Customer Relations

Background

Customers are the lifeblood of every business, including both retail and business-to-business customers.  Whether or not you think of customer satisfaction as a social responsibility issue, every business owner will think of it as a profitability issue!  Time and resources put into understanding the customer perspective is always a good investment.  Strong and effective customer relations can be the direct route to long term success.

Customer Engagement

Listening to, and engaging, your customers are the first steps to building good customer relations.  As a starting point, many businesses measure their customers’ satisfaction to determine their expectations and assess their experience, including such factors as service, price, quality, value, product or service experience, and broader social responsibility matters in order to improve their customer relations, foster goodwill and inform continuous improvement of the customer experience.  Another good practice is to provide mechanisms for customer feedback via comment cards or a dedicated email address (customerservice@company.com).  By effectively listening to your customers and acting upon their feedback you will get insight into customer needs and build customer loyalty.  Engaged and satisfied customers are more likely to give you repeat business and recommend you to others.

Customer Trust

Customer trust is a critical success factor for any business.  Research conducted by Edelman, a global public relations firm, shows that “trust and transparency are as important to corporate reputation as the quality of products and services”^{Note 1}.   Building customer trust in your company and your products and services is the key route to building a successful business.  Much of this trust centers on interactions with employees.  Strong customer-employee relationships can build customer confidence.  Companies can further nurture trust by seeking and acting on customer feedback to improve the company’s value proposition.

It bears considering general guidelines and standards which have been established for good consumer relations.  For the retail customer, the UN has adopted a set of “Guidelines for Consumer Protection”, including:

• Protect consumers from hazards to their health and safety
• Promote and protect the economic interests of consumers
• Access to information to enable informed choices
• Provide consumer education, including education on the environmental, social and economic impacts of consumer choice
• Make available effective consumer redress and
• Promote sustainable consumption.^{Note 2}

These guidelines are one means by which a company can build customer loyalty and trust.  The Canadian Better Business Bureau promotes the following “Standard for Trust”^{Note 3}  to the Canadian business community:

• Build Trust: Establish and maintain a positive track record in the marketplace.
• Advertise Honestly: Adhere to established standards of advertising and selling.
• Tell the Truth: Honestly represent products and services, including clear and adequate disclosures of all material terms.
• Be Transparent: Openly identify the nature, location, and ownership of the business, and clearly disclose all policies, guarantees and procedures that bear on a customer’s decision to buy.
• Honor Promises: Abide by all written agreements and verbal representations.
• Be Responsive: Address marketplace disputes quickly, professionally, and in good faith.
• Safeguard Privacy: Protect any data collected against mishandling and fraud, collect personal information only as needed, and respect the preferences of consumers regarding the use of their information. 
• Embody Integrity: Approach all business dealings, marketplace transactions and commitments with integrity.

Adhering to these standards of behaviour can help position a small business to build customer trust and loyalty, thereby cultivating repeat business and word of mouth referrals.  Some important additional social customer relations priorities for small business include:

• Health and Safety of Products
• Vulnerable and Low Income Customers
• Sustainable Product Design

Sustainable Product Design is also addressed in the Product Development section.

Health and Safety of Products

A key consumer issue is the quality and safety of products.  Customers need clear instructions for safe product use, including assembly and maintenance.  To avoid customer harm and danger, anticipate potential risks of your product and services in the design stage and throughout the product life cycle, from R & D, to manufacturing, storage and distribution, use and disposal, reuse and recycling.  Whether or not legal safety regulations exist, products should be safe for their intended use and if misused in a way that can be foreseen^{Note 4}. 

Vulnerable and Low Income Customers

An important social responsibility factor for business is the affordability of their products and services to low and fixed income customers.  Leading companies address this issue, some for strategic business purposes, considering low income consumers as “emerging markets”.  Others take a social justice approach to ensuring their products and services are affordable from a philosophy of “social inclusion”.  Different approaches to affordability include tailoring or discounting products for those with unique needs and branching into excluded communities, such as inner city or remote communities. 

Further, vulnerable consumers may have special needs because they may not know their rights and may be unaware of, or unable to assess, potential risks associated with the products and services.  They may not be able to make balanced judgments when subjected to marketing or direct sales calls^{Note 5}.

To better understand their low income customers, BC Hydro established a Low Income Advisory Group of representatives from 14 social service agencies that provide services to BC’s most vulnerable low-income groups including the working poor, refugees, new immigrants, seniors, people with disabilities, and Aboriginal people.  The group’s mandate is to advise on programs and partnerships that will help low-income households with their specific energy needs and conservation goals.  Recognizing that people on low incomes live with little or no financial safety net and thus are more vulnerable to the impacts of changes in the economy and to service and rate changes, BC Hydro considers the barriers of access, mobility, culture and language when implementing changes and new programs.^{Note 6}

Sustainable Product Design

In the product innovation cycle, businesses have the opportunity to consider how to adapt or design their products and services so that their use directly contributes to social sustainability.  Affordable and accessible products and services promote social inclusion; contributing donations to a community group for each item sold advances the charitable cause; and selling fair-traded goods supports third world producer incomes and family educations, as three examples of social benefits from product and service use.  Customers are very responsive to social cause products; such initiatives can help a business build and sustain market share.  Additionally, many of the customers for whom the product is adapted or designed become prospective new “markets” for the small business. 

