Shep Hyken knows a thing or two about customer experience.
He needs no introduction in industry-wide circles, but in case you’re not familiar with his name: Shep is an award-winning customer service and customer experience speaker, a New York Times and Wall Street Journal best-selling author, A.K.A the Chief Amazement Officer of Shepard Presentations.
I talked to Shep as I was intrigued by his story and what we can learn from his vast experience in the industry.
Customer experience is a topic I often cover at Thematic, and we regularly speak to businesses who are struggling to understand their customers. We help them by providing an advanced text analytics solution.
When asked when he started his business he says with a smile:
“Well I started my business probably before you were born. Seriously though, I’ve been doing this a long time”.
He knows his stuff, basically.
In 1983, Shep founded Shepard Presentations and since then has worked passionately with hundreds of clients ranging from Fortune 100 size organizations to companies with less than 50 employees.
As a well-known speaker on customer service and customer experience, one year he delivered 189 speeches, traveling all around the world. His schedule is not quite as full-on these days, having hired trainers that deliver his material at global events.
Today, Shep fills his time by writing best-selling books and delivering an on-demand online virtual training program.
Here are the 10 biggest tips I pulled out from our casual conversation, which quickly turned into a best practice learning experience, where I could pick the brains of a business master:
Tip 1: Don’t wait for them to come to you
Shep started young: “I’d been doing my own business since I was about 12 years old. I had a magic-show birthday party business and I built it up. It was very successful, I was making quite a bit of money for a young little kid”, he remembers.
He learned the basics of customer service first-hand from doing the hard-yards working in a retail store, learning some fundamental lessons that he’s taken on board ever since.
“When I was working in retail, you would walk to [the customers], you’d ask to help them, you don’t wait for them to come to you. You know, [it’s the] little things”.
“I had no idea that that was called customer service, and when I got out into the real world after college and started doing my research I realized this is something that I’m interested in, learning more about and talking about because this is what I believe in and what I’ve been doing. So, that’s kinda how it started,” Shep recalls.
Tip 2: How to stay competitive on a global scale
Shep says: [Customer service] “is tremendously different internationally, depending on where you go and what the culture dictates. I would walk into a store shocked that nobody would come up to me and ask to help me, but you know what, that’s the culture in some places.
“I think that in North America, we do a really good job of trying to create a great customer experience, and if you get into the Asian part of the world they do a phenomenal job of what I would call really delivering an exceptionally high level of interaction – one on one, especially in the hospitality industry. Unbelievable! Same thing with the Middle East”.
“Even though we keep talking a big game over here in the US, I think that the game still has a long way to go, and other parts of the world are catching up. They’re recognizing the value of a good service experience”.
How is globalization changing customer service? “The world is getting smaller in the sense that it used to be if you were in a country you would never think of being able to buy from or do any business with someone on the other side of the world”, says Shep.
[Today], “it’s easier to get what you need […] and as a result, the expectation of customers is that they start to become accustomed to what good service is regardless of what country they’re in, and they’re going to start to expect that from everyone”.
To be able to compete globally, small players and challenger brands need to exceed customer expectations to stand out.
Shep gives an example: “I went to Nigeria almost two years ago and they said, ‘we need to Westernize our customer service if we want to remain competitive.’ Not just in their own community but globally. I was visiting call centers in Nigeria that want to compete with call centers in the Philippines and even the US.
They’re not going to do it unless they step up and meet, if not exceed, the expectations of a discerning customer.”
Tip 3: What’s the most important measurement?
What about measurement, what metrics are key for companies to measure and why? “Measurement is so crucial to the whole success of any customer experience programme,” says Shep, and mentioned the well-known quote from Peter Drucker: “you can’t manage what you don’t measure”.
According to Shep, scoring systems such as Net Promoter Score (NPS) and CSat that allow you to understand customer feedback and then find ways to improve based on that, are crucial to success, “so, let’s make sure we run that or scale that across the whole organization”.
The one critical stat that’s often ignored
“I just talked to a retailer about what they’re using to measure customer satisfaction. Turns out they’re using NPS with one or two additional surveyquestions. That’s great, and they’re awarding [staff] and giving incentives and awards based on [increased revenue]. Outstanding!
But, there’s another critical stat that is often ignored which may be the most critical stat of all, and that’s: ‘when did the customer come back and how often?’ That’s it!”
Shep is a self-proclaimed huge fan of NPS, as he says, “it’s one of the most important stats in the world to look at.” But, “customer behavior is really a powerful statistic versus customer intent, which is what NPS is”.
For Shep, an important customer experience measurement for companies is, more than anything, repeat customers, because when they come back they typically spend more. “When someone has a repeat pattern of coming back the spend on average is more than if they just came back once every so often. You know, they’re not truly loyal”.
