Ministry of Agriculture, Food and Rural Affairs

Customer Service Strategies That Work

Agdex#:	846
Publication Date:	July 2014
Order#:	14-029
Last Reviewed:	April 2016
History:	Replaces OMAFRA Factsheet of the same name, Order No. 11-017
Written by:	Jessica Kelly - Direct Farm Marketing Program Lead/OMAFRA

According to a 2010 survey conducted by Agriculture and Agri-food Canada, the most important reason why customers buy local food is to support the local economy. They want to support local farmers and have direct interaction with the people producing their food.

Since many customers value this interaction, creating a customer service strategy is vital to the success of a farm business engaged in direct marketing or agri-tourism.

What is Customer Service?

Customer service is an organization's ability to meet its customers' needs and desires, while consistently exceeding their expectations.

Customer Service is:	Customer service is not:
Attention	Neglect
Courteous words	Sharp Replies
Responsiveness	Indifference
Understanding	Closed mindedness
Sincerity	Mechanical responses
Action	Delay
Appreciation	Apathy
Patience	Irritation
Giving	Receiving

Creating a Culture of Customer Service

To ensure that your business is customer-focused, it is important to create a comprehensive customer service plan. Writing down this plan will help ensure that providing consistently strong customer service becomes a habit.

A customer service plan should have five key components:

1. Customer Needs, Wants and Expectations

Needs, wants, and expectations relate to the quality of the product/service you provide but also the cost and convenience for customers to acquire them. Beyond price, customers may also think about non-monetary costs, such as the cost of their time or the perceived health, environmental or ethical cost of buying a certain product. Convenience can be about location, but it could also include the convenience of accessing information, parking, payment, etc.

To learn more about your customers' needs, wants, and expectations, consider surveying, interviewing or holding focus groups with customers. Be sure to review customer comments/complaints and ask your employees for their own observations. It may also be worth exploring the service your competitors provide. Where possible, evaluate quantitative measures such as sales and inventory data (by product if you can) to monitor what's working and what's not. These measures will help you to identify popular products and to spot trends that may lead you to identify potential new products. Evaluating sales throughout the season, week, or day may also give you insight into how to better serve your customers' needs.

2. Customer Service Goals and Objectives

These goals and objectives should align with your customer needs, wants and expectations as well as your overall enterprise goals and market positioning. Goals are most helpful when they are specific and written down.

Consider objectives related to:

• number/type of products or amenities
• attitude of employees
• cleanliness
• speed of service
• convenience of products/services
• availability of employees to assist customers

3. Customer Service Policies

Detailed policies will vary depending on your business, but some basic policies will apply to most enterprises.

These policies may include:

• display a positive attitude
• keep facilities clean and attractive
• immediately welcome customers with a friendly greeting
• be courteous and polite to customers and co-workers
• promise only what you can deliver

4. Employee Training Policies

Consider thinking about your employees as "internal customers" and your customers as "external customers." Both groups need to be treated with courtesy and respect. It is important to invest in quality employee training and to clearly communicate your goals and policies around customer service.

Training may take many forms, including:

• meetings
• job shadowing
• one-on-one teaching
• role-playing
• on-the-job mentorship

Strive to empower employees to manage customer problems and help them to develop a sense of pride in their work. To develop this sense of pride, it is vital to provide immediate and specific praise and recognition to employees for their efforts.

5. Customer Service Evaluation

The appropriate methods to evaluate your customer service plan will depend on the components of the plan.

Some examples include:

• providing a way for employees to share problems or suggestions
• observing employees to determine whether their actions fit with your expectations
• asking for customer feedback
• reviewing customer complaints
• monitoring data related to sales or wait times

You may even want to consider hiring a mystery shopper to get an "undercover" report on your business' customer service. Ask the mystery shopper to not only assess the experience at your farm or market stall but also explore the level of customer service you provide via phone, email, website, and social media portals.

Once you document your comprehensive customer service plan, don't put it on a shelf! This plan is to be used and, like many business planning documents, it should evolve over time. Update your plan in response to changes in customer preferences, the competitive landscape or internal business operations.

Retaining Customers & Building Loyalty

In today's competitive marketplace, businesses must exceed customers' expected level of service to build a network of loyal customers. Extra efforts to retain customers pay financial dividends as well. Research has shown that it costs three to five times more to replace a customer than keep one.

Customer service experts suggest that customers' perception of service is affected by five factors:

1. Reliability: providing the promised service.
2. Responsiveness: willingness to assist customers and provide prompt service, in person or through other channels.
3. Assurance: courtesy, knowledge of your business and ability to inspire trust and confidence in customers.
4. Empathy: providing caring and individualized attention to each customer.
5. Tangibles: facilities, equipment and written materials that are neat, clean and professional.

