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| | The Small Business Think Tank Network is not currently active and cannot accept new posts | | Which is more important, Customer Service or Profit? | Views: 865 | | Jan 22, 2009 12:07 am | | Which is more important, Customer Service or Profit? | # | 
Kurt Schweitzer | | This topic stimulated an interesting discussion at our dealer meeting last week, so I thought I'd throw it out here and see what happens. I'll hold off my own comments 'til later, however.
Let the debate begin! :)
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Jan 22, 2009 1:59 am | | re: Which is more important, Customer Service or Profit? | # | 
Scott Wolpow | | They must go together. You will not be profitable for long if your customer service is poor. Look at Dell, Gateway, Circuit City etc. The exception of course is Microsoft.
If you have too much Customer Service and you go out of business. There was a car battery company that offered lifetime replacement of their batteries. They eventually closed at peak production.Private Reply to Scott Wolpow | | Jan 22, 2009 2:54 am | | re: Which is more important, Customer Service or Profit? | # | 
Reg Charie | | Kurt,
Having worked at a motorcycle shop in sales I would have to say service should be top priority.. Bikers talk and I would imagine so do scooter riders. Nothing will shut you down faster than a hint of shoddy service..
Not only does your service dept take a hit , nobody will buy from you.
The new owners of the shop my buddy owned fell down on service and there was a lot of online bitching.. Six months later he was gone.
Those toys are the owner's babies.. Better treat them right.
We even had one customer who would take all the fasteners - nuts - screws - what have you, and gold or silver plate them..
Reg - NEW!! Turn photos into paintings http://FantasticMachines.com
All You Need is Dotcom-Productions and a Dream. http://dotcom-productions.com
0Grief http://0grief.com/special_hosting_accounts_for_my_ryze_friends.htm
CRELoaded websites http://RegCharie.com - SBTT http://thinktank-network.ryze.comPrivate Reply to Reg Charie | | Jan 22, 2009 1:51 pm | | Which is more important, Customer Service or Profit? | # | 
The Eagle: Motivating Champions Around The World | |
Customer Service and Profits Compliment each Other. You have to have both in order for repeat sales. Customer Service is what is lacking today in a lot of Off-line companies.
I heard a report today on the news A Congresswomen who was calling 3 different Mortgage Companies or Banks on Behalf of 3 of her supporters back in her Home State. She spent 2 and a half hours and nothing was resolved. She kept getting the Runaround or Hung up on. She was very frustrated. These companies have no idea of how much business they could lose as a result of not resolving the Problems she was calling about.
Nothing can hurt your Business More then sloppy or messy Customer Service or no Customer Service at all.
Richard "The Eagle" Motivator
Live and Act Like a Champion Today!!
http://www.eagleenterprisesusa.com/
http://abhp-network.ryze.com Private Reply to The Eagle: Motivating Champions Around The World | | Jan 22, 2009 4:34 pm | | re: Which is more important, Customer Service or Profit? | # |
Kurt Schweitzer | | You guys have cited several examples of businesses that have good profits but poor customer service.
The point was raised that while companies can survive without customer service, no company can survive without profits.
Customer service costs money. Yes, I know that as a business owner I'm not being paid by the hour, but people who aren't business owners are more rational and expect to be paid for their efforts. Any time someone else provides customer service for my business costs me money, which has to come from profits or the business will die (I'll go broke!)
Because of this, profits are more important than customer service.
Rebuttals? (Just don't start them with "Jane you ignorant slut." I love the old Saturday Night Live episodes!)
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Jan 22, 2009 5:12 pm | | re: Which is more important, Customer Service or Profit? | # |
The Eagle: Motivating Champions Around The World | |
While I believe Profits are important to keep a company from going under or downsizing. Without Good Customer Service you won't have any profits so the company will have to downsize or go out of Business.
They work hand in hand you can't have one without the other.
Just my 2 cents worth.
Richard "The Eagle" Motivator
Live and Act Like a Champion Today!!
http://www.eagleenterprisesusa.com/
http://abhp-network.ryze.com Private Reply to The Eagle: Motivating Champions Around The World | | Jan 22, 2009 6:02 pm | | re: re: Which is more important, Customer Service or Profit? | # |
Reg Charie | | Kurt, you should be building your profits into your service charges.
If your mechanic costs you $20 an hour to hire then the customer should be charged in the $60 an hour range.
Dealers here charge anywhere from %55 to $85 an hour for service. Service at the local Honda MC shop was $65 a couple of years ago.
