputs of the process
• What      should be done in the event of process failure

A good process analyst captures this information when processes are designed or refined. However, high performing businesses are moving into an era of DIY process improvement, leveraging nimble, cloud-based tools for workflow design and automation. In today's world, a business analyst shouldn't always be a separate role or an outside consultant. These skills need to be cultivated within the workforce itself so that workflows can be continuously improved by process customers and those who play a role in performing the process. Internal Customers are Everywhere There are some departments whose internal customers are the entire business! HR, Payroll, Security, Housekeeping/Maintenance, and IT serve every employee in the business at some time or another. At a deeper level, there are departments that are customers of other departments at an individual process level:  

• Customer      Service may be a customer of the Engineering department      when resolving product safety or defect inquiries.
• Marketing may      be a customer of Sales when Sales needs new content to drive      outreach, or new collateral to take to networking events.
• Payroll is      the customer of every manager who must approve employee time and      expense submissions before the pay run can start.
• Finance is      the customer of Accounting with respect to period closing      processes.
• Legal and Compliance can      be customers who place regulatory constraints on processes, but they are      often information providers of customers throughout the business who need      guidance in handling new situations or speedy review of pending contracts.

Hidden Costs of Ignoring Internal Customers If you consider the hidden costs of poor internal customer service, you will understand why your business needs to tighten up these interactions. There are direct costs, such as:  

• Fines      when a process does not fulfill regulatory constraints of the requirements      that Legal or Compliance places as an internal customer.
• Late      payment charges when a manager does not approve a vendor invoice when      requested by Accounts Payable as a customer.
• When      Engineering does not respond completely or quickly to Customer Service      about an expensive defective product, part, or assembly, there is a direct      cost related to the item returned. There may also be costs related to a      product recall if there is an issue with the design or an isolated      production batch.

Some hidden costs of poor internal customer service are less direct:  

• When      an accounting department fails to follow the requirements of      the Finance Department, public companies may need to issue a negative      earnings restatement. This causes the stock value to drop.
• When Marketing does      not respond to Sales and deliver new messaging or collateral there is a      lost opportunity cost of contacts who did not become customers.
• The Sales      Order Management team is an internal customer that requires the sales      team to hand them complete and correct order information. Delay in order      processing reduces cash flow, and may result in a customer cancelling the      sale.

Some costs are even less direct. An HR department that does not acknowledge or address employee complaints can cause high employee turnover. Shoddy maintenance or lax housekeeping can also factor into employee turnover. Most new employees take six to 12 weeks to become productive. Can your business afford that productivity gap? An IT department that blends development and support roles is often too constrained to provide adequate internal service levels. For an interesting read on this situation and how to resolve it, pick up the Phoenix Project.     

Is it worth proving? 

So, if a company is not delivering a personalized experience, it is time for company to do so. Knowing what a customer want and need could be the one thing that solidifies the decision to do business with a company. On the other hand, if you a company does not know their customer, that could be the one thing that drives them into the arms of the competitors!                  

References   

Profiting from Personalization

https://www.bcg.com/publications/2017/retail-marketing-sales-profiting-personalization.aspx  

Personalized Customer Service is Powerful! Here are 9 Ways to Offer It 

https://blog.fivestars.com/the-value-of-personalized-service-and-how-to-offer-it/   

Define customer service in your own words? What does it mean for you? - Bayt.com Specialties https://www.bayt.com/en/specialties/q/337932/define-customer-service-in-your-own-words-what-does-it-mean-for-you/      

 

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