By: Greg Jerralds, Chief Operating Officer, Profit InnerCircle

What senior executive or business owner is not interested in uncovering ways to increase profitability? This certainly is the case when the cost of doing business skyrockets, and tough decisions must be made to uncover ways to leverage revenue growth with rising operating costs to achieve desirable profit levels.

The cost of doing business continues to challenge even the leanest of companies. And, as the present economic condition continues to flop around like a tiny bobbin on a raging river, companies must become even more creative in their effort to retain existing customers, while attracting new ones!

Rising Cost Of Doing Business

It’s no doubt that companies will continue having a difficult time controlling costs. And, as costs continue to rise, business leaders must become savvier than ever before. They must find new and more cost efficient ways to produce their goods and services. However, there’s one vital area that must not be overlooked. In fact, it’s the very area capable of providing the most accurate barometer of a company’s success…customer satisfaction and retention!

Although businesses may not have much control over the rising cost of goods and services, one thing’s for sure; they do have a considerable amount of control over the level of service they provide to their customers. And, those who provide exceptional customer service will be in a better position to weather the storm!

The Power of Satisfied Customers

Let’s face it; customer satisfaction has always played a significant role in determining a company’s level of success as well as its degree of failure. In today’s competitive global marketplace, service has truly emerged as the ultimate differentiator in the minds of so many consumers. And, with such easy access to online cyber communities, consumers have an endless number of channels to share their customer service experiences with hundreds, even thousands of a company’s current and potential customers. So, if they’re not sharing positive feedback about your business… beware!

Customer’s Have Choices…Business Leaders Take Heed

It’s no surprise that customers are in the driver’s seat, and they possess the ultimate power…the power of choice: the choice to do business with one company, rather than another. They have the choice to wait on hold, accept poor service, or contact a competitor. It’s those types of choices that have a profound impact on how companies behave and conduct business, particularly those that actually listen to their customers.

Often, it’s not the actual product, or cost of the product alone that motivates a consumer to buy; it’s the perceived level of service they received during each interaction. In fact, it’s the power of consumer choice, and passion for new and better services that should excite senior executives, and business owners everywhere! And, here’s why!

Well, the formula is quite simple… greater customer satisfaction and loyalty means more new and repeat sales. And, greater sales result in greater profitability. Actually, it’s during difficult economic times that businesses have an enormous opportunity to increase customer satisfaction and loyalty. Unfortunately, the same can be said of destroying it too. The goal is for companies to understand their customers’ needs, remain flexible, and be willing to accommodate their ever changing demands.

A Common Mistake

Alan, the Vice President of Customer Service, was asked by his CEO to lower operating cost by reducing headcount by 10 representatives. Alan responded, "Eliminating 10 customer service representatives will negatively impact the level of service we provide to our customers. The CEO replied, "Our prices are very competitive, and our products have always been in high demand. I’m sure our customers will be willing to wait a little longer to receive our products when necessary."

Alan reduced his headcount as instructed. However, after three short, but very costly weeks, Alan’s CEO reconsidered his original request. You see, Alan’s CEO was correct about the company’s competitive pricing and high product demand, but what he did not factor into his assumption was the amount of importance his customers placed on the level of service the company provided.

The Value of Customer Retention

The CEO quickly learned that his customers’ loyalty was not tied to competitive pricing and quality products alone, but to quality business processes and historically high levels of service they were accustom to receiving: a level of service that far exceeded their competitors. But when the service level declined, there was little to differentiate Alan’s products from those provided by his competitors. As a result, Alan’s company experienced an immediate decline in revenue that far exceeded the financial impact caused by the growing cost of raw materials.

Far too often, business leaders use the ‘level of service’ they provide to customers as a negotiating factor: hoping the customers won’t notice a change, or when noticed, become tolerant of it. Sure, there are situations that warrant modifying staff levels, but companies must be very cautious not to place quality or service levels at risk when doing so. Remember, it’s much easier to keep loyal customers satisfied and buying than it is to find and motivate new customers to buy!

Make The Commitment

Is your company truly committed to providing exceptional customer service? If so, here are FIVE tips to help maximize the level of service you provide to your valued customers:

1. Employ a ‘top-down’ culture that fosters a customer-centric philosophy!
Communicate the importance of providing exceptional customer service. It must be ongoing and sustained to have a positive impact on changing the corporate culture. The message must be supported and reinforced at the highest level.

2. Talk to your customers. They are smarter than you think!
If you really want to know how your customers feel about your products and services, just ask them! Take the time to capture, track and trend their feedback. You can’t afford not to!

3. Talk to your employees. They know more than you think!
Your employees know exactly how your customers feel about the company’s products, services, policies, and procedures. A word of caution: Don’t shoot the messenger! Employees will stop sharing feedback the moment they feel threatened by doing so!

4. Challenge your internal policies and procedures. They may be the very things annoying your customers!
Far too often, it’s your internal policies or procedures that form a wedge between the exceptional level of service your employees provide, and your customer’s overall level of satisfaction. Business leaders must frequently ask, "Are our policies or procedures single-handedly destroying our ability to achieve exceptional customer satisfaction?"

5. Align goals and performance measurement to insure optimal levels of customer satisfaction is achieved. Place every employee on the right page!
This step is vital in reinforcing your commitment to the customer-centric strategy as well as its importance. Properly aligning goals and performance measurements will insure division-level and department-level business initiatives are consistent and in full support of the company’s customer-centric philosophy. Having the right metrics in place will help your company determine its success as well as identify areas of opportunity.

Simple…Delivery Exceptional Customer Service!

Here’s the bottom line! If you’re providing good customer service today, provide better customer service tomorrow. If you’re providing great customer service today, provide exceptional customer service tomorrow. One thing’s for certain, customers will remember the service they received well after the product has expired. Delivering exceptional customer service requires a total commitment from every employee! And, when executed well, it pays big dividends. I share several other key steps in my new book, "The Leader's Guide to Performance Management."

So, should every employee be thinking about customer satisfaction? Absolutely… a company’s survival depends on it! There’s a highly competitive environment out there, and companies must depend on the collective effort, commitment and drive of the entire machine. That machine, fueled by every employee, every division, every goal, every objective and every strategy, must be properly aligned and calibrated to support the company’s primary reason for being in business…to meet or exceed customer expectationsat a profit! And, one of the swiftest paths to profitability is led by extraordinary customer satisfaction and retention programs. So, make the commitment to make more profit…deliver exceptional customer service today, and every day!