If the "service" is a non billable item, (something other than scooter maintenance or repair), it should end in a sale.
Tracking (and charging) for materials and parts used in regular service can be a problem if not done properly.
We used to sell a synthetic oil that offered to double the manufacturers warranty if used from day one on new motors.
This upsale more than doubled the profit on staging the engine and almost all of the customers bought into it.
Upselling a synthetic oil would have the same result.
See http://mr2.com/TEXT/synth_oil.txt for a great article on them.
Reg
Reg - NEW!! Turn photos into paintings http://FantasticMachines.com
All You Need is Dotcom-Productions and a Dream. http://dotcom-productions.com
0Grief http://0grief.com/special_hosting_accounts_for_my_ryze_friends.htm
CRELoaded websites http://RegCharie.com - SBTT http://thinktank-network.ryze.comPrivate Reply to Reg Charie | | Jan 22, 2009 6:43 pm | | Re: Which is more important, Customer Service or Profit? | # | 
Teddy Towncrier | |
Sorry about this Kurt but ... I'd prefer "Customer Satisfaction" be substituted for "Customer service".
When we have a high customer satisfaction profits flow much easier from the following....
* Word of mouth advertizing.
* More customers.
* Real margins.
* More sales per customer.
Without customer satisfaction. ... We can service 'em to death but the end is definitely nigh. ...
Towncrier has developed a special programme for those customers whose requirements are beyond our capabilities. More Here
Bestest.
Teddy Towncrier CPP Towncrier-Media.com Supercharging Your Visions.
 
Private Reply to Teddy Towncrier | | Jan 23, 2009 3:31 am | | re: Which is more important, Customer Service or Profit? | # |
abbeboulah | | Kurt -- how many wheels do your scooters have? How far can you drive when one of them falls off? Private Reply to abbeboulah | | Jan 23, 2009 6:16 pm | | re: Which is more important, Customer Service or Profit? | # | 
Patricia Allen | | Hi, Kurt.
I'm just starting a small manufacturing business and it's only me right now. Needless to say finances are tight even though profit margins are suitable for the product and market, and sales are happening. I have repeat patrons and voluntary referrals happening.
I can see where profit and the satisfaction of my patrons could come into conflict. Let's say I mail an order of a couple pens to a new patron and it gets lost in the mail...yes, I use tracking numbers, but there's more than one way for a package to be lost/destroyed. The patron doesn't receive the pens. I'm a small business; this order could be my only sale that week. Replacing it could mean a significant percentage of resources.
I could give the patron the tracking number and say 'go for it, best of luck' or I can do my best to find the package and replace it if necessary. I would have to spend time in communication to try to satisfy that customer.
I made the decision before I opened my studio that quality workmanship and patron satisfaction come first and that if I can't make a good profit and keep my patrons excited about their pens, then it would be time to quit.
Actually, long before the doors would be pushed shut like this, a process of continual evaluation needs to be implemented. I believe the company's nitch market, that market's values and demographics, our production and marketing methods, expenses--direct, indirect, billable and nonbillable, all these and every other aspect of the business need to seen as they really are and the relationship of each to each continually refined to produce management's goals.
Maybe as a small startup I've come across too strong, but I hate to see management create a war between customers and profits. Such a condition is like my left leg fighting with my right leg. Sooner or later I'm going to fall down if they keep at it like that. Most small businesses fail in the first year and a good proportion of the survivors fail within five years. We need to beat those odds. A balance of effective profit margins and effective customer service will help us run to the bank.
Love and Light,
Pat
Creator of fine wood pens.
http://www.PatsPensAndTreasures.com
http://www.PatriciaAJAllen.com/myblog
Private Reply to Patricia Allen | | Jan 23, 2009 8:23 pm | | Re: Which is more important, Customer Service or Profit? | # |
Teddy Towncrier | |
@Thorbjoern. ..... Ryzers soar! .. They don't need wheels!
@Patricia many of the links in the left frame at http://www.patspensandtreasures.com/ aren't opening for me.
When rectified .... Let me know & I'll be glad to introduce you to my Twitter friendforce. ( and maybe sweet talk a few of my friends to do the same).
Bestest.
Teddy Towncrier CPP Towncrier-Media.com Supercharging Your Visions.
Private Reply to Teddy Towncrier | | Jan 23, 2009 9:05 pm | | re: re: Which is more important, Customer Service or Profit? | # |
Reg Charie | | Hi Pat,
You really need to look at what can be done for your site.
