Saturday, December 30, 2006

Wisdom from Dr. Dan

I was interviewed this morning by business expert Dr. Dan Strakal, host of the syndicated radio program “Business Buzz”, ( about techniques for managing customer situations. Dr. Dan prepares very well for his shows, and at the beginning of our program he rattled off a treasure trove of statistics from various sources about the impact of high service quality. For example:

-Customers are 5 times more likely to leave a business over service issues than they are over price or product issues.

-Firms with measurably higher service quality are able to charge substantially higher prices for their products or services.

-High-service organizations increase their market share by an average of 6% per year.

One of the most fascinating things he mentioned had nothing to do with growth or profits, however: namely, the strong correlation between high turnover and low service quality. In other words, bad service doesn’t just chase away paying customers; it also chases away the people who are cashing your paychecks.

This makes perfect sense, in that people who lack the communications and leadership skills to handle service situations invariably experience a lot of customer anger and resentment in their daily jobs – and probably feel like they are being left to twist in the wind by their management. And in my experience, all the pay raises and benefits in the world won’t fix the problem.

The irony is that this problem can usually be easily and cheaply fixed by investing in solid, skills-based training on communications techniques – and the impact on your morale, turnover, and bottom line are often nothing short of incredible. Make sure that whatever approach you choose focuses on specific techniques rather than platitudes, and can be customized to the unique customer scenarios of your business. (P.S. If you don't know where to start, check out Put this on your business shopping list for 2007, and watch what happens in your organization!