The growing significance of meeting—or exceeding—customer demands for quality service has special implications for small businesses. It is in this arena that small companies can set themselves apart from competition. According to a recent three-year study by the National Federation of Independent Business, small businesses that put heavy emphasis on customer service were more likely to survive and succeed than competitors that emphasized advantages such as lower prices or type of product.

According to the Small Business Administration (SBA), quality customer service begins with your employees. Some of the most effective "extras" are really basic adages of conducting good business, such as answering the phone by the third ring, treating customers respectfully and courteously at all times, greeting them by name, promptly answering their questions, and getting back to them with a response as quickly as possible if you don't have the answer handy.

If you want your business to be successful, you must listen to customers and talk with them as well. The SBA advises training employees to focus on what the customer is saying, then tailoring products or services to meet their needs. Consider the potential consequences if you don't: the Customer Service Institute reports it costs five times as much to attract a new customer than to keep an existing one satisfied.

Moreover, a good relationship with customers necessitates paying attention to every link in the distribution chain. This means listening to everyone who helps get your products to market and asking them for suggestions on improving your service. Be sure to take advantage of feedback from employees, especially those whose everyday job is dealing with customers. Lastly, set standards, make sure everyone in the company understands them, and then reward employees for achieving your service goals.

No business, whatever its size, can afford to take customers for granted. In order to remain successful, you must give your customers what they want—not what you think they want.

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