Are You In The Service Industry? (HINT: We’re ALL in the service industry.)

Every now and then, I’ll see someone throw out the term service industry. Now there’s another one of those mis-used phrases and words. From my perspective, we’re all in the service industry.

The more I think about it, the more I realize that small businesses and start-ups are all about service. Yes, I said before that it’s all about storytelling but that’s what carries your service standards (or lack of them) further.

Think about this carefully: customer service is a huge part of what we do.. Without proper execution and end-to-end support, even the best design and systemization will fail. Knowing this stark reality, we see large corporations still getting it wrong and somehow coasting along. They’re always a quarter away from closing doors or being bought out for that very reason, I’d say.

So, yes, this is another one of my rants but I think this is a discussion we need to have, yes?

Good, you’re still here!

Let’s talk about how NOT to do service because we’re all in the service industry. If we’re not serving others, I’d say we are being mostly useless. Here are some areas I find many struggle on…

Managing Expectations

Here’s the #1 pitfall for businesses. Setting initial expectations can be easy but we forget that not everyone reads the fine print or understands things the way we do (we’re too attached to what we do, after all). This is where highlighting, acknowledging, and addressing the biggest customer concerns is huge.

I get turned off by businesses that make guarantees they do not plan to keep. It’s stuff that looks good on paper but does not deliver the goods. Warranties and service guarantees come to mind. Typically, the conditions to be met before your concerns can be “justifiable” are quite extensive, essentially rendering the proposed value null and void.

Making a false promise is worse than not making a promise at all.

Let’s look at Canadian bacon and what it teaches us. Depending on whom you ask, they may tell you Canadian bacon is really ham.. But others may say it’s the “real bacon”. What happens if you expect crispy American bacon and get the Canadian variety instead? This has happened to me when ordering pizza and I was not a happy camper.

Did I stop doing business with the restaurant? For the most part, yes. Too many other alternatives.. And cheaper ones, too! More importantly, the misrepresentation made me less likely to even mention the company, let alone recommend them.

This is a scenario where setting proper expectations would have made all the difference. The food was otherwise great, just not what I expected. All too often, businesses that do a poor job at managing expectations feel like they’re pulling a bait-and-switch on us.

Thing is, expectations go beyond pre-sales and the actual selling process. Once you made the sale, thank your customer for their business and give them the opportunity to openly share their concerns; otherwise, they’ll end up like me, grumbling to myself and reminding myself to order eat out elsewhere to avoid the disappointment.

The Lesson: Give your customers a place to be heard rather than trying to hide negative comments. People tend to feel more encouraged to speak openly when they’re part of a collective and can be anonymous. On the flip side, if they’re really disgruntled, they’ll want direct response and prompt resolution..

Customer Relationship Management

Muting your customers or just not listening is a wonderfully effective way to make them disgruntled and hurt relationships. Netflix is a good example of bad CRM as of lately.

I read an article recently about how Netflix employees are deleting customer complaints on Facebook around the clock. This is a bad move as it only makes your irate customers even more upset. When you build any relationship, you have to take the good with the bad. That includes accepting, if not welcoming, negative feedback.. And doing something positive with it.

Fortunately, Netflix can undo some damage with some simple fixes. They can secure exclusive content (though Starz seems to be out the door already). They can offer video games to DVD subscribers. They can do lots.

SIDEBAR: Since I initially drafted this article, Netflix share prices dropped by more than 30% and people are selling. When your investors lose faith, you know you mucked up on service and quality!

We’re not here to get into the whole Netflix debacle but there’s a powerful lesson there…

The Lesson: If you value the relationships, make others feel valued. Do the little things before you’re under the gun. It’s always better to be proactive than to go around fighting fires.

Selling Beyond The Sale

Let’s go back to service guarantees. What we do beyond the initial sale continues the selling process (yes, even after the balance is paid in full). These efforts support customer retention, lead to upsell opportunities, and convert customers from lukewarm buyers to supper hardcore fans (borrowed from @MattGron and @RobSearch).

My better half just reminded me of a favorite Garfield comic strip. I’m thinking about the one where every household appliance Garfield tries to use breaks down in a puff of smoke. When Garlfield checks the obligatory junk drawer, he notices all the warranties expired.

“Just as I thought, all the warranties expired yesterday.”

How often do you make a purchase only to regret it later on down the road?

