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Strategic Customer Service.

Managing the Customer Experience to Increase Positive Word of Mouth, Build Loyalty, and Maximize Profits

John A. Goodman

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EVERYONE HAS A STAKE IN SERVICE

When you accept the strategic importance of customer service, you realize that you have a stake in it regardless of your function in the organization. I don’t mean this in some idealistic or remote sense. Rather, I mean that, regardless of where in the company you work—information technology, risk management, or human resources—as an executive, you can identify ways of directly improving your customers’ experience and thus your organization’s market position and future revenues. You can also help your organization avoid, rather than ignore, the blowback of additional costs resulting from hassles with customers. Of course, the potential payoff is highest for managers and professionals in sales and marketing, particularly in certain industries. More than 50 percent of all new customers for investment, retail, and health-care products come from word-of-mouth referrals. For business-to-business companies, references and referrals are as important as, or even more important than, the sales rep’s offering. Service is also critical for franchisees, distributors, and other channel partners. The stakes are also high 8 Introduction for businesses that are out to deliver high value. Executives at John Deere, Lexus, and American Express have all said, ‘‘We don’t want to have to compete on price,’’ and they don’t have to because of their service and their quality. More broadly, strategic customer service applies in every venue across all industries, and also in nonprofits and government agencies.

1. All ultimately depend on satisfied customers for their continued existence. In addition, certain ongoing developments demand a strategic approach to customer service, including the following: ? The Internet now provides most of the information that salespeople used to supply, plus competitive data and user reviews; this has changed the mission of sales, marketing, and service in fundamental ways. ? Almost half of all customer complaints, questions, and comments are submitted on the Web or via e-mail, but many companies still focus on their toll-free numbers, to the neglect of their Webbased capabilities. ? Global markets and the outsourcing of service activities have created angst for customers and raised cultural, financial, and risk management issues for companies. ………. DOWNLOAD

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