MS office is NOT a good choice for a website management program as a lot of it's code is proprietary and does not work well outside of Internet Explorer.
Your navigation links do not work for me in FireFox and your link to the pen PDF crashes my Internet Explorer.
Reg - NEW DEMO!! Turn photos into paintings http://FantasticMachines.com
All You Need is Dotcom-Productions and a Dream. http://dotcom-productions.com
0Grief http://0grief.com/special_hosting_accounts_for_my_ryze_friends.htm
CRELoaded websites http://RegCharie.com - SBTT http://thinktank-network.ryze.comPrivate Reply to Reg Charie | | Jan 24, 2009 7:12 am | | re: re: re: Which is more important, Customer Service or Profit? | # | 
Ashish Belagali | | Very interesting topic, Kurt.
I have been making the mistake of weighing customer service/ satisfaction higher over profits. Today I have a customer who is very satisfied with our work but whose payment against something like 3 months of work is pending. This is a big payment for a company of our size, and this has created a financial crisis at our end. Now there is no response for a few days to my pleas.
I have learnt my lesson. Profits are more important. Customer service is important as long as it has a correlation with profit.
I shall never advocate taking customers for a ride for making money. That's against ethics. But making profits ethically should always be a priority; else there is a risk of customers taking one for a ride.
/AshishPrivate Reply to Ashish Belagali | | Jan 24, 2009 7:45 am | | re: re: re: re: Which is more important, Customer Service or Profit? | # | 
Lindy Asimus | | Ashish they are customers AFTER they pay you ;-)
LindyPrivate Reply to Lindy Asimus | | Jan 24, 2009 12:05 pm | | re: re: re: re: re: Which is more important, Customer Service or Profit? | # | 
Kathy Buck | | Your customer service can make or break any profit. Even if it is an online store, a customer needing service with an issue and not being responded to promptly will see that person probably not coming back no matter how great a deal.
The same holds true for store front retailers. Locally two hard ware stores, one has great prices with an extremely rude staff and owner. The other, well not as big a selection some higher prices but a wonderful staff - guess where I go? Guess which business is struggling?
EX: of customer service leveraging higher profits
Grocery stores always competing for shoppers, we all need groceries and we all shop for them. Locally (within 8 miles) there are five large grocers. Sendicks, which started on the trendy east side of Milwaukee always known for selection and higher prices has grown now to the burbs and has 8 locations. How does a place with generally higher places thrive? Selection, Location, Promotion and HIGH focus on customer service. Not to mention you feel like a celebrity while shopping in a richly decorated atmosphere featuring carpeting, great soft lighting VS those bright bulbs. :) Sendicks refers to it's staff as 'Associates" not a bagger, stocker or checker.
You can go to the deli and talk to a cheese expert who will call an associate over from the liquor department to advice on wine pairings with cheeses. Every department has a consultant to assist, they are courteous NOT slouches watching the time clock.
Because of their great service and dominating prime real estate, they have the ability to buy more and offer lower prices now. I'm there at least once a month, I'd go more often but one grocer just a block away.
If a business is not seeing a profit, customer service is one area that should be looked at. Profit is vital, if no customers there will be no profits.Private Reply to Kathy Buck | | Jan 24, 2009 2:11 pm | | re: re: re: re: re: Which is more important, Customer Service or Profit? | # |
Kathy Buck | | Your customer service can make or break any profit. Even if it is an online store, a customer needing service with an issue and not being responded to promptly will see that person probably not coming back no matter how great a deal.
The same holds true for store front retailers. Locally two hard ware stores, one has great prices with an extremely rude staff and owner. The other, well not as big a selection some higher prices but a wonderful staff - guess where I go? Guess which business is struggling?
EX: of customer service leveraging higher profits
Grocery stores always competing for shoppers, we all need groceries and we all shop for them. Locally (within 8 miles) there are five large grocers. Sendicks, which started on the trendy east side of Milwaukee always known for selection and higher prices has grown now to the burbs and has 8 locations. How does a place with generally higher places thrive? Selection, Location, Promotion and HIGH focus on customer service. Not to mention you feel like a celebrity while shopping in a richly decorated atmosphere featuring carpeting, great soft lighting VS those bright bulbs. :) Sendicks refers to it's staff as 'Associates" not a bagger, stocker or checker.
You can go to the deli and talk to a cheese expert who will call an associate over from the liquor department to advice on wine pairings with cheeses. Every department has a consultant to assist, they are courteous NOT slouches watching the time clock.