For me, it happens all too often, whether I go with the cheap stuff or the supposedly high-quality (for a much higher premium) stuff. The support you get thereafter tends to be full of suck. I am a firm believer that companies should honor warranties just beyond the written terms when the problems arise due to known issues. If you sell defective stuff, expect people to go elsewhere, unless the price point aligns well with the expected duty or life cycle.. Or you provide exceptional customer service/support.

Product life cycles are often disregarded. The best products continue to throw in freebies like upgraded parts of lifetime warranties. That’s a good example of selling through your products (not just selling them).

Sure, this may not be profitable at first but happy customers can become your biggest brand advocates. Think of all the added sales and brand awareness that comes from an ecstatic, highly-satisfied customer.

Will you settle for happy customers or do you wanted them to be elated, never doubting their decision to go with your “thing”?

The choice should be obvious. As Seth Godin would say, you can be good or you can be remarkable. People don’t talk about (merely) good experiences, but they rant and rave about unique experiences, whether they’re horrible or fantastic.

Back to service guarantees, there’s good reason Consumer Reports, CNN Money, and other major consumer advocacy/reporting organizations advise against insurance and extended warranties. You have so many stipulations that, often, it feels like you just gave your money away for nothing in return.

The Lesson: When you sell beyond the sale, your products last virtually forever. You forge a legacy, not just a story soon to be forgotten. People will care more about you because you show that you care about them.

Truly Free Stuff

“Free stuff”, as we already know, isn’t always free. The time we invest is a price to pay. The information we give up is also payment. Sometimes, there are even hidden costs in terms of attachments, maintenance, activation, shipping, and more.

Robert Dempsey reminds us that we are not social media customers because these business entities make their money in other, indirect ways.

The worst free stuff would have to be the kinda things that are watered down, mostly useless versions of the premium versions. Please, don’t force the upsell. If your free version stinks, we likely won’t take the gamble with the premium, pro, or ultimate flavors.

The fear I always encounter when coaching my clients is that they don’t want to give up the “secret sauce”. They worry about not having something better to sell or the competition stealing their ideas so giving out free stuff seems counter-productive. These are all ungrounded concerns because, when you succeed in giving away truly free stuff, you become a more pervasive entity and people start to talk about you (often in good ways). Free publicity, anyone? Thanks, I’ll take two, please.

Even the best copycats cannot duplicate remarkable freebies 100%.

Anyone can make a better Facebook yet Facebook continues to grow, defying all odds. They give more and more for “free”.. But we all know it’s our demographical data that they are farming and selling to desperate marketers. Still, it works for them because they started out giving up the goods absolutely free. No catch.. At least not in the beginning.

Let’s look at some of the most popular ways that free stuff is delivered…

Loyalty Programs And Rewards

I’m going to go right out and say this: most loyalty and “reward” programs are crap.. And the rewards aren’t very rewarding.

When I think about crappy loyalty programs, Best Buy comes to mind. I don’t know if they’ve changed things recently but I stopped shopping there. Their points would expire and the 1% cashback that it basically translated to was hardly an incentive for paying 20-30% more for stuff that I could get elsewhere cheaper.. And locally, I might add. Epic fail.

Dangling carrots work but don’t give a carrot away only to snatch it away later. It doesn’t work with kids and it doesn’t work with us grown folk.

I’ve yet to see loyalty programs that really reward people. Most are drive by high volume purchases rather than return visits, and those driven by return visits tend to be cumbersome (think stamp cards, which are often forgotten or left elsewhere, rendering them mostly useless).

Seth Godin had an idea a few years ago that occured to me many a time before. Express lanes at supermarkets cater to those with only a few items but what about customers that consistently buy lots of stuff? The social signal places like Wal-Mart and Kroger’s give is, “If you buy lots of stuff, you can wait on the longer lines with everyone else.”

That doesn’t make you feel very warm and fuzzy, does it?

How bout we gamify these club memberships?

Member cards could have more value if you can “level up” (game mechanics strike again) and gain access to special perks and promotions the more you do certain activities. With computers being so advanced, I’m amazed that POS systems have not been adapted to better acknowledge return customers.

Heck, if you have to, use the teleprompter approach to walk your customer service folks through some simple guidelines. I don’t like scripts or empty small talk but, if you sincerely approach me and say something of interest, I’ll listen.

Now, I love video games and, though Play N’ Trade tends to have better deals and old school games to die for, I tend to go to GameStop more. Why? Because the staff remembers what I purchased and they help me re-affirm my purchases. We talk about insane boss battles, epic scenes, easter eggs, and future downloadable updates/expansions. That’s what makes me more loyal.

