National Post

May 26, 2008

Carving piece of customer pie

by Deena Waisberg, Financial Post

It saves to retain clients, rather than attract new ones

Gail Watson was surprised and delighted when she received a big apple/cherry pie and a note apologizing for a missed appointment from Nurse Next Door, a Vancouver-based elderly home health care company. While she was initially upset about the missed appointment, the company's prompt apology and "humble pie" helped turn Ms. Watson into a loyal customer.

"It's unusual to see such a proactive approach to customer service today," Ms. Watson says.

Yet, poor service is often the norm. In a recent customer loyalty poll conducted by Ipsos Reid, only 62% of respondents said that they had received great customer service in the past month.

Poor customer service can kill a company's reputation and sales, which is critical for small businesses since they can't always compete on price or selection. But delivering good service is more difficult than writing it into a mission statement.

Customer-friendly policies are a good place to start. "We want to make it easy for customers to shop with us," says Jon Dyer, co-owner of BabyGuru.ca., a Mississauga, Ont.-based company that sells a wide range of baby items.

BabyGuru.ca will not only price match ‹ as long as the item is not priced below wholesale cost -- but will also send the customer a small gift or gift voucher for her trouble. Additionally, BabyGuru.ca offers free delivery with a purchase of $150 or more and promises a "no-hassle" return policy with no re-stocking fee.

It can be tough, though, to deliver great service with limited resources, admits Mr. Dyer. He says that even though BabyGuru.ca aims to get back to customers within 48 hours and even has extended hours (10 a.m. to 9 p.m. ET), sometimes the staff of three gets swamped and the wait time can be longer.

That's why companies that control their growth, such as Vancouver-based shoe manufacturer, Holeys, have better control over customer service. In the early days of its business, Joyce Groote, president and CEO of Holeys, decided to pass on some attractive contracts and restrict growth to ensure that the company had the infrastructure in place to re-fill orders for the product in a timely manner. Ms. Groote insists orders be processed in one day and shipped within five working days. The strategy paid off.

"The retail stores feel confident that when they put in an order they're going to receive it and when the customers walk into the stores looking for

the shoes they'll find them," Ms. Groote explains.

But when a company grows, maintaining personalized service continues to be a challenge. That's where technology can help. Customer relationship management (CRM) technology was the answer for Langara Fishing Adventures.

The company, which offers fishing adventures off British Columbia's Queen Charlotte Islands, prides itself on knowing its customers, but as the company grew to entertain 3,800 guests a year, it was more difficult to maintain personalized service.

A CRM system allowed Langara to record not only the contact information and last visit of each customer, but also their size of fishing jacket and pants (that Langara supplies), and personal preferences or requirements.

"If a guest calls to book, the CRM system can show us he's a diabetic, or he wants his fish cooked a certain way, or he can't have down feather pillows in his room," says Karen Trapp, a sales representative at Langara.

Langara believes the system helped boost the rebooking rate 10%. "The customers love it, because we already know their preferences and don't have to waste their time asking them to explain again," says Ms. Trapp.

But even with the best policies, strategies and technology in place, mistakes still happen. How the mistake is handled can save or ruin a customer relationship, Nurse Next Door's John DeHart discovered.

Mr. DeHart recognized that his employee's spontaneously gift of a humble pie to a client was a powerful gesture and adopted the practice for the company.

He estimates that last year Nurse Next Door spent $1,500 on humble pies, but saved about $100,000 in sales.

"It's more about keeping clients than a question of whose fault it is. The value of lost clients is very high. It's more expensive to get a new client than retain an existing one," Mr. DeHart says. And satisfied customers share their experience with friends and family. 

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