“I could never be in sales. I just don’t feel comfortable trying to convince someone to buy things!”
“Salesmen are sleazy! After the sale, when it comes to service, they’re nowhere to be found!”
“I dropped my account with The Lousy Service Company because of poor service; but when I call Good Service, Inc., the customer service is wonderful!”
Sound familiar? Ever uttered or heard those comments? Why do you choose one company over another? Is it only price? Is it only service? Is it a combination of price and service? How much price difference will make you leave a company that gives poor service at a lower price and begin doing business with another company whose price is higher but whose service is measurably better?
What is the relationship between quality of customer service and generating sales? Regardless of protests otherwise, Service is Sales. Regardless of the number of times a salesperson dismisses the Customer Service team as “the others”, or the number of times the Customer Service team buys into the myth that they are not in sales, Sales is Service. Service is Sales. We all prove that every day by where we choose to spend our money.
Jan Carzon – ‘Moments of Truth’
Jan Carlzon, in his book, Moments of Truth, demonstrated the value of excellent service as a selling tool. When he took over at SAS Group, the parent company of Scandinavian Airlines, the airline was losing more than $17 million a year and facing financial difficulty. They were ranked a dismal 14th of 17 European airlines in on-time performance. A year later, after Carlzon had initiated a “Putting People First” strategy and empowered front-line employees to resolve service issues without cumbersome upline approvals, SAS had posted a $54 million profit and was recognized as the most punctual airline in Europe.
Carlzon posited that every customer encounter with a company is a “moment of truth,” and that in each such moment, the customer decides again whether or not to continue the business relationship. Though he refers to the end-user, the retail customer, the same is true of B to B interactions on a much larger scale.
Poor Service Costs Sales
For example, a couple of years ago, while training insurance agents for a test required annually for those who enroll clients in Medicare Advantage Plans, I had the most unpleasant experience with what was then the primary and most recognized testing company for that certification. They were, in fact, so dominant in that segment that for all practical purposes they had no competition.
However, their customer service was practically nonexistent, unreliable, and even sarcastic at times.
Because of the large numbers of agents we were enrolling, I expected that after several customer service fumbles, they might make a serious effort to correct the many errors we encountered. I suppose I expected them to make a serious effort at improvement without having to threaten to take my business elsewhere. Surely, even a return phone call from an account rep would have helped. There had been so many mistakes in one class that four agents lost their positions because they were unable to complete the testing requirements. Phone calls to the company’s service team often went unanswered, promises for call-backs were not kept, and instructions given to correct the problems often were incorrect. Twice agents who completed tests weren’t credited with completion. The final straw was when the company fabricated a cover story about the complaints, but wouldn’t listen to the call recordings.
The following year, we enrolled over 500 new agents in a competitor’s program, costing the original company more than $50,000 in enrollment fees. That meant the sales effort of the original salesperson were lost, and we were not open to future sales attempts from that company.
Each interaction with that original company was a ‘moment of truth.’ After several unpleasant and unsatisfying moments, we decided to quit giving them our business and our money.
“Putting People First”
The point that Jan Carlzen made in his book – and the basis upon which he was able to effect such a dramatic turnaround at SAS – was that each customer interaction with a representative of a company is a selling interaction, whether it is with a salesperson or a customer service representative. When the interactions are pleasant, and the price is competitive, the customer will begin or continue to do business with the selling company. Even if occasionally a customer’s experience is less than stellar, the “Recency Effect” will still keep them as a customer unless the most recent experience is particularly egregious.*
Carlzen’s “Putting People First” strategy focused on those interactions, beginning with a customer’s initial contact with a front line person, from ticket agent to cabin attendant. He also believed that all employees are responsible for delivering first class customer service, from those in direct contact with the customer to the mechanics who performed maintenance. By his estimation, since each customer experienced an average of five contacts with an SAS employee, that meant over 50 million “moments of truth” for their customers each year. Each moment was an opportunity for the customer to decide to continue doing business with SAS or to begin looking at one of their competitors.
Sales and Service Depend on Each Other
The logical progression of each employee being responsible for delivering quality service is that the person delivering the service must be empowered to do so, and that required an additional shift in management philosophy, a subject better suited for a different discussion.
Where does this lead and how does it make Customer Service staff responsible for sales? How does it prove that salespeople are also responsible for delivering good service?
While salespeople and customer service people alike often separate the two functions, in reality they are interdependent. One cannot long exist without the other.