Ironically, I haven’t checked my points on GameStop PowerUp Rewards very much recently because you need a kajillion points to get anything good. I don’t buy tons of games. I don’t have the time so I am selective about what I buy.. Sadly, these fancy cards tend to be mostly wallet stuffers.

I’ll tell you who does loyalty programs right: Virgin Megastore. Their V.I.P. card not only earns you points but every purchase, big or small, prompts the staff to take your card and print out a new offer on the card itself. Offers are mostly random but they also take into account your purchase history, giving you stuff that really tantalizes you and making you aware of new releases and events on the horizon. Now that’s good game mechanics at work!

Now, I know not everyone has that sort of money to invest in their loyalty programs but scan cards aren’t super expensive and you can even go cardless by using an e-mail address to pull up customer records. E-mail addresses work well because it’s an opportunity to ask for the opt-in AND have a point of contact that likely won’t change for a long time.

The Lesson: Give rewards that inspire the right people, your real audience and influencers. Make your rewards meaningful and accessible while giving your customers something to shoot for. Offer more milestones so that there are goodies on the way to the awesome prizes. Make them feel accomplished and special when they get the goodies.

Level Up Your Service

As you can see, I have quite a bit to say about loyalty and reward programs. I think the easiest opportunity there would be to give away stuff randomly. Imagine making a simple purchase like buying some milk for your dairy-obsessed family (not that I’m speaking from personal experience). Then imagine your cashier saying, “You’re our lucky winner.. Here’s a $25 gift card!”

That there is game mechanics at work once again. I’d call that the rare loot bonus mechanic. Bonuses are things you get for doing stuff you already do. Think “value added”. With rare loot, you’re getting something randomly, likely because you’re grinding a lot. In the gaming world, grinding means you repeat a specific task or mission repeatedly until you reach a certain level or get specific drops/loot. More goodies – YAY! This almost feels like “something for nothing”, though we know it’s not.

We do mundane stuff like that every day so imagine if we were rewarded just for doing what we enjoy or feel compelled to do routinely anyway. I’d say I would be super excited! Everyone likes free stuff, even if we can afford the free stuff on our own. When we get that sort of acknowledgment and affirmation, we feel like rockstars!

I mentioned the level up game mechanic earlier. Consider how some credit cards have different colors as you are upgraded to higher credit limits and perks. That’s leveling up in real life. Spend more, level up more!

This works well because the cards are visible to all. It’s like having an achievement, trophy, or badge on a game.. The more exclusive, the more important you feel. Of course, this approach would not work with cardless systems (sorry).

Another game mechanic I am a huge fan of is deep customization. We tend to bundle products and services together to pack tons of value in. That’s fine and dandy but sometimes the a’la carte approach works wonders.

Cable television now comes to mind. Personally, I only want a few choice channels. Paying for a package that is mostly junk seems like a poor investment to me, though I understand the business logic. Now, let me customize a package and save a buck, then I’ll be excited.. Alas, that’s not the case and, well, I’m no longer a cable customer. Maybe I’m too hard to please. *wink*

Who gets deep customization right? I’d say Build-A-Bear Workshop. It’s always a wonderful experience going there with loved ones and creating unique gifts. When customer service lacks, you can at least feel satisfied with something that is completely yours, just the way you want it. If you look at the trends in custom jobs and modding, it’s plain to see that this game mechanic works!

The Lesson: Make your services fun to better engage your customers and give them something to talk about. Effective game mechanics give your key players visible milestones that make them feel like winners!

V.I.P. Fan Service

This may be all quite a bit to soak in but it’s really quite simple: HOW we deliver goods and services and WHAT we do beyond the sale is what differentiates us. Truly remarkable service makes your biggest fans feel like VIP’s in a world filled with bean counters, faceless entities, and thankless, forgettable transactions.

Do you make your customers feel valued with remarkable service, true quality, and/or bonuses? How?


7 thoughts on “Are You In The Service Industry? (HINT: We’re ALL in the service industry.)

  1. Wow Yomar. Your post is filled with a ton of great points and ideas.

    I could not agree more with your statement about HOW we deliver goods and services and WHAT we do beyond the sale is what differentiates us.

    There are a couple of key things that I focus on, when I’m delivering services.
    1) Made sure that I’m solving the current problem the client has. They might come to me with problem X, but really its problem Y that is causing problem X. When you take a holistic approach then you are truly giving value to the client.
    2) Its not enough to just deliver the solution, but to coach the client along the journey. Why I am doing what I am doing, and why its the best solution for the core problem.
    3) Being available after implementation as immediate as I was during it. Just because the check is paid, does not mean that they client is any less important.

