Customer Service And Its Vital Role In Cash Flow
A very over looked area of a business and often a vital area is the customer service of a small or large business. Large companies spend hundreds of thousands of dollars on improving customer service which is usually the most common complaint area.
Small business, although with their limited resources must still place a huge importance on service so I thought I would add this article to go over the issues and how it can impact your bottom line.
Your customer service staff is the first point of contact your customers have, when it comes to complaining about your product or service. The customer service staff has the unique ability to listen to customers patiently, make sure the sale is successful and also to get more sales. They can also solve any issues that could delay a payment. Thus, customer service has a very significant part in your cash flow’s health. Let us explore the different ways in which customer service can do this:
Rescuing A Sale
Most customers get in touch with the customer service staff when they are unhappy about a product or service, or when they need to return goods, or when there is an issue with service. If the customer service staff has access to the relevant information like details of the order, when it was delivered, etc., they can usually issue an authorization for goods returned or solve any other problem the customer might have, thereby saving the sale.
When the sales staff is well-trained and given some amount of authority, they can help in improving cash flow. This happens by customers paying on the due date, because they are happy that their problem was dealt with promptly and courteously, in turn strengthening the customer’s relationship with the company. If their complaints are not attended to, it could result in disputes and delayed payments. This would not only hurt cash flow but also be a drain on resources like time and staff used to follow up on the issue. Customer staff must also be well versed with the company’s procedures and understand how the other departments work.
The customer service staff has the ability to convert an irate customer into a satisfied one. When a customer receives defective goods, the customer care staff, when well trained, can not only ensure that the customer receives a replacement promptly but also buys more than they originally planned, because of the excellent service experienced. Therefore, customer care staff must also be sales oriented, in addition to resolving issues.
Solving Payment Problems
Sometimes customers delay or refuse to pay for goods or services rendered and there can be a variety of reasons for this. Some of these are defective products, unfinished work, problems with price, short shipments, excess shipments, non-delivery of goods, damaged shipments, sales tax issues, wrong shipments, freight cost issues, non-compliance with purchase order. In most cases, customer service arranges replacement of defective goods, unless part of a closeout or final sale. Care must be taken to ensure that accounts payable does not send reminders for payments on the due date.
Customer service also gathers information about defective products and forwards the information to top management so that they can look into the issue and take the appropriate action to correct it. This can save money, as well as arrest the problem from recurring, ensures customer satisfaction and saves time spent on resolving returned goods problems.
This is more or less similar to dealing with defective goods, unless staff is responsible for the problem. In such cases, they must either be trained properly or replaced so that the company’s reputation does not get hurt.
Problems With Price, Short And Excess Shipments
Pricing issues are handled in much the same way, with the necessary credit issued. If there are recurring problems, these need to be addressed by rectifying systems related to billing, sales, marketing, etc. For short shipments or excess shipments, the shipping department and quality assurance staff must be notified so that they can take action.
Non-Delivery Of Goods And Services
When a customer does not receive goods against an order, you should worry because it can spoil your reputation. Some reasons why goods may not be received by the customer are – the freight carrier may have lost it, the goods may be stolen, in-house theft may occur, etc. This can be resolved by pulling up the freight carrier who does not deliver, employees responsible for thefts, tracing lost shipments etc.
On the issue of damaged shipments, you need to look both within the company as well as at the carrier. Quality control and shipping must become aware of proper packaging so that goods are received in good condition. Reports related to damage must also be monitored to find out where the problem lies. If it is because of a particular carrier, then they need to be warned, taking care to have adequate insurance coverage with that particular carrier. If the problem persists, it is necessary to replace the carrier.
Sales Tax Issues
Where there are sales tax exemptions, the customer service department must monitor the related paperwork. If the exemption forms are not received in time, the sales tax is charged. Customer service keeps track of these.
Freight Cost Issues
The company must be aware when freight charges should not be charged, since some buyers prefer to pick up their own goods. Customer service looks after crediting freight charges that were billed by oversight. They also take care to check the purchase order to see if it matches the bills.
Mistakes happen, and when the wrong goods are delivered, customer care has to tackle it. They can convince the customer to keep the items at a lower price and replace the item. If this recurs, the current procedures must be reviewed and modified to prevent this from happening.
Non-Compliance With Purchase Order
Payments due on an entire order could be lost when the goods are not as per purchase order, especially in the case of international orders. The purchase order must be meticulously matched to the goods being supplied so as to not miss any instructions. In such cases, it helps to have the credit department involved throughout the process right from the order stage to avoid any payment hold ups or deductions.
The customer service department must be trained to handle the various issues that might crop up with the customer, as it can result in tremendous cost savings in terms of labor, goods, shipping costs and time. Customer service staff must have the ability to service the customer, as well as be sales-oriented, as it can enhance this critical function in the company.