Commentary & Analysis
Retention of the Customer - Part two
by Colin Thompson Yesterday we looked at some of the key issues that are crucial to customer retention.
By WhatTheyThink Guest Contributor
Published: July 13, 2007
by Colin Thompson
Yesterday we looked at some of the key issues that are crucial to customer retention. But those were only part of the story. Here's more.
Customer Service Makes the Difference
Product quality no longer guarantees a competitive advantage. Today, it's a commodity; the customer expects it. You have to find a way to differentiate yourself from the competition. Businesses are increasingly finding that employees can be that competitive advantage. The key is hiring employees with the skills to deliver outstanding service.
Outstanding service requires:
- A sincere commitment to serve all customers at the highest possible level every time
- Clearly articulated policies about how customers should be serviced, as well as a system of accountability for enforcing these policies
- A culture that requires serving customers consistently in a manner that not only meets their expectations, but often exceeds them.
- Achieving outstanding customer service is what sets your business apart and keeps customers coming back again and again.
What Do Your Customers Think?
Offering quality service to customers isn't a mysterious process. Customers who interact with your organization every day are the ideal source for the feedback you need.
Your internal records may suggest you're doing a great job, but the only voices worth listening to belong to your customers. Find out what they want, provide it to them on a consistent basis and ask them how well you're doing. "Listen and learn" sources include:
Customers. For many businesses, the person who purchases your product isn't necessarily the one who uses it. To get a clear picture, always be sure to talk to the end-user.
Sales representatives. Often, sales reps are the eyes and ears of an organization. Based on their firsthand contact with customers, they are certain to have valuable insights for the business.
Ex-customers. Track down former customers and find out why they no longer do business with you. This can also be a valuable source of information.
Surveys are an effective way to gauge customer satisfaction. They can also measure the importance customer's place on specific characteristics of these goods, which in turn offers additional information on where to focus your customer-retention efforts.
Because of their give-and-take format, focus groups can generate better information about customer satisfaction. They allow businesses to probe beneath the surface and get a clearer understanding of why customers perceive the organization the way they do.
Also encourage management and front-line staff to take a comprehensive approach to gathering feedback. Instances include:
Point of purchase. When the actual transaction is taking place, ask the customer: "Was everything to your satisfaction?" Better yet, ask: "Was everything perfect?"
Order forms. Include a "comments" section on your order forms, making it easy for customers to provide feedback. Try this on your invoices as well.
Call free. For customers living and working beyond local area codes, install a call-free telephone number they can call with their comments and complaints. Encourage use of this call-free phone option in your mailings and handouts.
Voice mail. Install a dedicated "customer feedback hotline." Let your customers know that all messages on this hotline will be heard or read by senior management and by all employees with direct customer contact.
Turning Complaints into Devotion
Statistics report an average customer with an unresolved complaint tells nine to 10 people about the experience; 13 percent tell more than 20 people. And for each unhappy customer heard from, the average business has 26 others it never hears from.
Complaints should be viewed as opportunities, a chance to learn what customers don't like about your products or services, and what can be done to make things better. I recommend these customer retention tips for coping with unhappy customers:
Reward the customer. The first thing to say in response to an angry customer: "Thank you for bringing this problem to my attention." This "rewards" the customer for taking the time to contact you in the first place.
Stay calm. Remember that you're here to serve the customer. This is your chance to show what you can do!
Listen. Pay close attention to the customer's complaint. He'll/she'll be able to tell, even through his/her irritation, that you care about his/her complaint and that you value his/her business.
A prompt response is by far the most effective way to neutralize customer complaints. Whatever the situation, make sure it's taken care of. Nothing kills customer loyalty faster than not following through on problem resolution.
The Customers Who Got Away
Businesses have a choice when it comes to selecting their customers. Not all customers are a good "fit" for your business. Nevertheless, you should be very careful about whom you let go and whom you hang onto.
Only the CEO and/or senior management should "fire" a customer. This customer should only be let go for "just cause", either because the customer has become unprofitable or because he's asked your company to do something immoral, unethical or illegal.
Some customer defections are inevitable. Still, thriving businesses should have a strategy in place to make the most of these defections.
If customers are defecting in significant numbers, first consult your front-line staff. They know how people feel about the company and can, if properly trained, observe what's going on around them, as well as offer keen insights and possible solutions.
Figure out why the customer has stopped doing business with you. Be open to feedback about your company. Seek concrete, specific information that will lead to genuine product or service improvements.
When customers say, "I'll never do business with you again," what they're really saying is that you have to earn back their business. Given enough time and energy, you can do it.
If you want to survive in business, follow these shared recommendations and your customers are for life.
Let us remember we are only in business because our customers allow us to be!