The Loyalty Effect = huge potential profit increase
With regards to statistics, Shep mentions Bain & Company’s well-known stat in their book “The Loyalty Effect”. [It’s] “probably like 20 plus years old, but it struck me, A 5% increase in customer loyalty could be a 95% increase in profit. Think about that. So even if it’s 1% more, if you can just tweak it and stop the churn by 1%, what does that mean to your business? It’s huge!”
Tip 4: How to get customer referrals without being awkward
Many companies these days live or die based on recommendations, especially B2B services. The credibility and trust elements are a priority for clients wanting to invest their hard-earned money. What if you’re a retail or online business wanting more customer referrals but finding it hard to get any?
Shep’s has some advice: “What about an incentive that says “Hey, if you recommend us, we give you a free month, and we give your friend a free month.” So, you both get something out [of it].
“What I love about that is that both sides win, because I always feel very awkward if I recommend you and you’re going to compensate me […] but if we can both benefit equally I think it’s a fair thing to do”, says Shep.
Tip 5: Why the customer is not always right
I love the pinned tweet on Shep’s Twitter saying: “The customer is not always right. (They really aren’t.) But, they are always the customer. So, treat them with dignity and respect.”
He explains:” let them be wrong with dignity and respect. And remember this – you’re not trying to win an argument when you’re arguing with a customer, you’re trying to win the customer”.
This is not something that happens with an “I win, you lose” attitude, unless you don’t care to ever see that customer again or care if they talk poorly about you because that’s what they’ll do, according to Shep.
Tip 6: You’ve got an angry customer – now what?
The world of customer service is full of examples of angry customers that call to complain and more or less, let off steam. What if you’re constantly fighting fires, how do you deal with a bunch of angry customers?
Shep shares his simple 5-step process to dealing with fuming customers:
1. Did you acknowledge the complaint?
Acknowledging a customer complaint is something like: “thanks for bringing this to my attention, I would be upset too if that happened to me. I can understand why you’re so angry.” That’s acknowledgment.
By the way, I threw a thank you in there as well which is kind of a bonus. Someone said the other day you should thank somebody for bringing a complaint. Absolutely 100% correct.
2. Apologize to the customer
(You can flip 1 and 2, it doesn’t matter as long as they happen first).
Say something like: “I am sorry this has happened, this is not the type of experience that we want people who do business with us to have. So, let’s figure out how to make this right.” What I’ve just done is I’ve acknowledged it and I’ve apologized, let’s figure out how to make it right. We’re moving into resolution. If you can handle it right there on the spot, great, but if not then you’ve got to come up with a way to [do that].
3. Fix what needs to get fixed
The goal is – fix it or discuss the resolution.
Just give them the plan, this is how this works. The customer service rep can say something like: “Obviously, you’re not happy today, you need this product right away so what we’re going to do is go the warehouse, we’re going to put a box out – it’ll actually go out tomorrow but you’ll have it in two days, does that work for you?”
The main take away: you’re showing that you care.
4. Fix it with an attitude of ownership
Meaning, your staff needs to have the attitude of “I may not have been the one that sold you this, I may not have even been in the office that day. Guess what? It fell in my lap and now it’s my opportunity to save the customer and renew their confidence”. Everything that we’re doing is not just about fixing a problem, it’s about renewing the confidence.
5. Do it with urgency
And finally, Shep says it’s crucial to act with urgency and speed. You have got to act like you care. What’s one way of showing you care? Move! Move fast, move right away if possible.
Tip 8: Why you shouldn’t offer discounts
Shep is not a big fan of giving things away, but as he says “sometimes it’s expected”. He tells us the story of a disappointing stay at an expensive hotel with a number of things going wrong and at check out, the hotel wanted to charge him a “resort fee” as a standard order.
Angry, he complains to the scared hotel receptionist, who offers to take things off the bill. As a customer, he may have been thrilled, but from a business standpoint, Shep argues that there is a better solution.
Obviously, by giving a discount your business loses money, and even a potential repeat customer.
Instead of giving discounts, the hotel could say: “We are so sorry this happened. Tell you what I’m going to do, the next time you come back here: 1) I’m going to upgrade you to a nicer room and, 2) I’m going to knock off 25% of the best rate you can get”.
I think if you’re going to give something away, make sure you get them back in. So, rather than saying I’m going to take this month off of your bill, no, tell you what I’m going to do. When you renew, we’re going to charge you a 20% discount for an annual renewal. We’ll take it off next month, not this month.”
That’s great customer retention advice from a veteran in the business.
Tip 9: How to be competitive when a big player enters your market
Imagine you’re a local business or have a relatively small market share in your industry. What do you do when a big player comes to town or enters the market?
Take Amazon for example. Shep has written about Walmart and how they as a big brand approached Amazon’s expansion by basically being more innovative and finding their own thing.
Shep’s first piece of advice is to not freak out and instead be strategic about the situation.
He explains: “We get scared, we start to say “oh we’ve got to match their prices, we’ve got to match their services, we’ve got to do it better than they do. No, you don’t!
