8 Customer Service Myths that Could Be Costing Your Company Money

"It's nice to be nice. It's good to be nice. But I like money. I'm a big fan of money. So if being nice can make you money. Why not be nice?" Peter Shankman, co-founder of Shankman | Honig. a new firm setting out to teach companies how to build their business by offering real customer service.

Shankman founded the site Help a Reporter Out (HARO), to help writers and sources connect via daily email inquiries. Three years ago, he sold HARO, which had 250,000 members at the time. Lately, he's been spending his time writing, speaking, traveling, and consulting, as well as sitting on the advisory boards of a number of companies.

Shankman is still interested in connecting. But now, he and his business partner, longtime friend and colleague Rachel Lyn Honig, are focusing on how businesses connect with their customers. Honig is a 20-year marketing industry veteran, frequent lecturer, and member of the Board of Directors of Advertising Women of New York.

First things first, Shankman says, is dispelling the eight major myths of customer service.

In his words...

Social Media will save a company from having to provide excellent customer service.
Wrong. Would you rather have a customer made whole after your screw up or would you rather provide an amazing customer experience in the first place, which is then shared with thousands? Companies are using social media as a crutch. It doesn't take the place of top-notch customer service. Sending a coupon after an incident in hopes of erasing it is not a strategy. It should help you amplify the stellar service you offer.

Every marketing move has to be over the top.
Wrong again. The average company does so little. So, offering just a little more care than what is offered now would be a huge step when it comes to customer service, since most of what is offered now is basically nothing.

Our company doesn't have to treat customers well because no company treats customers well and customers are used to be treated poorly.
The second half is true. But the first is not. Go above that and you've won customers for life.

You should focus on attracting new customers instead of focusing on the customers you have.
The truth is, it's much easier -- and cheaper and more effective -- to keep the customers you have (by keeping them happy) than to go fishing for new ones.

Giveaways or contests for the X thousandth new customer are a great idea.
I'm afraid not. When you reward latecomers, it's a "Screw you" to the customers you already have.

You should always say, "We're sorry" on Facebook or Twitter.
You can. But how about preventing the problem in the first place?

Shouting out "Like our page!" is a necessity.
No need. Just do great things and people will come back and visit on their own accord.

CEOs don't have to care about being nice and they don't have to care about the customer.
Wrong again. This sentiment has the potential to rain down through the entire company so that even the customer service people don't care.

Shankman says that while researching for his latest book, Nice Companies Finish First: Why Cutthroat Management is over and Collaboration is in, he learned that the simple act of going one level above what people expect can increase a company's revenue by 40%. "We want to teach companies that empowering their employees to be nice has massive payoffs," Shankman explains.

It's those payoffs that companies already seem to be clamoring for. Although Shankman | Honig is fresh on the scene, the two say they are receiving daily calls from companies interested in learning about what they're doing. And they've already landed two clients as of this writing, Wesfield's Terminal C at Newark Liberty International Airport and Steiner Sports Memorabilia.

The pair started the company because, Shankman explains, "Very simply, there's money to be made that companies are leaving on the table by not putting customer service first. Since the 70s, customer service has gone away. It used to be [that] there was no one to complain to. Now you can complain to thousands instantly."

Instead, Shankman would like to see customers sharing the good experiences that they've had. "When I have a good experiences I want to share that and when I share that, people want to come. If you go out of your way to be good to customers, they will come back and bring their friends."

In fact, Honig adds, "If someone has a good experience, he or she will share it with an average of 15 other people. If it's a bad one, on the other hand, it will get shared with 24. This is about trying to eliminate the bad experiences and evangelizing the good ones. It's about keeping customers. Eighty-nine percent of customers report not doing business with a company after having a bad experience." But 85 percent say they would stay if the problem had simply been handled.

In other words, the goal is to teach companies how to create loyalists. "Companies who are nice create 10-40% higher revenues when all else is equal. It has to start with customer service on the most basic level," Shankman explains. "Why wouldn't you train your employees to do better?"

Shankman says, they haven't done it in the past, "because they have been taught over the last 30 years that automation is key, stick to the script. But that no longer works."

It's an exciting time for companies. Honig says that 66 percent of people are willing to spend more somewhere where there is good customer service. That means more money for companies who can learn to play well with others.

It's also an exciting time for consumers. If the customer service ante is upped, companies won't be able to treat us so poorly anymore or they'll lose us to other people who are prepared to treat us fairly, kindly, and respectfully.

Hard to imagine. But it sure would be nice.

"People can say they're sorry. Sometimes it's as simple as that," says Shankman. "This is an adapt or die situation. There is so much money that companies are leaving on the table or giving away to their competitors that could be saved with a smile."