Why Your Employees Are Losing Customers: Part 2
Last week, I explained our research on the “Direction Deficiency” how it prevents employees from differentiating their company’s experience from that of their competitor’s. This week I’m covering the second major obstacle for enabling your employees to grow your customer base.
The Action Gap – In the space between employee knowledge and organizational results is the Action Gap. With regard to customer service and consultative sales, the action gap manifests itself in two ways.
1. Failing to act. The research literature conclusively shows that corporate training is highly effective at teaching people new knowledge. An average manager could expect to leap from the 50th percentile (i.e. middle of the pack) in a specific topic area up to the 83rd percentile following a training course on that topic.4 However, rates of training effectiveness fall off into the Action Gap when training is expected to change an actual business outcome. In this case, the average employee will likely move only from the 50th percentile to the 61st percentile.4
The fact is that teaching people what to do and realizing business results from what they actualy do are two very different things.
This is due to what I call the Mike Tyson Rule. When asked what he thought about an upcoming opponent’s ironclad plan to beat him, Tyson replied “everyone has a plan until they get punched in the mouth.” Every customer has an inner Mike Tyson who is just one hot button away from delivering a knockout blow to your service or sales associates. Because of the sheer quantity and diversity of personal interactions they encounter each day, customer service representatives must deal with more right hooks and left jabs on a daily basis than any other position in your organization. At any given moment, they have a far greater likelihood of getting punched in the mouth and failing to execute your strategy the way they were trained.
2. Customer-pleasers lose. Customer-leaders gain. On the other hand, customer-facing employees also hold more potential than anyone else in your company for growing your customer base. It is common knowledge that a dissatisfied customer will tell between 9 and 15 people about their experience, and that 13% of those dissatisfied customers will tell more than 20 people. A lesser known fact is that when a service rep or sales associate helps a customer solve a problem, that customer will tell 4 to 6 people about that experience. Imagine increasing your marketing effectiveness by four to six times.
The rub is that employees must be more than “nice” in order to solve a customer problem. Nice is merely a hedge against customer dissatisfaction–it prevents a new problem (i.e. an angry customer problem) from creeping up, but it doesn’t solve an existing problem. Training service people to be nice will prevent your customer base from shrinking, but it won’t make your customer base grow. That is most likely why a 2007 study found that departments run by customer service managers with a confident, action-oriented mindset deliver significantly better customer service than departments run by their less decisive peers.
Key Finding: Bridging the Action Gap requires more than effectively conveying knowledge about how to solve customer problems. Training efforts must focus more on conditioning employees to habitually take decisive action on the customer’s behalf.
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