Why Focus on Small Businesses Customer Service?

Small Businesses are the backbone of American business. They

• Represent 99.7 percent of all employer firms.
• Employ about half of all private-sector employees.
• Pay more than 45 percent of total U.S. private payroll.
• Have generated 60 to 80 percent of net new jobs annually over the last decade.
• Create more than half of non-farm private gross domestic product.
• Supplied 22.8 percent of the total value of federal prime contracts in FY 2006.
• Hire 40 percent of high-tech workers such as scientists, engineers and computer workers.

Source: U.S. Small Business Administration

• Excellent Customer Service is proven to be positively correlated with long-term financial success and growth (See benefits and Business Case below)
• Small businesses are typically underserved in the category of Customer Service delivery. While there are many Small Business Assistance Providers (SCORE, SBDC, and special-interest resources for Women and Minorities), they all tend to provide "general interest" and "basic / entry-level" assistance for specific categories such as starting a small business, general marketing, accounting and small business loans, government contracting, construction contracting, etc. None emphasizes the business benefits of delivering consistently Remarkable Customer Experiences as a sustainable competitive advantage.
• Small Businesses usually do not have the resources (money and time) to hire the big-name consultants and authors who provide industry-leading concepts and practices. Too often, small business owners resort to price cutting, cost cutting and other short-term expedients to win business — a model that does not provide long-term sustainability.
• Conclusion: Small Businesses will benefit from learning and practicing Consistently Remarkable Customer Experiences and notable Customer Service as a key sustainable strategic differentiator.

The Business Case for Customer Service

Dozens of research studies across virtually all industries over decades have produced consistent and conclusive results: Providing remarkable Customer Service is a winner in all cases.

• Increased Customer Loyalty — Satisfied Customers are significantly more likely to come back to do business with you in the future.
• Higher close rates — Companies that win high Customer Satisfaction during the sales experience sell to a higher percentage of shoppers.
• Positive Word of Mouth — Satisfied Customers not only solicit others to do business with you, their opinions carry more weight than your advertising.
• Price premiums — Consumers will routinely pay a higher price to do business with companies that have a reputation for high quality and consistently great Customer Service.
• Lower operating costs — High-satisfaction companies have lower warranty expenses and spend less on service recovery in general.

Sources: Gallup; American Customer Satisfaction Index

Note that Customer Service is a tactic used to reach a goal — it is not an end in itself. The real goal, normally, is to grow a Customer base that is loyal, enthusiastic and profitable. To achieve this result, the business delivers Consistently Remarkable Customer Experiences, of which excellent Customer Service is a key component.

//Richard Randolph

Florida Customer Service Institute

www.FloridaCSI.com