Added by on 2012-09-20

If you have ever wondered how small companies with limited resources and sales budgets compete against larger, more resource-rich firms, the first thing you should take a look at is how they service their customers.

When you do, you will notice that quality and service are their number one priorities. This is not by chance. Competing with a larger company on price alone is like banging your head up against a brick wall.

There are many reasons why people buy a product or service. Although price is a big factor in the equation, it is not always the primary one and certainly not the only influence.

If a prospect believes that your company offers superior quality and customer service, price may become a secondary concern.

A  study found that: “In the long run, the most important single factor affecting the performance of a business is the quality of its products and services, relative to those of competitors”.

Companies which ranked high in perceived quality and service earned, on average, a 32 percent return on investment and 14 percent on sales compared to a 17 percent return on investment and 7 percent return on sales for companies which ranked in the lower percentiles of the study.

The study is not the only indicator that quality and customer service are primary purchasing factors which help a company out-perform its competition.

Clearly, customer service is an effective marketing strategy when it comes to providing a competitive advantage.

For small businesses, this type of competitive advantage can spell the difference between success and failure. Take for instance the retail banking industry again. With all the large banking chains dominating the industry, you might think that small local banks would have met their demise a long time ago.

Well, they are thriving, primarily because of the service they provide their customers.
Let’s face it, competition can be brutal sometimes, especially when you are up against a big corporation. It is like David taking on Goliath.

Fortunately, as a small business you do not have to topple the giant in order to compete. You do however have to find their Achilles Heel. In the majority of cases this will be in the customer service area.

Develop a customer service strategy

Effective and memorable customer service involves many skills and techniques which should be an integral part of your operation from product development, marketing and providing after-sales service.

Too often, companies think of customer service as the provision of support after a sale and many do that poorly. That is a misconception.

Good customer service begins from the moment you sell the product. If you sell a product that is consistent with the needs of the market and produce it from a quality standpoint, then the after-sales support required for it should be minimal.

When developing a customer service programme, consider the following:

If you sell a product, you should be providing your customers with something they want or need. That means establishing good stock control.

Provide your customers with information they need about your product, company or service

Fulfil your promises. Whether you sell a product or a service, your customer expects certain things from you according to what you or your advertisements have promised.

When your customer is dissatisfied or upset, you must take immediate steps to solve the problem.

Customer service should be an integral part of your employee training programme. You will not be on the floor all the time dealing with irate customers – your employees will.

They will be much more effective at keeping the customer happy if they are well-informed and well-trained. It also helps if they are well-compensated, but that is another story!

Let us begin at the beginning. You have a product to sell – clothing, for example. Customers buy clothing because they need it (for protection from the elements, because society dictates that we must wear clothes) and/or because they want it (style, pride of ownership, projecting an image, etc.).

Either way, the object is not to sell your customers on the necessity of clothing (they already know that), but to attract a clientele who will patronise your store again and again.

One way to accomplish this is to observe what sells well and what does not. Do you have a lot of requests for something you do not carry? Are the garments on the size fourteen rack selling out consistently, while those on the size eight rack remain? Do most customers head straight for the sales rack, or is their eye caught by the newest suede jacket in the front of your shop?

Make mental notes of any patterns of this nature that you see, better still, write them down. Any time you respond to your customers’ actions and reactions, you are tailoring your business to suit their needs.

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