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The Truth About Settling Taxes for “Pennies On The Dollar”

Every year we here from taxpayers who have IRS debt and are looking for a solution. Inevitably, they will also make a reference to the possibility of settling their debt for less than what they owe. What usually follows is a conversation about what this actually means and how most people DON’T qualify for it. Let us elaborate.

In advertising, you’ll hear companies talk about settling back taxes for 20%, 10%, or even less than the original balance. What these ads, and the sales people whom you talk to on the phone, are trying to sell you is an Offer in Compromise service package. This package is a reference to the IRS Offer in Compromise (OIC) program, which allows eligible tax debtors to pay the IRS an amount of money that is less than what they owe in order to wipe out their entire tax liability.

The phrase “pennies on the dollar” was actually determined several years ago by the IRS to be a form of deceptive advertising. As a result, they explicitly instruct licensed practitioners that using this phrase is a violation of Circular 230, which is the handbook us practitioners must follow when working with the IRS. However, since the IRS doesn’t always have jurisdiction over firms that just market these services, it comes into the FTC’s purview to look out for these deceptive marketing practices.

Some ads, web sites, and salesmen are out there trying to convince taxpayers that what you settle for is some fixed percentage of your tax debt. However, this is blatantly incorrect. There is absolutely no provision in the tax code for allowing a taxpayer to pay a set percentage of their tax liability and just calling it good. This has never existed, and most likely never will.

Instead, the amount of your OIC settlement is calculated using a very, very strict formula. What’s even better is that this formula is NOT secret — it’s available on a worksheet in IRS publication 656B.

Based on this formula, if you have equity in assets that exceed your tax debt, you simply don’t qualify. Period. End of story. For most individuals, the common thing is going to be equity in your house or rental properties, or perhaps equity in a collection of classic cars, stamps, coins, guns, art, etc. If the value of ANY of that stuff is greater than your tax debt, you do not qualify for the OIC and cannot settle for “pennies on the dollar” – there is no way around this.

In the same vein, if you are a high income earner, it’s also highly unlikely you will qualify for the OIC. The reason for this is that the IRS only allows certain amounts of money every month as “eligible expenses” for housing, cars, food, etc. If your lifestyle exceeds these amounts, the IRS doesn’t care — they will only allow you to claim the National Standard expenses. Any monthly income over those amounts gets multiplied by either 48 or 60, and THAT number goes into your offer amount.

In these circumstances, you may qualify for a period of up to 12 months to make a “lifestyle adjustment” and reduce your living expenses to come into line with IRS standards. This will often involve selling luxury homes and getting rid of toys such as cars and boats. Keep in mind that these items are all covered by your tax lien, so any proceeds from the sale of these items technically is owned by the IRS, and should be paid over to them. A good tax representative can assist you with structuring these sales so that both you and the IRS get something out of it.

In closing, beware of anybody promising that your tax debt can be settled for some fixed percentage. That’s not the way it works and a skilled professional can show you if you stand a chance at qualifying for the OIC. Anybody trying to sell you on the percentage idea might as well be selling you swampland in Florida, and you’ll be best served to seek assistance elsewhere.

By Administrator|2013-06-05T12:34:33-06:00June 5, 2013|Categories: IRS Talk|Tags: IRS Debt, IRS Debt Help, IRS Offer In Compromise, offer in compromise, OIC, OIC CPA, Owe $10K in tax debt, Settle Tax Debt, Settle taxes for pennies on the dollar, Tax Debt, Tax Debt CPA|Comments Off

Tips For Nailing Your Job Interview

In these trying times, getting called in for an interview can be your one and only shot at getting hired. With that in mind, every interaction you have with a company’s staff must be carefully planned so that it’s not wasted.

We’ve conducted some job interviews back in our corporate days and you’d be surprised how many people miss simple opportunities to seal the deal. Here is what always impressed us with a candidate:

• Come prepared. Do you know about the role? Do you know what our company does? Do you have a copy of your resume? Coming prepared signals that you are interested and bosses like “hungry” candidates. It also indicates that you’re the type of person who does their homework. As a manager, whom do you want sitting next to you in that weekly update meeting, the staff who has a notebook full of answers or the person who barely remembered the meeting?