Because of their great service and dominating prime real estate, they have the ability to buy more and offer lower prices now. I'm there at least once a month, I'd go more often but one grocer just a block away.
If a business is not seeing a profit, customer service is one area that should be looked at. Profit is vital, if no customers there will be no profits.Private Reply to Kathy Buck | | Jan 24, 2009 6:15 pm | | re: re: re: re: Which is more important, Customer Service or Profit? | # | 
Gabby Awosika | | Hi Everyone, Here is what I will call a brief summary of CS from various people:
It begins with the first contact a customer has with your company. Good customer service looks like this: Make sure you represent a product or service you believe in! Then...Warm, sincere greeting on first contact. Establish whether your business has what the customer needs (offer to help find it)-provide it or suggest better alternative, to their benefit. Develop an easy, positive rapport with the customer which lets them know they are respected and appreciated. Go above and beyond. Then, provide an easy, efficient way to complete the transaction. Sincerely and warmly thank the customer for their business and invite them to come back if ever they need your help again (in whatever way is appropriate in your case). Actually, that's excellent customer service- and it keeps people coming back to you.
Or like this other person says: Great customer service is when an employee takes the time to listen to your concerns by genuinely expressing interest, sympathy, and their eagerness to satisfy you. Someone who is sincerely caring, compassionate, understanding, fair, and helpful is better than someone who knows their job so well that they brush you off as ignorant. That will keep me, my family and friends away from that store.
I live close to a particular store around me here, but I would rather drive to the one 30minutes away just for better CS. I am a CS person and would know a good one the moment I walk through your door. While I was working with one of the local banks here in Maryland, the biggest thing to the bank was CS, CS and CS. It became a song. As an Assistant branch manager then, the first thing I did was changed the mindset of all the staff members by just doing the right thing which brought a lot of questions from them. They would always want to know why some customers would always want to see me always or why I am always able to lock a loan deal with a customer. One actually said" WHAT DO YOU SAY TO THESE GUYS THAT MAKES THEM JUST FEEL HAPPY WITH YOU ALL THE TIME" My simple answer was that I CROWNED EACH CUSTOMER AS THE KING OR QUEEN WHICH MAKES THEM BELIEVE THEY ARE THE BOSS , PAY MY SALARY AND WITHOUT THEM REALLY, THE BANK WOULD NOT BE"
My self and the Branch manager then were sent to the branch as new staff members to bring the branch back from the bottom of the ladder up, because at that time it was almost dead with bad customer service and their figures were very low for what was supposed to be a level 5 branch. It took my branch manager and I just about 4 months to get the job done, but it was a hard job. So in essence, good CS puts food on your table, pays your bills and much more, while a bad one shuts down the business faster than you ever imagine. Ever heard of a saying that word of mouth is the best form of advertisement?
That is the same with good or bad CS. So if your CS stinks, I am sorry it's only a matter of time for it to get around and it knows no bounds. This can happen in a big or small business or even in a church. So please create a good one, cultivate it, sustain it, nurture it and do all you can to maintain it.
I found the following sites and thought they explained most of it all.
http://www.dbmarketing.com/articles/Art183.htm
http://ezinearticles.com/?The-Super-Service-Strategy---Dont-Make-Sales,-Build-Relationships&id=1911539
http://www.giveemthepickle.com
Private Reply to Gabby Awosika | | Jan 24, 2009 8:47 pm | | re: re: re: re: re: Which is more important, Customer Service or Profit? | # |
Kurt Schweitzer | | I guess the question boils down to "How far should you go to please a customer?"
An example from my shop: In my service department we have a few basic rules.
#1 - "If we can't fix it, it's free."
#2 - "When it goes out the door it's safe to ride."
Rule #1 sometimes gets us into problems. How far should we go to fix something? Electrical problems, in particular, can consume hours trying to isolate an intermittent fault. At $65/hr. if it takes us four hours to locate a broken wire, that's a $260 bill to the customer. What if the customer has placed a ceiling of $200 on the service? (We can't legally exceed the ceiling amount.) Do we stop after three hours and say "We couldn't fix it"? Do we push on regardless and eat the overrun?
Or should we modify the rule to allow for a "Diagnostic Charge" which will bring in money without guaranteeing that the customer sees any result?
Rule #2 also gives us some grief, although not as much as rule #1. Last summer we had a couple embarasing situations where the customer came in to pick up their scooter, and it wouldn't run. As a result I instituted this rule and the procedure of doing a basic safety check on every bike when service is completed. That catches stuff like stuck brake switches, burned out bulbs, and empty gas tanks.
