Businesses establish reputations for themselves based upon how well they treat their customers over time. Getting off on the wrong track can seriously harm a business, while doing it right can produce amazing amounts of "goodwill", admiration and long term success.

What Do Your Customers Experience?

My favorite example of excellent customer service is Amazon.com. If you ever watch an interview with Amazon CEO Jeff Bezos, you'll notice something: he always talks about customers. And often he talks about customers and customer service for the whole interview. He is "obsessed" with customers.

We've all had our customer service experiences - good and bad. Here's one of mine: several years ago I purchased a large order of books and DVDs on Amazon.com for a friend's birthday. He was in the military, stationed in Saudi Arabia during the gulf war. After I picked out a bunch of great books and movies for him, I carefully entered the address of his military base and completed the order.

30 days later, he still hadn't received it. I thought I had lost $100! I contacted Amazon customer service and told them about my problem. They got back to me within 2 hours, and said -

"No problem, we'll have another order shipped right away."

In less than two weeks, my friend emailed me telling me the package arrived. Amazon had shipped it with priority status. I consistently get this type of service from Amazon.com, and as a result, I never think twice about buying something there.

For an even better story about a customer experience with Amazon, read the story in the New York Times: Put Buyers First? What a Concept. The author Joe Nocera shares an experience about ordering his son's Christmas present from Amazon that he'll never forget. In fact, now he's writing about it in the New York Times where hundreds of thousands of people will read it!

Customer Service benefits both the Customers and the Business

Although this type of customer service is expensive, it pays off.

A dissatisfied customer will tell their friends - on average 9-15 people - about their experience. According to the White House Office of Consumer Affairs, 50-70% of customers who complain will do business with you again if you resolve their problem. And if they feel you acted quickly and to their satisfaction, up to 96% will do business with you again, and they will probably refer other people to you.

Since getting new customers costs six times as much as keeping an existing one, customer service is a very good investment!

According to a Forrester Research study, 52% of people who shop online do their research at Amazon.com. This is an astounding statistic, when you consider the number of people who shop online. That's over 50% market share! And it is directly related to the trust and reputation Amazon has built through great customer service.

New Tools for Small Businesses

You don't have to be a huge company like Amazon to be great at customer service. There are a number of tools and services out there to help you engage your customers inexpensively, or even free.

One interesting new service designed to help you do this is called Get Satisfaction. Get Satisfaction's tag-line is "People-Powered Customer Service." You can create a profile for your business for free. Customers can share ideas, report a problem or start a discussion about your company.

But What About Bad Reviews!?

Many people ask: "but what if someone leaves a negative review about my business?" It's a logical concern. If you look at it as an opportunity to turn them into a happy customer, a service like this can be a powerful tool indeed.

The fact that a customer took the time to complain about your business is a huge benefit for you. Typically, a company only hears from about 4% of its dissatisfied customers - 96% just go away. And based on the statistic mentioned earlier, if you resolve their complaint quickly chances are they will stay with you as a satisfied customer!

Oh and by the way, with services like Get Satisfaction, and the online reviews in Google Local, Yahoo Local and CitySearch, a customer can go there and say something about your business whether you've created a profile there or not. So play offense instead of defense here and lead the conversation!

All businesses get the occasional "bad apple" customer who can never be satisfied. But you make it hard for those complaints to stand out when you handle your customer service openly and transparently, because you'll have a proven track record of being proactive with your customers and handling their issue quickly and effectively.

Four Tips for Providing Excellent Customer Service

Here are a few ways you can encourage customer feedback and provide great customer service:

Be proactive - engage your customers so they will tell you their issues and give you a chance to resolve them, and make them into happy customers instead of losing them to your competition.

Employ tools like Get Satisfaction to allow your customers to give you feedback and to handle customer complaints quickly and effectively.

Make it easy for customers to contact you. Services like RingCentral allow you to set up a very effective and inexpensive ($9.99/month!) customer call center, with call routing and professional voice messaging.

If you are a local business with a storefront, collect online reviews to help your best customers tell everyone why they like doing business with you. This can be an excellent source of new business referrals. Create profiles in Google Local and Yahoo Local.

Jeff Bezos was once quoted as saying:

"If you do something nice for one customer, they will tell 100 customers."

If you think of the marketing budget you would have to set aside for this type of publicity, customer service is a good investment indeed!