• Sell what makes you a fit. You might not have all the aspects of the job description. But if you made it this far, it means that they like what they see on paper. So sell yourself! Tell them what you do well, why you’re a pleasure to work with and how you think you’re a fit. When it boils down to it, the decision on who to bring on board is often swayed by who was better “liked.” If two candidates are equally matched, the one who typically wins is the one with the better selling skills.

• Tell me how you’ll make our lives easier. Hey, bosses have enough on their plate. Ideally, they would like it if you could come in on day one and pick up the job with minimal assistance. Since that isn’t reality, if you can tell them how you’ll make their life easier, you’ll stand a good chance of getting a job offer.

• Be gracious. Selling yourself is one thing, being cocky is another. Always speak humbly of what you can do, your competitors and your former employers. No one is perfect and there is always someone whom is better than you. It’s okay to be confident, just don’t let that boarder on being arrogant. Also, always follow up the interview with a thank you note or email. Bosses always remember who did/didn’t send one.

When it comes time to make a decision, hiring managers take many things into account. However, a lot of what is asked/garnered during the interview process is really more about you as a person. People like to work with others whom they can relate to, get along with and feel will do the job. If you follow the tips above, you just may sway things in your favor if it comes down to you and another candidate. Good luck out there!

By Administrator|2013-05-29T13:18:31-06:00May 29, 2013|Categories: Business Talk|Tags: bosses tips for interview, interviewing, job interview, job interview tips, tips for haivng a good interview, tips for job interview|Comments Off

Requirements of IRS Installment Agreements

It’s not uncommon for taxpayers who owe the IRS to start to panic when they are faced with a sizable balance. However, there are options if you can’t pay your balance all at once. In this post, we outlined how to deal with the situation. In it, we also discussed the IRS monthly payment plan referred to as an “Installment Agreement” or “IA” for short. In this post, we’ll discuss what you need to do in order to set up an IA.

The actual process of setting up an IA is pretty straightforward. The challenging part is making sure you are compliant and that you actually meet a number of basic requirements. We assist our clients in meeting these requirements, and then negotiate the actual payment amount after it’s determined that you are eligible.

So without further ado, here are the requirements one must meet to be eligible for a payment plan:

File any missing tax returns or substitute for returns (SFRs).
Begin making current estimated tax payments (for self-employed people) or Federal Tax Deposits (payroll tax payments for businesses), if applicable.
Disclose specific financial information, such as income, expenses, and assets.
Demonstrate that you cannot pay off the tax debt from savings, a loan, or other means.
If you owe less than $10,000 in tax, be able to pay off the entire debt in 3 years or less. If you owe $50,000 or less, you get 5 years. If you owe more than $50k, there is no time limit.
Not have defaulted on another IA in the past 5 years.

So as you can see, the requirements aren’t all that challenging. However, the most difficult part of this process for self-employed and small business taxpayers is #2 — finding the money to begin making payments on their CURRENT tax obligations. This involves some painful elimination of expenses and changing of priorities that most people don’t like, but it’s necessary. Remember, the IRS is the most powerful creditor that we have and they can really make a mess of your life if you don’t work with them. Thus, it’s best to get them taken care of, even if that means damaging vendor relationships, not paying other bills, etc.

If you’re eligible, then obtaining a payment plan is actually pretty straightforward. But as mentioned above, getting into current compliance is a critical first and second step, and is the most difficult part for most taxpayers.

Until next time…

By Administrator|2013-05-23T11:35:10-06:00May 23, 2013|Categories: IRS Talk|Tags: Installment Agreement, IRS, IRS installment afreement, Payment, requirements for IRS installment agreement, Tax|Comments Off

Using a USP to Differentiate Your Business

Being in business is tough stuff. No matter how small or big you are, it never gets easier to achieve success. Combine that with the fact that you have hundreds if not thousands of competitors out there, and the job just seems to get harder. But it doesn’t have to be that way; not if you can differentiate yourself.

You see, there are numerous reasons businesses fail. Lack of capital, poor planning, poor management, etc. But an often overlooked cause is simply not being different enough. You see, most customers don’t know your business from another one, unless you tell them WHY they should purchase from you.

