Creating an Effective Customer Service Plan



The ability to service customers well is a talent that must be taught and nurtured within every organization. By accepting this concept and having your employees buy into it, you will put your customers first — where they belong. Customers are savvy, and they avoid companies that are not responsive to their needs.

Having a formal plan for effectively servicing customers helps everyone in your organization know that your organization's ultimate goal is to keep customers happy — and coming back to spend money on your products and services time and again. This discussion will take you through the process of establishing a formal customer service plan.

  1. Overview
  2. Establishing a Company-Wide Approach
    1. Assessing your company’s customer focus
    2. Assessing your customers' needs
    3. Establishing formal customer service policies
    4. Educating your staff



Customer service is a state of mind in which you and your employees are constantly thinking about improving every facet of your business that deals with customers. It’s finding a way to make sure every customer is satisfied and continues to do business with you. To meet the needs of your customers, you must know what the customers want and expect. You must be able to provide quality service on a consistent basis. Many companies formalize customer service plans without ever consulting their customers. This is not an effective practice. You must speak to your customers to ascertain their perception of the service you provide. In reality, the customer is the ultimate critic. In addition, you must periodically ask your customers how you are doing.

Your customer service plan must include a method for measuring and tracking customer satisfaction and loyalty, as well as a program to ensure its continual growth to higher levels. Depending on the size of your company, you will need either an informal (for small companies) or a formal plan (for larger companies) that includes not only customer service policies and procedures, but also specific explanations on how you would like to treat clients in a variety of circumstances.

What are the benefits of having a company-wide customer service plan?

The benefits of developing and implementing a quality customer service plan far outweighs the effort it takes to formalize the plan and educate an organization's employees. The benefits are many:

  1. Minimizes customer and employee stress — Having an action plan and adequately training staff members can make a big difference, especially in the case of a disgruntled customer. If the situation is appropriately handled by an employee, a bad situation can result in a positive outcome.

  2. Enhances productivity leading to competitive advantage — An effective customer service plan will allow employees to focus their energies on improving customer-oriented services instead of defusing tense situations. An increase in employee productivity will always lead to happier, more satisfied customers and employees, leading to a competitive advantage over your competition.

  3. Proactive vs. retroactive — An organization that is proactive in assessing the customers' needs, then designing and implementing a plan to satisfy those needs, will not only increase its chances of survival but increase its market share.

  4. Retention vs. new customers — Retention of your current customers will increase your bottom line. According to statistics from the U.S. Consumer Affairs Department, it costs five times more to get a new customer than it does to keep an existing one.

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Establishing a Company-Wide Approach


Customer service plans are unique to each organization. No two plans are alike and there is no right or wrong format, but a few basic elements should be addressed by all customer service plans:

  • Assessing your company’s customer focus
  • Assessing your customers needs
  • Establishing formal customer service policies
  • Educating employees

Assessing Your Company’s Customer Focus

In years past, the customer service plans of many companies consisted of hiring one or two people whose job it was to handle crises that arose with disgruntled customers. Today, smart business owners know that customer service should consist of more than just a couple of people "putting out fires." Rather, it should be an ongoing effort by all employees that occurs both when clients are satisfied and when they are not.

The key to making this proactive approach work is achieving buy-in from all employees, from top-level managers down to receptionists. Each staff member should understand how his or her job fits into the company's overall customer service plan — only then will they realize that every interaction with customers affects the way those customers see the company as a whole. For example, if a customer calls for the first time to inquire about a new product and encounters an abrasive switchboard operator, that may be enough to form a negative opinion of your firm, and he may never call again. Likewise, your sales staff may be high powered deal-closers, yet lose accounts because they don't pay attention to small details like sending thank-you notes to clients.