For example, in considering how to adapt its products for people with disabilities, Bell consulted with BC community groups on how to make its technology more accessible.  As a result, handsets have been modified to reach a broader market, including people with disabilities, supporting their participation in every day life.  As a result of this consultation Bell identified a project with the BC Institute of Technology in which Bell is providing funding over 3 years for an applied research project to create user interfaces that are more appropriate to a disabled market segment.  Bell sees this as an opportunity to both build its social responsibility while also building market share.

Action

Customer Satisfaction

Conduct a customer satisfaction survey of your company, your products and services, and their service experience.  Ask your customers face-to-face, as they are about to walk out of your store or office (“what is one thing we could have done to improve your experience with us?”); call them on the phone after their visit; mail or email them a questionnaire; include questions in a client newsletter; provide a feedback from at point of sale or post-sale. 

You could include questions such as how satisfied are you with the purchase, the service and our company; how likely are you to buy from us in the future; how likely are you to recommend our products or services / company; how could we have served you better.  Also ask what they didn’t like about the company, the experience and the products / services.  It is very valuable and helps build further loyalty, if you compile the results, take action and let your customers know how their feedback directly shaped changes in the business.

You may also wish to develop a “Customer Satisfaction Code of Conduct” to communicate your customer commitment.  The International Standards Organization has developed guidelines for the development of such a code, which can help you decrease the likelihood of problems arising and can eliminate the causes of many complaints and disputes.  See Resources for details.

Customer Trust

To build customer trust, you may wish to form a “trust team”^{Note 7}, a cross-functional team of employees that gets together to brainstorm answers to these questions: 

• Where are our best trust-building opportunities?
• How can we capitalize on them?
• What are our biggest threats to losing trust?
• What safeguards can be implanted to protect against this potential loss?
• And for lost customers, what specific actions can immediately be taken to start the process of rebuilding trust?

Going through this process for each stage of the customer relationship can help you identify the trust building opportunities in your company you can tap into.  Create a plan from the best ideas and put it in action.

Vulnerable and Low Income Customers

Conduct research to find out the barriers low income, low literate and geographically isolated customers face in using your product or service.  Contact local social service agencies to determine some of the key issues.  Set up an advisory group or round table to consult community groups and people on low incomes on ways and means your products and services can be made more accessible to low income households.

Business Benefits

Brand and Reputation

Customer attraction and retention is key to building market share.  Engaged and loyal customers can help position your business for growth and profitability: “it is generally accepted that it costs five to 11 times as much to recruit a new customer as to retain an existing one; a satisfied customer tells three or four people while an angry customer passes the bad news on to ten people”^{Note 8}.

Innovation

Customer-centred businesses are likely to uncover product innovation ideas from customer suggestions and feedback.  Taking the needs of low income and vulnerable customers into account can generate product improvements which could benefit other customers as well.  Designing for affordability, accessibility and social value creation can result in a product lineup that creates competitive advantage, by tapping into new markets and building positive customer and employee relations.

Resources

International Standards Organization (ISO) has published “Guidelines for Codes of Conduct for Organizations”, providing guidance on developing customer satisfaction codes of conduct (ISO 10001). 

ISO has published guidance on the internal handling of product-related complaints (“Guidelines for Complaints Handling in Organizations”) which can help preserve customer satisfaction and loyalty by resolving complaints effectively and efficiently (ISO 10002).

ISO has published guidance on dispute resolution (“Guidelines for Dispute Resolution External to Organizations”) regarding product-related complaints that could not be satisfactorily resolved internally (ISO 10003).

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Footnotes

1. Edelman. 2010. 2010 Edelman Trust Barometer Executive Summary   (PDF - 1.5 mb - 8 pages)   (return to reference 1)

2. United Nations. 1999. United Nations Guidelines for Consumer Protection  (PDF - 261 kb - 11 pages)  (return to reference 2 )

3. Better Business Bureau. 2010. BBB Standards for Trust   (return to reference 3)

4. International Organization for Standardization. 2010. Guidance on Social Responsibility  (return to reference 4)

5. International Organization for Standardization 2010. Guidance on Social Responsibility,   (return to reference 5)

6. Conversation is for Everyone    (return to reference 6)

7. Leader Values.  2005.  Trust Tools for Tough Times.  (return to reference 7)

8. Small Business Journey. 2010. Benefiting from Listening to and Involving Customers.  (return to reference 8)