Rollo May, the distinguished psychiatrist, wrote a book called Man’s Search for Himself, and in it he writes: “The opposite of courage in our society is not cowardice … it is conformity.” Within that single sentence, you have a powerful cause of so many failures. Conformity — people acting like everyone else, without knowing why or where they are going.

So here you are with an idea, product or service that you think is better than what is currently on the market. Your quickest way to ensure success is to determine your Unique Selling Proposition (USP) and then tout it to the world. Here are some tips to help you come up with your USP:

Analyze the competition. What do they do well and where do they miss the boat? What don’t they offer that you do or could? Where are they geographically located in relation to you? The key is to look for holes in the market to identify where you may be able to carve out a niche. Remember, you never go head-to-head with a competitor…well, not at first at least.

Outperform on your core values. At Wilson Rogers, we place a great importance on servicing the customer relation aspect of our customers. What this means is that we go to great lengths to let customers know that they are NOT just another number on our P&L. They are a person/relationship whom we value and we want them to know that we care. This translates into customers who feel valued and they note this difference when comparing our company to our competitors. Figure out your core value and then perform on it better than anyone else dare even try.

Determine what sets you apart. Maybe you’re the only jewelry store with a designer on the premises. Or maybe you’re a hand car wash that keeps a detailer on staff. The key is to figure out what sets you apart that you can proclaim to your customers. Once you identify what that claim is, you have an easy USP to hang your hat on.

Use consumer pain points as inspiration. Sometimes, you just AREN’T different from your competitors. Thus, when all else fails, list the main frustrations customers in your industry face and devise a USP to satisfy them. For example, if you are a plumber, you may offer a one hour service window for customer appointments. This can be used to address the frustration of customers who call a plumber who says they will be there at 2PM, but then call at 4PM and state that they can’t make it because they’re behind on a job they had earlier.

Offer a guarantee. They key here is to focus on offering a cure for common customer frustrations. Going back to our plumber above, they might guarantee that if they don’t show up within the last 15 minutes of the scheduled hour window they will provide the first hour of work free. Or they could guarantee that they’ll leave the house cleaner than when they arrived, and show up in uniforms with belts. The goal: conquer plumbers’ reputation for lateness, messiness and embarrassing rear views.

Hey, I learned from the best of ’em!

Be specific. Baskin-Robbins was known for its 31 flavors, even incorporating “31” into its logo. You might be a heating company that’s on call 24/7/365, a manufacturer that offers 1,000 different SKUs, or a gym with 99 benches. The key is if you’ve got it, flaunt it and tell the world!

Always deliver. The plumbing contractor mentioned above might established a series of systems to make good on its guarantee. This could include equipping employees with handheld vacuums, booties and belted uniforms. But whatever your USP is, make sure that you can deliver on it every single time. If you can’t, it’s useless and you shouldn’t go through the effort of even creating it.

By Administrator|2013-05-19T15:48:21-06:00May 19, 2013|Categories: Business Talk|Tags: Competition, creating your USP, Rollo May, Unique selling proposition, using differentiation in business, USP|Comments Off

Poor Service Will Cost You Business

So over the past week or so, we were really having some issues with the service provider who hosted our blog. First it started with intermittent outages and the inability to log in. Then it escalated into hours and days where we couldn’t access our site. Then the actual blog was having issues where it would be down for hours and days at a time.

Somewhere during this crazy timeline we realized that we hadn’t backed up ANY of our posts. So during one of those windows when we could get into the site, we took a copy of everything. Yet at this time, we still weren’t dissatisfied enough to completely abandon our relationship. It was the NEXT time that the blog went down for 3 days that we said we had finally had enough.

So what lessons are to be learned from above?

1. Customer Service Does Matter Many people think that customer service is a perk that isn’t essential to a businesses success. But in today’s hyper social media charged world where you make one customer mad and 3 million people here about it in 2 minutes, you better think twice about offering bad service.

2. Customers Will Forgive You Hey, we’re all human and that means that we all make mistakes. If you’re quick to own up to your faults, then most people will give you a second chance. Face it, in America we just love the underdog and the comeback kid. But you only get a few chances to get it right before you get labeled a looser.