The more intimate shopping experience of direct marketing separates it from wholesale or large retail channels, but it also provides an opportunity for farmers to strengthen their connection with consumers through communication. Researchers at the University of Guelph have identified nine best practices for direct farm marketing. One of the keys is staying connected with your customers. Here are some recommended strategies for doing that:

Build a customer database

This database should include as much information as possible, such as contact information, what customers typically buy, how often they come to your farm/stall and how much they spend. A well-maintained database gives you insight into your customers. It also lets you identify different segments of customers so that you can deliver targeted information to them.

Use social media

By sharing information about your day-to-day life and your product online, you can make a connection with customers before they even come to your farm or stall. This will make an in-person experience even more meaningful.

Educate your customers

To help build customer confidence and loyalty, educate customers about your farming practices, food preparation or the nutritional value of your product. Explaining the seasonality of supply, for example, can also help to manage customer expectations.

Listen to your customers

Your staff will hear many comments from customers every day, both good and bad. Ask your staff to make note of these comments so they can help to guide your future business decisions.

Use surveys to learn more

Conduct surveys or interviews to gather information about customer demographics and shopping habits and to gauge whether their needs are being met. Free online tools such as Survey Monkey make electronic surveys simple and economical.

Customer Complaints

Many businesses work towards reducing or eliminating customer service complaints. As a growing and prosperous business, welcome complaints: they are an opportunity to recover a customer relationship and make other customers more satisfied in the future.

Understanding Complaints

Customers generally complain for one of four reasons: to seek compensation, to vent their frustration, to improve the product/service or to spare other customers from a similar experience. Research shows that only 5%-10% of dissatisfied customers will complain. Why don't more customers complain? This is primarily because they perceive complaining to be too much effort and unpleasant with uncertain payoffs or they simply do not know where to complain.

Effective Service Recovery

Investing in effective service recovery can help you retain customers. Researchers have found that 9%-37% of dissatisfied customers who did not complain planned to buy from that company in the future. However, if the customer complained and the issue was resolved to their satisfaction, this rate jumps to 54%. In fact, if the complaint was fixed on the spot, this retention rate could be as high as 82%.

When dealing with a customer complaint, remember the factors that affect how customers judge the service they receive. Empathy, responsiveness and assurance are crucial.

Keep in mind that social media provides a very instant and very public means for customers to share both their satisfaction and dissatisfaction with your business. As a result, your policies for handling complaints should include how to address complaints made on social media platforms. You may want to consider having a technology-savvy employee check your social media channels regularly. There are also online tools that will help you to track online "mentions" of your business name and products and monitor the impact of your social media efforts.

Encouraging Customer Feedback

To make it easy and convenient to provide feedback, provide numerous channels, such as comment cards, email and telephone. Be sure to promote these options on all customer communications materials, including brochures, business cards and bills/receipts.

When customers give you feedback, show gratitude rather than treating it as a hassle. To ensure that customers feel comfortable providing feedback, train and empower your employees to solve problems and address complaints effectively. Allowing anonymous feedback can also make the process more pleasant for dissatisfied customers.

Ensure that your customer service plan outlines the procedures for delivering a high level of service to customers. For example, you might specify that your staff will reply to email inquiries from customers within 48 hours. Share those commitments with customers. This will help reassure customers that feedback is taken seriously and will result in action. Better yet, highlight how you have improved your service as a result of customer feedback.

Conclusion

To deliver exceptional customer service, remember the following principles:

1. Build a customer-focused business, and sales will follow.
2. Understand your customers' needs and exceed their expectations.
3. Build a loyal customer base - a wise business investment.
4. Welcome customer complaints and resolve them with integrity and efficiency.
5. Consistently study your customers and evaluate the service you provide.

References

• Agriculture and Agri-Food Canada. 2010. Consumer Perceptions of Food Safety and Quality: Wave 3 Tracking 2010. Report prepared by Ipsos-Reid.
• Boecker, Andreas. 2013. Direct Farm Marketing Business Resources. Ontario Ministry of Agriculture and Food and Ministry of Rural Affairs.
• Conference Board of Canada. 2013. Canada's Growing Appetite for Local Food.
• Lovelock, Christopher and Wirtz, Jochen. 2010. Service Marketing: People, Technology, Strategy, 7th Ed. Prentice Hall.
• University of Tennessee Extension. 2005. Agritourism in Focus: A Guide for Tennessee Farmers, PB 1754, Chapter 5.
• Virginia Cooperative Extension. 2009. PDF.pdf">Agritourism, Pub.310-003.

Resources

• OMAFRA's Business Management website
• OMAFRA's Agricultural Business Update Newsletter