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How Great Customer Service Helps Retain Great Employees

John Tschohl, called the “guru of customer service,” by USA Today, Time and Entrepreneur magazines, is a best-selling author, service strategist and president of Service Quality Institute. John is a regular contributor to the Desk.com Blog Expert Corner series

As you know, attracting, hiring and training employees are time- and labor-intensive endeavors. So the last thing you want to do is squander that effort and your resources by failing to develop and maintain your employees’ loyalty. One path to happy, loyal employees is a strong customer service training program. What is the correlation, you ask? Happy employees mean great customer service, and happy customers make employees’ jobs more pleasant and rewarding. If you fail to ensure your employees’ happiness, you’re not going to have a stable and reliable customer service team.

Great customer service equals happy employees

According to a Forum Corporation report, the highest employee turnover rates are associated with companies with the lowest employee ratings of service quality. Interestingly, factors such as length of service with the company, job function, and frequency of contact with customers show little influence on turnover rate.

This finding was confirmed when Sears surveyed customers in 771 stores. Employee turnover directly correlated with customer satisfaction. In stores that received relatively high customer-service ratings, 54 percent of the sales force turned over in a year compared with 83 percent at stores with low customer service scores.

Treat your customer service employees with respect

I am repeatedly amazed at the minimal respect managers show their junior staff (except in the glowing words of the annual report). Do they not realize that it can cost as much as $1,000 to replace an employee who leaves because he or she is unhappy?

Let low-wage employees know how much you appreciate them and how important they are to the organization. Appreciation and recognition are important, considering the fact that service employees often quit because they feel unappreciated and unwanted, not to mention underpaid. High turnover sabotages your efforts to deliver great customer service.

When finding people willing to work for $7 to $10 an hour ($200 a month in many developing countries), we should remind ourselves that we are lucky to find these individuals and we will do everything we can to let them know how much we appreciate them and how important they are to this organization.

Build a strong team with a customer service training program

One way toward a happier, more productive workforce and great customer service is a strong customer service training program.

If your customer service training is effective, you can expect an immediate impact on employee retention. Once you reach a point where the customer satisfaction index is high, then employees are far more likely to stay than if customers viewed them as adversaries and sought revenge by being “difficult.” Employees become enthusiastic about their jobs, thereby earning even more praise from customers. They begin working even harder. And better. Self-image improves. Morale runs high. Pride and team spirit take over and raise retention rate.

Great customer service also improves the reputation of an organization in its community. Employees enjoy working for compa­nies with good reputations, as it enhances their own personal reputations.

One person who recognizes the influence of great customer service on turnover is Peter Gregerson Sr., retired chairman and president of Warehouse Groceries Management. One purpose of the company’s service program, he says, is “to increase the employee’s value and worth to the company and to himself.

“We wanted to develop skills our competitors didn’t have in customer relations,” said Gregerson. “We hoped, with those things in mind, to increase our sales and our profit with repeat business and fewer customer complaints. We felt that it would reduce our employee turnover as well.”

People-oriented employees who derive personal satisfaction from dealing with customers are more likely to enjoy their work. So, your turnover will be low, and that’s no small benefit at a time when good employees are hard to find and hard to keep, and very expensive to replace.

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