3. You Only Get So Much Rope If you can’t correct the root cause, own up to it, let people know what you are dealing with and let THEM make the decision to stay or go. But if you keep offering bad service, you’re going to make the decision for them. And speaking from experience, it probably will not go in your favor.

By Administrator|2013-05-13T21:39:43-06:00May 13, 2013|Categories: Business Talk|Tags: Business, Customer experience, Customer Management, customer service, poor service will cost you business|Comments Off

Our 2nd Tax Season

So last year was our first season with the new office. Based upon what we learned, we planned to make 2013 even better and we’d have to admit that it was. While we can’t share specifics around all our numbers, here are some of the things we can volunteer:

We engaged roughly 112 clients and processed 130+ individual and business returns (not including state returns)
Experienced revenue growth in excess of 150%
Processed returns in 10 new states
Completed our CTEC certification so that we can now prepare California tax returns (we processed 2 for this season)
Placed more returns on extension that in years past; largely due to not being able to service demand in the last 3 days of the season (from clients like the one pictured below)

No, we can’t finish your return before the 15th!

What went well

Delivering excellent customer service. One of the ways in which we try to different ourselves from our competitors is by focusing on our relationships with our clients. We have always sought to treat our customers like they were members of our family and make it a point to deliver excellent customer service. We think that this must be working pretty well as we received 30% of our client growth from existing client referrals.

Leveraging free advertising. Our company uses social media, posts ads in places like Craigslist, has profiles on platforms such as Yelp, Bing, Google etc. What’s common about all of the above is that is cost us nothing more than a few minutes of time to set up and maintain. Yet each one of these platforms more than pays for itself in that it brings us at least one new client per season. With that being said, we think we’ll continue to make sure our presence is felt out there in the internet ethos.

Deepening our partnerships. In 2012 we had a few independent sales reps who helped promote our brand. In 2013 we increased that number to around 6. Each one of these individuals helped us significantly expand our presence and was responsible for a fair amount of growth. Likewise, we forged another partnership in early 2013 with a 3^rd party that drove significant business to us this year. We look forward to continuing all these relationships next year.

What we’ll adjust

Marketing that isn’t working. Each year we test out some things to see if we can get an edge on our competitors. Some of it works and some of it doesn’t produce much of anything. The key is to be able to track what a marketing piece is doing so you can know what should be retained and what needs to be scrapped. With that being said, we’ll probably shift some of our dollars out of print, organizational and media advertising. We have some ideas of what we want to test next; such as Jared Rogers’ mug on a bus bench or big billboard on the side of the highway so stay tuned!

Aspects of our client relations program. Existing clients are how we generate a lot of our new business. Thus, it’s pretty important that we engage them on a regular basis. But when certain things don’t yield the engagement or interaction you would like, then maybe it’s time to shake things up. On this front we’ll probably modify our newsletter program and reduce the frequency of it. In its place we plan to increase some of the other ways we “touch” our clients such as birthday cards, holiday correspondence, biannual client calls and increased classes/workshops.

Our commitment to working smarter. One of the epiphanies we had this season was how much more lucrative it was to work with our corporate clients on a revenue per hour basis. Jared has a pretty good background working with Partnerships and S-Corps, which in turn sometimes have problems because they weren’t set up correctly. To that end, the firm may make a switch to more actively seeking these clients as opposed to individuals. While this doesn’t mean we’ll abandon taking on individual tax clients, it does mean that we will place some marketing efforts towards attracting more corporate clients. Hey, if you can make 3 times as much revenue in the same amount of time, doesn’t it make sense to work a little smarter?

2014 will mark our 3^rd season with the retail office and we are truly hoping that it is more successful than our wildest dreams. To that end, keep your eyes peeled as we’ll be making many of those adjustments noted above in the coming months. How knows, maybe next year we can exceed the growth we achieved in 2013. If that happens, we think we’ll need to start hiring some more folks before Jared collapses from exhaustion!

