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Service and Follow-up for Customer Retention Chapter 14 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

Chapter

Main Topics The Business Tree of Life: Service The Importance of Service and Follow-Up Building a Long-Term Business Friendship Relationship Marketing and Customer Retention The Product and Its Service Component Customer Satisfaction and Retention Chapter

Main Topics Chapter 14 Excellent Customer Service and Satisfaction Require Technology So, How Does Service Increase Your Sales? Turn Follow-up and Service into a Sale Account Penetration Is a Secret to Success Service Can Keep Your Customers You Lose a Customer—Keep on Trucking 14-5

Main Topics Chapter 14 Increasing your Customer’s Sales Returned Goods Make You a Hero Handle Complaints Fairly Is the Customer Always Right? Build a Professional Reputation 14-6

14-7 Words of Sales Wisdom and Proverbs  Sales Proverbs! Examples are:  You do business with the one you trust and you trust the one you know  Obtaining new customers and selling more products to present customers are the ways to increase sales  It is always easier to sell a satisfied customer than to an unsatisfied one or a prospect  The cost of acquiring a new customer is more costly than keeping a present customer

14-8 Service–What Is It?  Which of the following is the meaning of customer service as discussed in the “Service and Follow-Up for Customer Retention” chapter? 1. Service is part of a product, such as insurance or advertising? Or 2. Service makes a contribution to others?

14-9 Correct! Service Refers To:  Making a contribution to others such as our customers  In Chapter 1 we defined “service” as part of a product, such as insurance or advertising. Most of the text refers to service in the context of helping others, and that is the emphasis of this chapter

14-10 What Is the Difference between Service and Follow-Up?  Follow-up refers to maintaining contact with a customer in order to evaluate the effectiveness of the product and the satisfaction of the customer

14-11 What Is A Business Relationship?  A relationship revolving around business issues  A business relationship much like a personal friendship  Trust and wisdom in a relationship (personal or business) grow over time.  Years may pass before an intimate friendship develops between buyer and seller.

14-12 Exhibit 14-3: Trust and Wisdom in a Relationship Grow Over Time Acquaintance High Low Trust HighLow Wisdom Friend Intimate Friend

14-13 The Product and Its Service Component  Customer service – refers to the activities and programs the seller provides to make the relationship satisfying for the customer. Here are some customer expected services:  Product – the product purchased has no defects  Price – fair value for the price  Place – the product is available when, where and as promised  Promotion – correct, honest information in advertisements, from sales people and on product labels  Exchange Transaction – handled correctly, quickly and professionally the first time  After the Sale – warranty honored, repairs/exchanges made cheerfully; good product assembly and usage instructions  Expectations determine service quality  The customer’s expectations being met determine the level of satisfaction

14-14 People Buy the Product Plus What?  A product is a bundle of tangible and intangible attributes, including packaging, color,and brand, plus the services and even the reputation of the seller.

14-15 So What Would Be Meant by the Term “Product Plus?”*  The product is a good or service  “Plus” refers to the other attributes of the product as described in the definition

14-16 “Plus” Also Refers to Such Things As:  Product has no defects  Price is fair  Product is available when needed  Correct, honest advertising  Warranty honored

14-17 In a Business Friendship, How Can You:  Mistreat a person you consider a friend?  Be uncaring, sad, pushy, impatient, rude, unethical, untruthful, self-centered, and/or emotional?

14-18 Customer Satisfaction and Retention  Customer satisfaction; refers to:  Feelings towards purchase  Customer retention – if satisfied, they will buy again

14-19 Exhibit 14-4: Customer Retention: When the Buyer is Satisfied with Purchases Over Time

14-20 So, How Does Service Increase Your Sales?  You increase sales by obtaining new customers and selling more to present customers  Satisfied customers will provide customer referrals – W.O.M. is critical  Thus very important to service for  Future sales  Referrals

14-21 Exhibit 14-5: Sales Come From Present and New Customers Salespeople are constantly involved in follow-up and service in addition to planning their next sales call on the customer; they also spend time prospecting

14-22 Turn Follow-up and Service Into a Sale  Convert follow-up and service situations into repeat or new sales  Follow-up and service help satisfy the needs of customers

