Can I help you? The correlation between profit margins and good customer service

Catherine DeVrye

Catherine DeVrye. Source: Supplied.

Anyone who thinks a customer isn’t important just ought to try doing without one for 90 days!

Yet, how often do some staff see customers as interruptions to their day? Or slip into the trap of thinking customer service is just a few insincere smiles? Or, worse still, think serving another human being is beneath their dignity?

Switched on management and staff no longer regard customer service as the ‘soft fuzzy stuff’ in this high-tech world, but a competitive edge that can yield tangible bottom-line results!

There are many dictionary definitions of service. Such as: ‟Being a servant to a master.”

This implies subservience. As egalitarian and proud Australians, we rightly abhor this notion.

However, another definition describes service as: ‟To be useful.”

If we adopt the latter definition, we will more readily embrace the service culture required to be successful in the global economy. We have moved from an industrial revolution to an information revolution and are now in the midst of a service revolution. We ignore this at our peril.

We can no longer afford the arrogance of believing service is a means to an end, perhaps before one obtains a ‘better’ job in a big corporation or sexy startup.

Smart individuals and companies need to adopt the definition of service as being useful and feel good about helping people. Smart businesses will foster a genuine desire to add value that far surpasses any superficiality of standard sayings such as ‘have a nice day’.

Make sure that all your staff understand the important role they play by ‘being useful’ to every customer.

The customer may not always be right, but the customer is always the customer!

And while customers may not always be right, we can never argue with their perceptions of the service provided, because those perceptions translate into bottom-line results.

Margins are often tight, but take a moment to consider some research conducted by The Profit Impact of Marketing Strategy, which surveyed users of over three thousand providers of goods and services. Customers were asked whether they perceived the organisation as a ‘good service provider’ or ‘poor service provider.’  Those results were then matched with the actual financial performance of the organisation in the market place.

Findings were conclusive. Those perceived to be good service providers could charge an average of 9-10% more for the same basic good or service! And, those who were perceived to be service leaders grew two times faster than their competition!

The word ‘perceived’ is an important one because there was no data to determine whether the customer perceptions were, indeed, an accurate barometer of the actual service levels. A customer only cares how they feel they are personally treated in any given situation. No one ever said customers were reasonable human beings!

However, it’s potentially good news for small business that large organisations tend to lose sight of their end-user customer faster than smaller owner-operated firms. But, it’s only good news if you make sure that all of your staff realise it’s not the boss who pays their salary, but the customer.

You can never overemphasise that anyone who thinks a customer isn’t important, just ought to try doing without one for ninety days!

NOW READ: The three fundamental truths about your customers

NOW READ: Satisfaction isn’t sufficient: Why businesses should focus on customer appreciation


Notify of
Inline Feedbacks
View all comments