Until next time…

By Administrator|2013-04-30T12:27:20-06:00April 30, 2013|Categories: General Ramblings|Tags: how to grow your tax business, our 2nd tax season, our first tax season, our second tax season, our tax business grew, we grew our tax business|Comments Off

How To Deal With IRS Debt

So these little envelopes that read “Official Business – Penalty for Private Use, $300” kept showing up in your mailbox. You kind of had an idea of what they were about since they said they were from the Department of The Treasury. But you figured that if you ignored them they might go away. Or maybe you just needed a little more time to save up some money so that you could settle your debts. But time kept passing, you never settled up and the letters kept right on coming. When you finally decided to open one of those envelopes, it said that the IRS was in the process of levying you. Now what?

If you are faced with tax related debt, it’s important that you take the following steps as soon as you can:

Own the situation. All difficult situations only get worse the longer that you prolong dealing with them. Think about it, does that achy tooth get better by itself? Will that funny noise your car is making just go away if you ignore it? Do those termites in your house stop munching on everything if you just pretend they aren’t there? The answer to all of the above is no. The first step to dealing with tax debt is to own up to it and start the process of resolving it.

Assess the damage. We recently were dealing with a client who hadn’t filed taxes for 6 years. They didn’t want to deal with the situation because they figured they owed thousands of dollars. Well, when we prepared their returns it turned out they only owed about two thousand dollars – initially. Because they didn’t deal with it early on the IRS penalties and interest just about doubled the initial balance owed. Thus, it’s important that you assess just how much is owed as soon as possible. Our experience has been that the situation typically isn’t as bad as a taxpayer thinks. Additionally, if you are willing to work with the IRS you will find that they’ll reciprocate.

Seek professional help if needed. Some tax debts can be settled without too much professional assistance. Did you know that if you owe $50,000 or less in combined individual income tax, penalties and interest you can apply online for an installment agreement? Yup, no need to speak to anyone at the IRS or have a professional get involved. Now that is, of course, if you can make the payments. If you owe a lot, don’t have substantial assets or just can make any sort of “significant” payment, then maybe you should have a professional look at your situation. They may be able to recommend options that can help you pay your debt AND not put yourself under financial stress while you do so.

Ensure that your professional is qualified. There are lots of boiler room tax resolution firms out there that will promise you they can settle your debt for pennies on the dollar. When reviewing any firm, make sure that they have the following:

Professional, and Useful Website
Successful Track Record
Friendly, Helpful Representatives
Easy-to-Understand Fee Structures
Free Analysis and No Guarantees

Figure out your options. When it comes to tax resolution, many people hear the advertisements touting how they can settle for less than they owe (i.e. an offer in compromise). While this is in fact true, this is not the case for 80% of taxpayers because they will not qualify for an OIC. You have to remember that the IRS is the collections arm of the US Treasury and that they are not in the business of giving away free money. With that said, tax resolution typically falls into the following categories:

File unfiled tax returns
Dispute the tax debt on technical grounds
Request penalty abatement
Request innocent spouse relief if the debt was the fault of your spouse or ex-spouse
Pay the tax debt in full
Request an installment agreement
Put the debt into currently not collectible status
Apply for an offer in compromise
Await expiration of the collection statute expiration date

Move forward. Once you outline your arrangement to resolve your tax debt, make sure that you have a plan in place so that you don’t create any new debt. For example, if you receive most of your income via 1099, make sure that you make estimated payments though out the year. Lastly, take a personal vow to never generate tax debt going forward. While there are numerous people you can owe, the IRS is really the only entity that can make your financial existence almost unbearable if you let it get that bad. Thus, let’s all try and stay on their good side shall we?

Until next time…

By Administrator|2013-04-28T23:01:06-06:00April 28, 2013|Categories: IRS Talk|Tags: dealing with tax debt, dealing with tax levies, dealing with tax levy, dealing with tax liens, irs notice, IRS notices, offer in compromise, OIC|Comments Off

Growing Your Business Takes Time

When many entrepreneurs begin their new venture, they often believe that things are going to just “sort” of happen. You know, we’ll come up with some financial projects for our business plan, find a location, open for business, customers will love us and we’ll grow like gangbusters. Right?

Unfortunately, the startling reality for many new businesses is that the “grow like gangbusters” phase often takes a lot longer than you originally projected. Why? Well, sometimes new entrepreneurs go into business with incorrect assumptions. These can range from the amount of funds needed to start the company to the lift they expect from their marketing campaigns or just the amount of initial/repeat business they will get.