However we also have had some situations where the customer is willing to pay only so much for their service. As a result we've fixed their problem, but delivered the bike with other pieces in a box because they weren't included in the repair that they were willing to pay for.
Should we fix things for which we're not getting paid? What distinguishes repairs we make on behalf of good customer relations from those for which we demand payment?
As a final note, we've now accumulated enough service history on various models of scooters that a few are identified as "problems". If someone brings in a "problem" scooter with a "problem" issue (one that might possibly result in a large repair bill) we demand a deposit as well as giving them a worst case estimate. The general response is that our deposit requirement is unreasonable.
Is it better to have people leave angry (and not able to ride) because we wouldn't fix their broken scooter without a deposit, or have them leave angry (but with a running scooter) because the repair bill was over half what they paid for their cheap scooter? (By the way, I didn't sell them that cheap scooter. None of the vehicles I've sold will ever be in that "problem" category.)
To me customer service isn't theoretical, it's something I deal with every day. Somewhere you have to say "enough is enough", even if your customer isn't always happy.
Yes, I try to give good customer service, but I can't afford to give away the store!
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Jan 24, 2009 9:10 pm | | re: re: re: re: re: re: Which is more important, Customer Service or Profit? | # |
Kathy Buck | | "To me customer service isn't theoretical, it's something I deal with every day. Somewhere you have to say "enough is enough", even if your customer isn't always happy.
Yes, I try to give good customer service, but I can't afford to give away the store!"
I think we all know that there are customers perfectly alright with bleeding us to death. In Kurts situation with servicing scooters sold, I can only imagine the headaches. "I pulled the sticker off and a micro spot of paint nicked " they now want a full paint job VS retouching, and they want it done free. Sound vaguely familiar Kurt? LOL Of course in that situation you have to put your foot down, and that customer will be angry for their own reasons - and if a customer like that does not return, that customer is now someone elses headache and bleeding them. IS it a great loss? IMO - NO. Not all customers are gold - some are just fools gold and end up costing us more then their worth.
In the end the business owner has to decide each customers value. I though have never been one to agree with "Any customer is a good customer" Goodness knows I have my stories of bleeders beyond direct pressure, a full amputation was needed :-)
Private Reply to Kathy Buck | | Jan 27, 2009 8:06 pm | | Re: Which is more important, Customer Service or Profit? | # |
Teddy Towncrier | |
@Gabby Awosika.
My hat is off to your bank for it's attitude towards a customer's importance.
A few years ago; I was seeking a UK supplier and wandered into a 1st Tier Bank's local office seeking recommendations for suppliers.
Manager's reply .... "We don't divulge our customer's business" ....
"OH! .... Just so I'm clear. ... If you have our banking business and someone is seeking a product that we supply ...... You wouldn't give us a leg up and refuse to mention us"? ...... "Please leave my bank"!
Bestest.
Teddy Towncrier CPP Towncrier-Media.com Supercharging Your Visions.
Private Reply to Teddy Towncrier | | Jan 28, 2009 4:34 pm | | re: Which is more important, Customer Service or Profit? | # | 
Althea Conklin | | This is my first post...so I hope you don't feel as though I'm jumping into the middle here.
IMO, any decision regarding cost/profit and customer service comes down to what I would expect. I'm a reasonable person and see both sides of the coin.
If a package sent to me was lost, I would EXPECT the company to do its best to track it down...to me the sale is not completed until the product is in my hands and working as outlined. I pay for a service/product; I expect to get it.
I like Kurt's Rule #2. I think it's common sense. You want to create the best impression; you want to ensure that you've done your part. It's a win-win.
As far as your other scenarios, Kurt. I would just suggest to recognize that the buyer is fully aware that they get what they pay for...no matter how much belly-aching they do. If they don't want to pay for all of a service, I feel that it is GOOD customer service to honor their wishes and allow them to have the box of parts with their partially fixed scooter. They know their budget; they know their own skills, and they know their own schedule. If they think they can get a better deal somewhere else, then that is their prerogative. However, they will most likely return because of your honesty when they find the competition is not so accommodating.
I know here that most businesses that deal with electrical issues charge a diagnostic charge which they wave if the client agrees to have them fix the diagnosed problem.
Basically what I'm saying is that you can't sustain a thriving business with poor customer service...but don't confuse good customer service with giving away the farm.Private Reply to Althea Conklin | | |
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