To establish an effective customer service plan, you must first have a starting point. The following is a self-assessment survey. Reflect on the current level of service your company provides to customers, and then answer the following questions as honestly as possible. True or false:

  1. Our company is dedicated to satisfying customers.
  2. I, as the owner of the company, show employees by example that customer service is extremely important.
  3. We never promise things that we can't deliver
  4. We always ask customers for feedback, and we take their complaints seriously.
  5. We develop new policies, products and services — and make tangible changes to existing ones — based on feedback from our customers
  6. We proactively anticipate problems before they reach customers.
  7. We know our customers' expectations.
  8. . Our staff is accessible to our customers and frequently interacts with them.
  9. Our goal is to resolve all customer grievances quickly and efficiently.
  10. We strive to not only meet, but also to exceed customer expectations.
  11. All of our employees know that customer service is part of their job.
  12. We constantly examine our competitors' products, services and policies to learn from their strengths and weaknesses.

If you answered True to all of the questions, congratulations! Your organization has a strong customer-orientation. If you answered False to more than two questions, your customer service plan needs work.

Assessing Your Customers' Needs

Organizations often claim to know their customers without ever taking the time to perform a thorough analysis of their customers' satisfaction with the services or products provided. Often potential areas of customer complaints can be realized by reviewing the return rate of products you sell. If this is high, your customers may be unhappy with their purchases, and you must find out why. Is your product inferior or not user-friendly? One can assess the number of service or maintenance calls that are received and conduct an analysis of complaint consistency. Are the complaints related to inadequate support, faulty products or parts problems? Check the status of product shortages (backlog or just not enough); if a shortage exists, there are undoubtedly unhappy customers out there.

In the service arena, one might look at the length of time it takes before a customer service representative answers a customer telephone call. What percentage of customers listen to music on hold while waiting for a representative to answer in person? What is the average wait before a call is answered in person? Your employees and your customers are excellent sources of information, including "the good, the bad and the ugly."

It would behoove all employers to listen to their employees when it comes to customer service. Your employees are often the ones in contact with the customers on a daily basis. It's not unusual for the first person to have contact with customers to be the receptionist. He or she is likely to have an excellent idea of the customers' likes and dislikes. Often customers will complain about the poor quality of a product, the lack of support, or the extraordinary amount of time they spend waiting for service from your organization. The customer or client will often not voice the complaint to others in your company. Find out from your employees what the customer complaints are. Keep in mind that only 2 percent to 4 percent of disgruntled individuals register complaints. .

If your company currently uses an ad-hoc customer service plan, you may want to consider implementing something a bit more formal. If the plan is in writing, employees will have a resource to turn to whenever they have a question about how to handle a client. The following steps will set you on your way to developing your plan.

  1. Develop a service vision. A vision is what you want your company to represent. The vision allows the organization to function around a single purpose; in this case the purpose is servicing customers. The vision will also help guide the decision-making process. An example of a service vision for an organization may be "to provide quality, service and the best price to our customers." Keep the service vision short and to the point. To define a service vision for your company, you must first define what is important to your company, listing the top seven to 10 items in order of importance. Then think of your customers and what is important to them. Think of your company in the future. What do you see and what has your organization accomplished? Answering these questions will help you develop a service vision.
  2. Recognize your organization's need for a customer service plan. Some firms have continual service headaches; others never receive a negative call. Establish procedures up front to ensure each customer gets the same fair treatment, and to protect employees from irate customers.
  3. Determine the level of service needed. Assign resolution responsibility to each level of employee for different levels of problems and different levels of customers.
  4. Establish goals for the plan. What do you want to accomplish: fewer returns, fewer complaints, more purchases?
  5. Measure the level of consumer and business-to-business satisfaction with tools like verbal feedback, formal surveys, number of referrals, etc. Surveys are a popular method of gathering information. Surveys should be short, easy to understand and complete, and objective. A survey can be given to a customer before he/she leaves your establishment. In the case of a restaurant, a self-addressed, postage-paid survey card may be placed on each table with a short explanation for the customer to mail it back. Other types of companies may want to mail a survey to customers some time after a purchase is made. Many organizations gather survey information, but an analysis of the results is never performed. It is not unusual for an organization to make inappropriate assumptions from survey data. It is important to ask the right question. A local car dealer interested in inventory for the next year decides to send a survey to the 10,000 individuals in his target area. The survey simply asks if the reader is planning to buy a car in the next 12 months (yes or no). A large number of individuals might respond with the desired yes, but that is not necessarily good news for the dealer. Unless they ask the following questions, the survey results are meaningless: If you are going to buy a car, will it be new or used? How much are you willing to spend on an automobile (used and new)? Are you considering foreign or domestic?
  6. Create benchmarks, such as a target rate of repeat customer purchases, to measure the plan's effectiveness.
  7. Adjust the plan accordingly when new information is learned. If you or one of your employees encounters a situation in which the plan doesn't apply, have them prepare a report detailing the problem, resolution and follow-up. Incorporate the new information into your plan to help others in the future.
  8. Recognize and reward employees who outperform stated customer satisfaction objectives and goals, and those who make recommendations on how to handle customer complaints better, how to be more effective, or who consistently offers better policies and procedures. Make sure employees share success stories by submitting written documentation to management. Rewards can include such things as "Employee of the Month" certificates, movie tickets, special parking privileges, time off, dinner out, medals, trophies, bonuses, and, of course, verbal praise.
  9. Hold regular "customer satisfaction" meetings. Ask employees what else they recommend doing to increase customer satisfaction and establish stronger loyalty from customers. This will stimulate employees to think in personal terms of what they can do for your customers.
  10. Focus groups are also a popular method to gather customer information. Oral questions are posed to a group of individuals that represent the target population. The questions must be objective and well thought out. Unless an outside party is used to administer the questions, there may be some bias. This method of information gathering is time consuming and, at times, expensive.

