Is customer service important in a recession?

I have been wondering if the downturn in the economy will result in an improvement to customer service in the marketplace. Conventional wisdom dictates that as companies tighten their belts and look to ways to recapture falling profit margins it is still important to provide excellent customer service to entice customers and encourage repeat business.

But do consumers care about customer service in a recession?

During tough times some may think that price (and with rising gas prices, convenience) becomes the only important differentiating factor between firms. I don't think this is necessarily the case.

Customer service speaker (sounds like a great job!) Kevin Stirtz recently wrote: "Customers are smarter now than ever. They know the difference between a company that exists to help them and one that exists to pick their pocket." He was talking about the importance of creating a customer-centric service culture to create a sustainable business and I couldn't agree with him more. Today's consumer works hard for their money and realizes now more than ever the importance of a dollar. They are going to be far more willing to part with those dollars on an emotional level at a company that truly values their business.

In a great article Lior Arussy asks the question: "Why’d we ever focus on customer experience to begin with?" He lists multiple factors for why it is that we focus and customer service and shows that none of those factors change during a recession. If anything it is more important to keep a focus on differentiation due to service during a recession because there are fewer dollars chasing goods.

I am happy to report that I have been experiencing some great customer service lately. It seems like everywhere I go cashiers and sales associates are truly happy that I am spending money at there stores. This could be due to a few factors. Maybe employees have made the connection between reduced sales and a reduced labour force. You could help employees come to this conclusion but be careful not to sound threatening. Your good intentions could have a negative impact. A "times are tough and we are all in this together approach" beats "shape up, or ship out" any day.

It also seems like there are a lot of people taking positions that they are frankly over qualified for. Because of the rise in unemployment some workers are taking what they can get. These star employees provide excellent customer service while raising the standards of the team. Problems may arise when these employees are enticed to leave for better positions. When the economy is back in an upswing retention will become an increasing issue. Your customers will notice when their experience changes and will punish you for it.

I think that customer service is without a doubt important during a recession. This is a short run view though. What will really be important is improved customer service in a recession continuing through the business cycle, that is where a company will move from just floating to being sustainable and successful.

Wise Words

For those readers who have worked in retail and the restaurant industry you are likely familiar with the "team huddle". You may know this by a different name but chances are you have either been a part of one, or even conducted one. They are mini-meetings usually at the beginning of a shift where management can communicate important (hopefully) information. I have mixed feelings about these meetings, mostly because of how poorly I have seen them conducted. I think in theory they can have a positive effect on morale, but they can also serve to demotivate your staff (keep checking in for tips on how to improve the former and avoid the latter).

Many huddles end with a quote. Using quotes in the right way can be an efficient way to get your point across. A great quote is easy to understand but can spark a dialogue amongst your peers. From time to time I will be posting quotes that I like (and maybe some I don't). I'll share what the quote says to me and encourage you to do the same in the comment section. This is the first in a series of posts about Wise Words.

"The way to gain a good reputation,

is to endeavor to be what you desire to appear."

Socrates

Most of the quotes I select will likely be a little less esoteric than Socrates', but I figure; "why not start with a bang?". Socrates is telling us that if you want to be known for doing something, you need to make sure that, you do that thing. Seems simple enough, but there is a lot of wisdom in this. Socrates tells us that our reputation is like a jewel, something we need to cherish. He also says that credit, is like fire. I love this metaphor. Once you start a fire it will continue to burn, all you need is a little kindling. Once you have a reputation in an industry as a provider of "quality customer service" for example, it is important to maintain this. You can't leave the fire unattended, you need to constantly provide the level of service your customers have come to expect or risk having your fire extinguished. Once a reputation has been tainted it takes a huge effort to get it back. To really stand out you need to constantly evaluate and reevaluate what success means for yourself or your organization and strive to achieve it. I think Socrates uses the word "endeavor" to illustrate that gaining a good reputation is something you have to work towards vigilantly to both achieve and maintain.

Highly Recommended: Planet Money

This is the first of what will likely be many: Highly Recommended, posts. Basically these posts will be a way for me to recommend some of my favourite products, services, websites or business resources. I will always be open and up front about my involvement with said products. I have mixed feelings about floging, which I will likely address in a future blog (keep reading!). Suffice it to say that RBfS will never have intentionally misleading posts, and I will never post about products or services without explaining my relationship to them.



Today's Highly Recommended is NPR's Planet Money Blog and Podcast.



The Planet Money Podcast is a radio program found on NPR affiliates throughout the US. It currently airs three times a week and the episodes run about an half an hour. I have been listening to the Planet Money Podcast since it started back in September of last year. I subscribe to the podcasts and listen to them on long trips. Planet Monet helps those that are "lost in a galaxy of economic news" to "make sense of the rapidly changing global economy". What I like most about them is their casual and sometimes irreverent attitude. The stories always have a ton of information about some very complicated economic topics, but they present them in a very accessible way. I remember one episode in particular where they explained some aspect of the mortgage industry using the purchase of a dollhouse with monopoly money as a metaphor. They often consult with top economists on issues but are always good about explaining jargon to the layman listener.



The Planet Money Blog is equally worthwhile. They have several small posts a day focusing not only on the big economic questions but also how they relate to us normal folks. That is the charm of Planet Money, they are able to explain the most complicated issues by relating them to everyday situations or demonstrating them through simple scenarios.



I highly recommend checking out both NPR's Planet Money Blog and Podcast. Enjoy.

DC