You need to figure out what you’re really, really good at that Amazon [or insert competitor name] is not good at, and do that. Because if your customers appreciate that, then that’s what’s going to separate you from the competitor”.
So, is price not important?
Thanks to companies like Amazon, we’re becoming a very price-sensitive world, which in Shep’s opinion is neither good nor bad. Even Amazon doesn’t necessarily have the lowest price, but they’ll tell you this product can be found at a lesser price and they even give you a link to where you can buy it.
“But here’s the difference, you’re not buying from Amazon! Amazon asks you to spend a little more money and then if there’s a problem Amazon is amazing at taking care of you. So, the first thing I asked my clients that were scared of Amazon is ‘Are you taking care of your customers in the same amazing way that they are?’ Or at a minimum, are you giving that level of service?”.
Real-life example: ACE Hardware
Shep gives us an example from his book “Amaze every customer every time” where he talks about ACE hardware, who is a small store. They occupy approximately 10,000-15,000 square feet, which is a nice sized store but nothing compared to a huge big box store that might come in at 150,000 square feet. That’s 10x bigger. They out span ACE hardware by 30x in marketing dollars. So, what did ACE decide to do?
Focus on what they do best.
They don’t have as big a selection or the lowest prices but they’re competitive. So, they planned to get more knowledgeable reps.
If you go on Amazon you’re not going to get the most knowledgeable people. At some of the big box stores you do, but the difference ACE hardware delivers an extensive amount of training as they believe that knowledge at that level separates them from any other stores.
Shep continues: “And being a smaller store, they emphasize that you don’t have to walk a quarter mile to get to the other side of the store! By the way, did you see the size of our parking lot compared to their parking lot? We’re tiny! That means every spot is like rock star parking! Now you can park close to the building as opposed to dealing with all the traffic. ACE looked at all the opportunities which they can exploit, and they did it.”
Now, how do you compete against Amazon?
You don’t have to be the lowest price if you can be competitive.
Emphasize your personal touch, the ability to talk to someone that’s extremely knowledgeable about what they do. You stay in your lane and you just get stronger in that lane.
“What you’re really competing with Amazon on is, not just price, but you’re competing with convenience – Amazon is an extremely convenient company to do business with.
You don’t have to leave your home and you can buy just about anything in the world from them. I would bet 90% of what you can buy in the world, you can buy from Amazon if you’re in the US. I don’t know if they’re selling cars yet or what but I’m sure at some point they will”, says Shep.
Tip 10: What’s your point of differentiation?
Similar to the previous point, if you’re looking to differentiate yourself in the market, you can look at what you can do to be more convenient.
Increase the level of convenience
Shep explains how he chooses to do business with a small, independent, local car dealership when he could instead buy from a much larger car dealership. Why?
They offered him something that the larger dealership couldn’t – a concierge service. This included delivery (picking up his car when it needs a service, offering a nice, new branded car as a complimentary vehicle, and picking it up when ready, at no extra charge.
Turns out, the larger dealership offered the same service, but the difference was that they charged for it. So, the smaller dealership became competitive. More convenient, at the same price.
What can you do to reduce friction?
Another great example, companies like Uber reduce friction. You don’t have to stand out in the street waiting to hail a cab. “Now you can stand inside the building, go on your phone app and see the driver approach, even calling you when he’s arrived. You walk out and he’s there! You don’t even need to take money out your pocket, it’s just done – it’s magic! “
“That convenience not only disrupts a competitor, it’s disrupted an entire industry, which is amazing! So where can you reduce friction? Where can you become more accessible?”, asks Shep.
Perhaps as a local business, you have multiple locations, even though you’re more local and regional compared to a big business such as Amazon. Shep says that having those locations and being open at the right hours, is a pretty powerful position against someone like Amazon, where if you order something it could take 2 days to get there.
In summary, how do you differentiate?
There’s delivery, access, logistics, location and reducing friction. And lastly, then there’s technology. Do you have an app that you can provide your customers to give instant access to your company? There are different ways to become more convenient.
So there you have it folks, insider customer experience and business tips that can be applied to many universal scenarios.
You might know some of these tips already. Even so, in my opinion, Shep has this way of, especially when delivering a speech, putting it all in perspective and giving poignant real-life examples that illustrate the point well, almost like magic. I’d say that magic-show birthday party business taught him a great deal indeed.
This post was also published here.
I am the Director of Digital Marketing for Thematic - we conduct AI-powered text analytics to derive hidden insights in customer feedback. I regularly write on the subject of customer experience, customer insights, AI and the Net Promoter Score. I have 15 years of international marketing communications experience, specializing in content marketing and copywriting.
I have worked on behalf of global brands and lived in locations such as London (UK), Barcelona (Spain), Malmo (Sweden), Auckland (New Zealand) and Sydney (Australia).
Additionally, I have a Master's Degree in Media and Communications and speak six languages fluently.