The process of gathering information and analysis of the findings should be an ongoing process for all organizations small or large. The customer service plan must change to meet the requirements of an ever-demanding customer and to maintain the competitive advantage.

Establishing Formal Customer Service Policies

Handling Customers Under Normal Circumstances: Each time a customer interacts with your company — whether it is to place an order, make an inquiry, return a product or lodge a complaint — there is a flow path that can be charted. Charting the customer interaction path not only increases efficiency but also assigns employees responsibility for each part of the process. By devising this pattern, your employees can handle every customer interaction in the same consistent fashion. If there’s a bottleneck in the system due to consistent mistakes that are made, the flow chart will show it quickly.

Large companies typically have a flow chart in place for every conceivable customer interaction so that employees know how to behave each time they come across them. As problems arise, the chart is revised to keep the flow smooth and to alert new employees how to handle the unexpected. Small firms can learn from this technique of efficient customer service.

Sample Flow Chart: Order Processing: Before establishing a flow chart, you should identify each task involved in processing an order and assign them to distinct groups of employees, ensuring a smooth flow of information and goods. The following are typical order-processing tasks:

__Opening mail
__Order separation and batching
__Processing and data entry
__Final audit and inspection
__Final check
__Measuring results

Which groups of individuals within your company will handle each of these tasks? ________________________________

Specify the steps for the order-processing procedure in a written document for all employees to learn. Begin by taking notes while you're on the phone with customers. You know exactly what you like to say to customers; by describing it in writing, your employees and associates can address customers the very same way. Add to your notes by observing key employees who do an excellent job serving customers. What do they do that is special or unique? How do they make customers feel at ease? Compile your observations into a book, such as a three-ring binder.

You must also build into your flow chart a device for obtaining customer feedback and measuring satisfaction. Depending on the value of each order or customer, this device can be as simple and inexpensive as a postcard that is included with each order. This simple tool may give you a non-intrusive way to find out what your customers really think about your firm's products and service level. A customer satisfaction survey may also be included as part of a warranty registration card. Sample questions for the postcard or survey include: Were you satisfied with your recent purchase? Were you pleased with our company's service? Are there any ways we can serve you better in the future?

What other questions do you want to ask your customers that you could include in a survey or postcard?

If the order value is especially high, a personal phone call is always a nice way to thank the customer after the sale and ensure that everything about the product is satisfactory for them. Car dealers that do this get repeat customers. Physicians who do this build their practices faster. For really large sales, the salesperson should occasionally call on the client personally.