14-23 Account Penetration is a Secret to Success  Account penetration  The ability to work and contact people throughout the account, discussing your products  Ex: if one department/division is buying my office supplies, can I “penetrate” other department/divisions also buy?  The greater you penetrate, the greater you chances of maximizing sales within the account  Determined by:  Total and major-brand sales growth in an account  Distribution of the number of products in a product line  Level of cooperation obtained  Your reputation as the authority on your type of merchandise for the buyer

14-24 Service Can Help You Keep Your Customers – How?  Concentrate on improving your account penetration  Contact new accounts frequently on a regular schedule  Handle customer’s complaints promptly  Always do what you say you will do  Provide service as you would to royalty  Show your appreciation

14-25 You Lose a Customer–Keep on Trucking  To win back a customer:  Visit and investigate  Be professional  Don’t be unfriendly  Keep calling

14-26 Increasing Your Customer’s Sales  Develop a customer benefit program  Have present customers buy more of a product than they currently use  Have present customers buy the same products to use for different purposes

14-27 Increasing Your Customer’s Sales, cont…  To increase sales with a customer:  Develop an account penetration program  Examine your distribution  Keep merchandise in the warehouse and on the shelf  Fight for shelf space and shelf positioning  Assist the product’s users  Assist the reseller's salespeople  Demonstrate your willingness to help  Obtain customer support

14-28 Returned Goods Make You a Hero  Cheerfully return merchandise following the company’s returned goods policies  It is in your best interest to return faulty merchandise

14-29 Handle Complaints Fairly  Customers may be dissatisfied with products for any number of reasons  “The customer is always right”  Occasionally a dishonest customer may require you and your company not to honor a request  Customers should get the benefit of the doubt  Take care of your customers

14-30 Is the Customer Always Right?  “Always” is the key word in the phrase

14-31 The Author of Your Textbook Feels The Customer is Not Always Right  Is he correct?

14-32 How Does One Know What is Right or Wrong in a Business Setting?  What can you use to make a morally ethical decision when dealing with a customer?  Company guidelines  Legal laws  What the boss says  What else?

14-33 Dress in Your Armor  You need to be prepared to meet a few unethical and dishonest people  They may ask you to do something unethical and/or dishonest

14-34 What is Meant by “Dress in Your Armor”?  Armor is something that will protect you, but from what?  You need protection from a person who is unethical and/or dishonest with you such as:  A customer or prospect  A competitor  A co-worker  Your boss

14-35 Your Armor Consists of:  Speaking the truth  Doing what is right  Readiness to discuss what is ethical  Trusting you know what is right, honest and ethical

14-36 Build a Professional Reputation  Be truthful and follow through on what you tell the customer  Maintain an intimate knowledge of your firm, its products, and your industry  Speak well of others  Keep customer information confidential

14-37 Build a Professional Reputation, cont…  Never take advantage of a customer by using unfair, high-pressure techniques  Be active in community affairs – make your community a better place  Think of yourself as a professional and always act accordingly  Provide service “above and beyond the call of duty”

14-38 Do’s and Don’ts for Business Salespeople  A survey of purchasing agents showed the most important traits that purchasing agents found in their top business sales people:  Willingness to go to bat for the buyer  Thoroughness and follow-through  Knowledge of the firm’s product line  Market knowledge and willingness to “keep the buyer posted”  Imagination in applying their products to the buyer’s needs  Knowledge of the buyer’s product line  Preparation for sales calls  Regularity of sales calls  Diplomacy in dealing with operating departments  Technical knowledge of specifications and applications

14-39 Exhibit 14-10: The Seven Deadly Sins of Business Selling

14-40 Summary of Major Selling Issues  Salespeople increase sales by obtaining new customers and selling more product to present customers  Customer referrals are the best way to find new prospects  By building a relationship and partnership, you can provide a high level of customer service  Customers expect service  To serve customers best, improve account penetration

14-41 Summary of Major Selling Issues, cont…  Always strive to help your customers get the best use from products you have sold them or to increase the resale of these products  Today’s professional salesperson is oriented toward service