This is why we often advise those bight-eyed and bushy tailed entrepreneurs that come and see us for a consultation that they need to “double down” on their numbers. No matter how good their assumptions are, they will need to double the amount of money, time and effort they originally thought they would need if they are going to be successful. We then also tell them that they need to focus on the following:

Marketing. Build it and they will come. Well…only if customers have a need which you can satisfy, know where to find you and can see that you have benefits that your competitors don’t. In order to communicate all of the above to your new would be customers; you better make sure you have a marketing plan. And sorry, word of mouth is not a marketing plan. It is a component of your marketing plan, and in all honesty it’s one of the “weaker” ones as you are “hoping” that your customers will go out and sing your praises to everyone they meet. Instead, come up with 6-10 mechanisms that you will use to promote your company/product and actively work on them each day. They don’t have to be expensive, but you do need a plan and a number of marketing vehicles if you seriously want to survive the startup phase.

Sales. Marketing brings the people to your establishment. Sales then conveys what you have to offer and why the customer should purchase it. Without marketing you have no sales. Without sales, you have no work to perform or products to make or services to provide. Thus always remember this; no matter what you “do” in your business, that is actually the tertiary stage of operations. You are a marketer FIRST, a sales person SECOND and then (and only then) are you a baker, nail technician, bookkeeper, dance instructor, socialite, etc.

Good customer service. We’ve spoke about this topic at length, but it needs to be emphasized. If you want customers to come back, make sure you offer good service. You can be the best at what you do and offer the best product, but if the customer has a bad experience, you can kiss their repeat business goodbye.

Shoot for the moon. Sometimes us humans really want to be failures but at other times we are just afraid to succeed. Honestly, sometimes we are petrified by what would happen if things actually went well. What if I got that job in California? Then I’d have to uproot my family and move to take it. What if our business grew at 500% next year? Man, we’d have to hire people and I’d be really busy. I kind of like things they way they are. Maybe I just won’t try to grow “that” much next year. Well let us clue you in on something; it’s actually fun to deal with some of those problems. So don’t sell yourself short. Don’t be afraid if your wildest dream comes true. Shoot for the moon and deal with the “problems” once you have them, not before you get them. Trust us; we think you’ll be happy with the result.

By Administrator|2013-04-25T15:33:39-06:00April 25, 2013|Categories: Business Talk|Tags: customer service, growing a new business, growing our new business, growing your business takes time, how to grow your business, marketing, sales|Comments Off

Keeping The Faith

It’s been a while since I’ve posted anything about my escapades within the company. Part of that was because we had a pretty good tax season; which we’ll share via a post in a few days. However, another reason was because I had been dealing with a roller coaster of emotions during this same time period.

You see, back when I took the plunge to head up Wilson Rogers on a full time basis, my wife and I cut a deal. 3 years. Yup, that was the amount of time that I had to make it work or it was back to Corporate America for me. Hey, when you have a family to support, you have to do what’s in the best interest of the unit and not what you desire. Well, this was the second of those three years and needless to say I was feeling the pressure.

While season one was okay, the financial results weren’t what we needed them to be given the three year time frame. Thus, it was imperative that season two be pretty good and then some. The genesis of our 2013 tax season went something like this:

Due to 2012 bills, the company’s cash had gotten so low that I had to make a capital contribution
The Fiscal Cliff shenanigans of Congress pushed the start of tax season back by two weeks
Our newsletter program that we had banked to bring us in some new clients wasn’t producing
I had a meltdown about mid season under the premise that things were not going to work out and we weren’t even going to hit our minimum revenue goals
I resolved to do anything and everything that I could to try and turn things around
The presence of our facility being in the neighborhood for a second season started to bring us new clients from the neighborhood
A few practitioners in the area retiring brought us some more clients
Our client referral program finally kicked in and a few rainmaker clients from 2012 gave us a nice amount of referrals
A partnership program that we had with a major company brought in more money then we had anticipated in our wildest dreams
We finished the season out strong and beat our minimum 2013 revenue numbers

In case you missed it, the turning point with our season happened in bullet number 5. I had no idea how I was going to make things work, but all I knew is that I needed to do something. And what was that something? It was keeping the faith.