Handling Customers When a Problem Arises: When things go awry, a good customer service program can save you and your customers a great deal of grief. One person or team should be assigned to handle customer problems and complaints. For customer problems that can't be resolved at this level, a higher level manager should be assigned.

Again, a flow chart is a valuable tool for handling such problems with customers. It is especially important in these circumstances — when customer tempers may flare and accusations are made — for your employees to know how to remain calm and defuse the situation.

Sample flow path for addressing a customer problem:

  • Listen to the grievance in its entirety.
  • Validate the customer's feelings by saying, "I understand how you must feel. I’ll do everything in my power to find a solution so you’re totally satisfied." (Never say, "That’s our policy," or "That’s the way it’s always been done here.")
  • Ask the customer what solution he or she would prefer. For example, "What would you like us to do to resolve this for you right now?" or "If you want to offer a suggestion or a solution, I’ll be happy to listen."
  • When a resolution is proposed, restate it and ask if you are correct. If the suggested resolution is possible, agree with the customer and ask if he or she is satisfied. Send a card to the customer thanking them for the opportunity to be of further help, along with a response card to create a paper trail for the transaction.
  • If higher authority is needed to approve the resolution, explain that additional permission is needed and offer to call the customer back at his or her convenience. ("I’m sorry, but that resolution is above my level of authority. I’ll be happy to propose this to my manager and call you back by 5:00 this afternoon. Would that be all right?"
  • If the manager approves the resolution, repeat steps 4 and 5.
  • If the manager does not approve the resolution, explain the reason to the customer (over a dollar limit, not practical, etc.), and attempt to offer two alternative solutions to complete the resolution at that time. If accepted, see steps 4 and 5. If rejected, have final back-up offer ready. Secondary offers should be well thought out.
  • If the customer still does not accept the resolution, tell him or her that you understand their position and are sorry you could not resolve the problem to their satisfaction. Tell them you will submit a written report on the situation to a manager, who will personally call them. This gives customers a final chance to decide if their grievance is silly or absurd, and it gives them a last "out," knowing the report will be presented to management. This should also lessen customer anger.

Each step of the customer service resolution process must be documented on paper or in a computer archive, in case of future litigation. A paper trail should be initiated with a complaint number (which may consist of the date followed by the customer number) so files may be easily retrieved and reviewed by management or attorneys.

Dealing effectively with your customers: Now that you have created and established a service vision, and have created a customer service plan, the next step is to improve your communication and problem-solving attributes. The method of communication is as important as what is communicated. Greet your customers appropriately. Make them comfortable from the beginning. The initial customer contact is very important, and first impressions can often win or lose a customer. Make your customers feel special. Listen to them attentively to find out what they like or dislike. Ask if you can help your customers. Be constructive at all times, avoid being defensive, and never lose your temper. Ask customers to give you letters or verbal recommendations or referrals. Invite your customers back to your office, store or business.

Hiring a staff that has the ability to solve problems is critical to the growth of a business. Problems will always arise; accepting responsibility for the problem and effectively managing the situation can turn a negative situation into a positive one. If problems are resolved quickly, customers will continue to buy and refer others. It is very important to listen effectively. One must understand the problem, identify the cause, discuss possible solutions, and solve the dilemma. This is not an easy process to learn, and an effective manager or owner must train all employees in the process of not only crisis management but also in the art of solving problem. Becoming an effective problem-solver takes effort, motivation, dedication, and pride in one's work and one's self-worth.

Educating Your Staff

Your staff must understand and buy into the organization's service vision and customer service plan. Time must be set aside for staff education and orientation to the customer service plan. You must demonstrate by example the customer service philosophy on a daily basis. Role-playing sessions can be very effective. In these sessions have employees assume various roles: employee, owner, a happy customer and a disgruntled customer. During these sessions, have your staff play out various customer interactions the way they would handle them. Offer constructive feedback when you see areas that can be improved. Above all else, remember that it takes patience, time and a nurturing environment to develop a truly service-oriented employee.

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