CUSTOMER SERVICE IN A SHRINKING ECONOMY

Steven Sin, Melissa Snelling, Craig Leibelt

By Jena McGregor, Aili McConnon and David Kiley

Article Overview Companies are finding it

difficult to maintain customer service : sinking sales and declining employee morale

Companies may feel forced to trim costs, cutting too deeply can drive away customers

Customers are wanting more attention, better quality and greater value for their money

Companies are focusing more on loyal customers then one-time customers

Put customers first opposed to those that sacrifice loyalty for short term gain have performed better in this economy

Hertz Richard M. Garber rented cars from Hertz 20-40 times a year

for business trips Nobody was waiting with a handheld check-in device Drag his bags to the counter to return the car Difficult to track down Hertz employees for help "When you're rushing for an airplane, every minute counts,"

says Garber. "The less convenient they are, the more likely I am to try someone else."

Hotels Hotel chains such as Four Seasons and Marriot are joining up to buy goods

and services, instead of each hotel buying it on its own Coffee Valet parking Cleaning Contracts Landscaping Services

The Ritz Carlton have been doing their laundry at night to save on electricity costs as well as replacing fresh flowers with potted plants

First-time customers may not notice the small changes such as the fresh flowers, but the repeat customers probably will.

That has led to a renewed emphasis on "tiering"—routing elite-level customers to better agents, nicer surroundings, or faster service.

Zappos.com In the past have offered free shipping on orders and returns, and

have even shipped orders overnight for any customer Recently they are focusing their spending on a new VIP service for

their most loyal customers Now the site can only be accessed by loyal customers who receive an

invitation Promises overnight shipping Earlier access to sales and new merchandise

"We decided we wanted to invest more in repeat customers," says Hsieh. "We're shifting some of the costs that would have gone into new customers."

Cheap Technology Some companies have been experimenting more with cheap

technology Responding to customer complaints via twitter BMW offers free Wi-Fi to customers while waiting for their vehicles to be

serviced, saves costs on giving out and maintaining free loaner cars

When companies come up with simple, low-cost ways to trim costs while improving life for customers, they're likely to win in good times and bad

"I have a saying: 'Fix the customer before you fix the car,' " says Harris. "If you focus on fixing the customer's problem first, the rest is easy."

Top 10 in Customer Service LL Bean Overstock.com Zappos.com Amazon.com Newegg.com QVC JCPenny Coldwater Creek Nordstrom

Questions?

Sources

http://www.businessweek.com/magazine/content/09_09/b4121026559235.htm

http://seekingalpha.com/article/114831-overstock-amazon-near-top-of-best-customer-service-survey

http://images.businessweek.com/ss/09/02/0219_customer_service/2.htm