The Customer’s Buying Decision
When a salesperson makes a promise to the client, whether it is about the quality or performance of the product or about the company (s)he represents, it creates expectations. A future “moment of truth” will occur when the customer calls for service. The experience the client has with the customer service representative will either reinforce to them that they made a good buying decision, or it they will feel that the salesperson ‘oversold’ the product or the quality of service they could expect. That is a ‘moment of truth,’ and the customer will make a new buying decision after each customer service contact – either to continue or stop doing business with the company.
In the sales interview, besides considering the impression the salesperson makes about themselves and the product or company, the customer is weighing whether the benefit they expect to receive from a purchase of goods or services is equal to or greater than the cost of receiving those expected benefits. Cost, of course, can be measured in dollars, but also in reputation, prestige, time, or other values. If the customer perceives that the promised benefits will outweigh the cost, then they are favorably moved to consider the purchase. Part of that ‘moment of truth’ depends on their perception of the salesperson’s professionalism, their knowledge of the customer’s needs, wants and desires, and their truthful representation of the product or service. They weigh that decision again each and every time they deal with the company’s customer service team.
Under Promise; Over Deliver
It is sometimes heard in customer service centers that certain salespeople exaggerate or ‘over promise’ the quality of the product or its suitability for the customer. While this should never be an excuse for giving poor service (and blaming the salesperson only sets up an “us / them” conflict while doing nothing to improve the customer’s experience), it puts in focus the role that a salesperson has in providing good customer service. Deliberately promising more than the product or service can deliver has created an unfavorable ‘moment of truth’ before the customer is even aware of the failure. The inevitable result will be an unhappy experience which the salesperson may feel they escape because they will not have to be the one facing the customer’s wrath on a future phone call. Eventually those moments of untruth do come back around and catch up with the unethical salesperson, but along the way they cause unnecessary grief not only to the customer, but to the customer service staff who will be tasked with making the customer happy; to the company whose reputation will suffer, and eventually even to their industry and to themself. This can be illustrated by the perception that some customers have expressed about the insurance industry as a whole, based upon a single poor experience they or an acquaintance had at one time.
On the other hand, excellent customer service delivered by empowered, highly trained, professional CSRs actually result in additional sales, and easier sales for the salespeople. A company’s reputation for employing top-notch customer service teams gets around as existing customers talk to potential customers. How many times have you chosen to consider an automobile purchase at a dealership based upon the glowing reports of outstanding service given you by a relative or friend? Sure, if the price at that dealership is substantially higher, you may still decide to buy at a different dealership; but what made you even consider the one your friend or relative bragged about? Wasn’t it your friend’s glowing report about how they were treated and the consistently reliable service? And if the price differential is modest, you may have choose to spend a small additional sum in order to avail yourself of that future promise of satisfaction! The same is true whether buying insurance, clothing, or even groceries. I recall once when remodeling my kitchen, deciding to spend a bit more at one store for my cabinets simply because a person of authority in the more stylish European-designed store told me point-blank “we don’t need you to tell us how to grade our customer service.” Pardon me, but the customer is the ultimate grader of customer service! My money spent quite well at the store where the salesperson and the service was far more pleasant.
That being said, Service Is Sales! Every time a customer is emotionally satisfied – or even Wowed – by excellent service, they recreate the experience and the satisfaction of ownership and they buy the product and the company all over again. Although CSRs may not see themselves as salespeople, they most assuredly cement sales already made through the ‘moments of truth’ they provide. Through recognizing and attempting to meet the wants, needs and desires of the customer they create future sales, repeat sales. They make the life of the sales force more productive and fulfilling, not to mention more profitable. CSRs create the sale after the sale, and are a critical function in the sales process.
Equally, salespeople are also responsible for delivering good service, establishing the right expectations with the customers, and setting up the future customer service interaction for success and satisfaction. When the ‘moments of truth’ expectations created at the point of sale are met or exceeded by the ‘moments of truth’ experienced with a customer service professional, the sales cycle becomes replicating and the more sales that result from that paradigm, the greater the success for both halves of the team.
Sales Is Service; and, Service Is Sales. Like any team activity, the entire team wins or loses together. Every player on the team must see themself as part of the whole and create positive “Moments Of Truth” for the team’s success.
*The “Recency Effect” means that our most recent encounter with a person or company will hold more space in our memory than those further in the past. So a bad experience today will impact our opinion more severely than a few good experiences from six months or a year ago, and vice-versa. However, as the recent experience recedes into the past and others replace it in recency, those now more recent experiences – good or bad – influence our opinion more than the ones fading in memory.