You don’t have to be a religious person to buy the concept of faith. Quite simply it’s believing in something that you can’t see, hear, taste, touch or feel. It’s having the courage to push forward when everything is giving you indicators that you should stop. It’s knowing in your heart of hearts that if you keep at it long enough, things will work out.

Every entrepreneur reaches that deep, dark place that I hit earlier this tax season. It’s an inevitable part of the process of growing your business. But if you are willing to keep the faith, just know that it gets a little brighter on the other side.

Until next time…

By Administrator|2013-04-21T16:43:51-06:00April 21, 2013|Categories: Who's The Boss?|Tags: believing in yourself, having faith in business, its tough being a CEO, keeping the faith|Comments Off

When Did Customer Service Die?

Somewhere between the milkman of the 1950’s, outsourcing of the 1990’s and the e-movement of the 2000’s, customer service has lost its way. First it was mugged and then it was outright drug into a field, shot and buried.

So why did businesses and society lose its way? Why have we gone to mega call centers in foreign countries, self service kiosks and the land of touch screen this and that or just simply interacting with an app? When did we shift to a corporate environment that fails to look at the customer’s problem as their own? Some say it was when they began touting that they have stockholders to account to and their most important goal must be the profits right? But what businesses, especially new ones, need to understand is that poor or no customer service training can have a devastating impact on the bottom line.

It costs a business 6 times more to attract a new customer than it does to keep an existing one. A typical dissatisfied customer will tell 8 to 10 people about their experience. 7 of 10 customers will do business with you again…if you resolve the complaint in their favor. Moreover, if you resolve it on the spot, 95% of customers will do business again. Of those customers who quit, 68% do so because of an attitude of indifference by the company or a specific individual.

If you want to outperform your competitors in this day and age, do this one thing and you’ll see rewards a thousand times over – focus on the customer. Furthermore, if you are in the service industry such as our company, the relationship you build with your patrons is paramount. All companies are really in the business of selling convenience, profits or solutions; not their products or brands. Loyalty is created by one thing – experiences that form beliefs. Once a belief is formed, it’s hard to move away from that belief. Thus, if it’s a positive belief, you’ve gained a customer for life. If it’s a negative experience, it will hard to get that customer back.

With that said, we’ve come up with The Eight Essentials of Customer Service:

The customer is THE boss. Employees answer to managers, who answer to executives who answer to the board who answers to shareholders. Who do shareholders answer to? The customers who tell them they want what the company sells or for the company to take their product and shove it. Never forget that the customer pays your salary and makes your job possible.

Listen. You were given two ears and one mouth which means you should listen twice as much as you speak. Take the time to identify customer needs by asking questions and concentrating on what the customer is really saying.

Identify and anticipate needs. Customers don’t buy products or services; they buy good feelings and solutions to problems. The more you know your customers, the better you become at anticipating their needs. When you can do that, you can offer them solutions which make them happy to buy from you now and in the future.

Appreciate your customers. Treat them as individuals versus a transaction. Always use their name and find ways to compliment them, in a genuine and sincere way. Doing so creates good feelings and instills a sense of trust.

Understand the power of “Yes.” People don’t come into your business for you to tell them no. They came there in the first place because they wanted to do business with you. Always look for ways to help your customers. When they have a request (as long as it is reasonable) tell them that you can do it. Figure out how afterwards.

It’s okay to apologize. When something goes wrong, apologize immediately. It doesn’t take much effort and customers like and appreciate it. The customer may not always be right, but the customer must always win. Besides, if you listen to what their issue is, it may just help you improve in the future.

Give more than expected. If you do what your competitors do, what distinguishes you from them? Nothing. Yet if you give your customers slightly more than the competition, you will build a relationship for life. It doesn’t have to be much or cost a lot, just something extra that the client will value.

Treat employees well. Customers are the boss, but employees make it all happen and are in reality the lifeblood of the organization. Thank them on a regular basis and find ways to let them know how important they are. If you treat your employees with respect, chances are they will have a higher regard for customers and treat them well as a result.

By Administrator|2013-03-31T18:49:35-06:00March 31, 2013|Categories: Business Talk|Tags: customer service essentials, customer service training, how to have good customer service, ten commandments of customer service, when did customer service die|Comments Off

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