1. 14-1

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

3. Chapter 14 14-3

4. 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 14 14-4

5. 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

6. 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

7. 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

8. 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?

9. 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

10. 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

11. 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.

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

13. 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. 14-14 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.

15. 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

16. 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

17. 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?

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

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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

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

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

32. 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?

33. 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

34. 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

35. 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

36. 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

37. 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”

38. 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

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

40. 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

41. 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