Contrary to popular opinion, customers aren’t always right. In fact, in a number of cases they’re downright wrong! However, if they’re lead to believe they’re right, or are dealing with a company that doesn’t understand the importance of properly managing customer expectations, then it really doesn’t matter does it? After all, customers decide when and whom to buy from. If they feel you’re not properly serving them, then they’ll simply take their business elsewhere.
The issue isn’t whether you should care or not. It's whether you’ve done everything possible to service this customer, or if they’re just being difficult. Most importantly, the question you must answer is whether this particular customer is right, or whether you must stand your ground.
There’s a limit to how far your company should go. As a result, your sales and customer service team must be on the same page. This amounts to clearly defining the company’s thresholds when it comes to meeting customer requests. Because customers often feel their demands are simply one step up in hierarchy, they tend to demand to speak with someone in charge, or someone who will essentially give them what they want. The typical customer demand of “I want to speak to your manager” must never be allowed to move forward.
If that customer is speaking with a customer service representative, then the next logical person to speak with is the sales representative, but that’s it! Customers can not be allowed to go from one person to another, occupying time and demanding concessions. This is why it’s imperative that customer service feels confident in answering questions, and that the sales representative backs up customer service. This can only happen if the company has clearly defined roles and responsibilities for its sales & customer service team. The perfect answer for a sales person confronted with a customer who demands to speak to someone other than them, is to simply answer with "they won't tell you anything different."
The above video explains the simplicity of the back-end rebate customer reward program.
Is it Wrong to Set Boundaries With Customers?
Sales professionals must be given the power to make decisions and be provided with the follow through capabilities to stand tall with unrealistic customer demands. If not, the customer will simply go from one person to another, occupying time, wasting company wide resources and constantly demanding service requirements the company simply can’t meet. So, what are some of the boundaries that the sales and customer service team must have?
1. Clearly Defined Gross Profit Objectives:
Sales must be measured on gross profit and be paid commission on gross profit totals. They should have clearly defined limits as to what the company’s bottom floor is on gross profit, so that if they have to concede some pricing or gross profit margins, they can. Since customer service and sales work together, sharing these objectives is essential.
2. Clearly Defined Shipment Procedures:
If a customer has been wronged, or has a legitimate complaint, then there’s ample reason to allow for the company to pay for freight for shipping product. However, it must be measured against the account’s value and the gross profit derived from the sale. This is by no means a declaration that the company should never right a wrong.
What it does mean is that the customer service and sales team understand when they can, and cannot pay for freight, and what other concessions they can offer in replace of paying for the freight. Come up with a list of concessions the company can offer that doesn’t impact the gross profit on the sale.
3. Clearly Defined Lead Times on Contractual Agreements
When customers continue to place orders late, or ignore clearly defined lead times, but still demand immediate delivery, then it’s essential the sales and customer service team stand firm. This amounts to moving the customer towards a contractual agreement. However, it doesn’t include making the customer’s error the company’s responsibility. Customers must understand their boundaries and sales must train customers to respect the company’s service capabilities.
The above video outlines the pros and cons of blanket-orders and Kan-Ban agreements. If you want a sample blanket-order contract, go here. If you want a sample Kan-Ban contract, go here.
4. Clearly Defined Payment Terms: Customers are notorious for going through the back door and trying to pin a promise on an unsuspecting sales or customer service representative. As such, they try and play one position off on the other with a “he said, she said” game to get what they want. Don’t allow this to happen. When confronted with these situations, either sales or customer service must have the ability to refute these claims on the spot, and then discuss together to make sure those promises weren’t made.
This all amounts to protecting the company’s gross profit objectives, and establishing mutual respect between a company’s customers and its sales people. Customers will go as far as a company will allow them. The more you give, the more they’ll take. If you allow it to continue unabated, it will affect the gross profits derived from the account and your company’s bottom line.
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