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Cost Versus Investment!

By Rowdy McLean. November 2009 

I was speaking on SERVICE EXCELLENCE as a business strategy at an event recently in Shanghai. During question time a member of the audience asked me an interesting question:

"While all the information about service excellence is great and it all sounds really good, is there any real evidence from your clients of its effect on business?"

In answer to that question I did some research with our clients and the results they are achieving. Here are the results!

  • Customer retention has improved by as much as 50% (note reducing the defect rate by just 5% can double your profits)
  • Market share growth was above 5%
  • Spend per head was up by more than 8%
  • Marketing costs had declined by 11% (word of mouth marketing is 20 times more effective than any other form of marketing)
  • Employee absenteeism was down by 8%
  • There was a marked improvement in employee morale and productivity

The successful case studies are numerous and include: Virgin, Federal Express, Nordstrom, Amazon and Zappos.

Frederich Reichheld in his book "The Loyalty Effect" gives numerous examples of companies that have used a service strategy to retain customers and as a result doubled their profits.

So, the real question is: not canyou afford to implement a program but can you afford not to?

In the words of the CEO of one of our clients - "I simply cannot imagine going back to how we were as a business. This has created not only more customers and more revenue but it has reinvigorated the whole organisation".

Creating a service culture is not easy, however the results well and truly pay for themselves.

Ron McLean is an international author and customer service strategist.  If you think your organisation would benefit from having Ron present his Service as a Business Strategy message to your team, please contact us on 1800 GET REAL or email emma@creatingsynergy.com

Copyright 2009 Ron McLean

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