    I know I’m hitting a cord when the client sounds surprised and they feel like their interaction with me brings their game even higher. Hows that for a lofty goal. 🙂

    • I love it! It’s always great when you hear the delight and pleasant surprise in a client’s voice. The beauty of it all is that most do not go “above and beyond” so there’s always opportunity to do a little more to create memorable experiences. YOU are your best product! 8)

  2. Great stuff here, Yomar.

    I’ve spent many years both working in the service industry and being at the mercy of bad service in many industries.

    As a “social” evangelist, I find that the resistance to integrating social media into the company reflects the reasons companies fall short on customer service.

    It’s the “us” versus “them” mindset that has permeated the industry for so long. Customers as a necessary evil. They’re essential for business, like electricity and water, but so much “needier”,
    They interrupt when you’re trying to do your book work or scheduling and mess things up with their special requests.

    Now social media is giving them more power.

    Examples like simultaneously giving a client a $25 “you win” prize is a great example of something fairly easy to do but doesn’t work in most cases because:
    1, managers don’t trust their employees and the promotion gets bogged down in paperwork and permissions.
    2. Managers/owners look at “losing” $25 instead of winning $2500.00 of potential future business.

    Vision is the point here. Those companies that have it, will be all over social media because they understand that service doesn’t begin and end at the service counter.
    Those that don’t will continue to make our consumer lives miserable.

    Thanks, have a great day and a spooky night 😉

    • Your assessment on social media reluctance is on-point, Ray! Some companies are at least honest enough to realize that they’re not honest enough to do social media right. ;o)

      Good point about free stuff.. Compliance and legal issues can be tricky but, when you consider companies that dump money into advertising and forget all about referrals and retention, it still boggles my mind!

      Like you said, a $25 gift card can turn into $2500 in business AND tons of exposure, so it’s a worthwhile investment. What we mostly see is the elusive 1% in play. 1% cashback on already inflated prices. 1% conversion rates (or less) doing the bare minimum.

      I suppose it’s a bit easier for small businesses to do these types of promos since we deal in far less volume than, say, you’re typical large or mega corporation.. Yet I feel everyone has easy opportunities if they get over the bean counting.

      Happy Halloween! I think I’ll be dressing up my avatars and leaving the costumes for the rest of my family this year. Haha ;o)

  3. Important points that Yomar makes.

    1. Give your customers a place to speak freely and openly about their experience. There’s no better way to learn what you are doing right and wrong.

    2. Respond to negative feedback with sympathy, concern, and an urgent desire to resolve a misunderstanding, faux pas, or [gulp] horrendous blunder.

    3. Support that sucks is not support.

    4. Reward your best customers according to their contribution- the people that act as brand evangelists and loyal fans.

    Did I miss anything?

    Recently on my blog: Letter to Occupy Wall Street Protesters

    • Hey Stan!

      I think that about sums it up. I nodded my head at the poor support part since, sadly, it still seems to be the standard.

      Have you read Seth Godin’s “Poke The Box”? It brings up similar points. I know you’re not a fan but this may be a must-read. In PtB, Godin says the biggest problem in life and business alike is that there is a lack of initiative. I agree.

      Poor support usually happens because companies wait for demands and complaints to stock pile before they take action, rather than seeking preemptive solutions, continued improvement, and speedy resolution. This book has really spoken to me because I think back to my days in the 9-to-5 grind. I always had ideas that would improve the companies I worked for but I sometimes did not take initiative because I felt I had to wait for permission. Of course, there’s the fears that it will draw flak or someone will steal your credit.

      Remarkable service boils down to taking action and, to a greater degree, taking risks. It’s better to try and fail than to fail even bigger due to lack of effort. There’s no coasting along anymore. Even so-called “niche markets” are highly-competitive. Being “good enough” is not good enough.

      Believe me, sometimes Seth says stuff that I don’t agree with at all.. But I listen to him because he knows failure better than most and, thus, he understands the price of true, sustainable success. On the flip side, we tend to look at winners and highly-successful people for advice sometimes yet that can often be the worst or at least incomplete advice. “Poke The Box” really gets ya thinking and, though some of the points are common sense, it truly changes how we look at competition.

  4. Pingback: Blog Soup 01.17.2012 How to curate people and other social media DOHs « The unofficial blog of Stan Faryna

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