What’s the biggest asset in your business?
Is it your intellectual property or IP? Your employees? Plant and material? Maybe even office buildings?
While all of these are important – frankly the most important asset you have are your customers. Because without customers, no matter how great your product or service, you don’t have a business!
Now I can hear some of you thinking “I have wonderful intellectual property – which is unique or I’ve spent years creating”. Fine – but if you can’t actively sell it, it’s not going to be much use.
In any business the single most painful and expensive thing is getting a new customer at an affordable cost so you’d think it would be sensible to keep them coming back for more.
In our consulting and marketing workshops we demonstrate what a customer can be worth over their lifetime with you.
One example we use is Barbara’s hairdresser – Darren – who she’s been going to for 13 years.
Darren is one smart operator and really looks after his clients. He sends birthday vouchers, reminders to come in and is very particular about standards of care.
Case in point – Barbara normally has her hair done by him, but as he was on holidays, another staff member did her colour. Next time she was in, Darren took one look at it and said it hadn’t been done right – and corrected it free of charge. As Barbara pointed out, she didn’t think anything was wrong, but Darren’s standards are his.
What’s Barbara’s business been worth? Spending an average $150, 6 times per year, with a couple of good quality referrals, Darren has made $29,250! Not bad in anyone’s language.
But you don’t have to be a hairdresser to understand lifetime value.
Any Insurance Agent or Financial Planner knows only too well the value of their business is dependent on the number of long term clients they have. In their case there is no IP either. No patents, processes etc., that are worth anything without clients.
Given this it makes sense to do everything in your power to keep your customers coming back.
But sadly, lots of organisations don’t get it and almost seem to intentionally make life difficult for their clients in the name of “productivity” – their own.
Here are some of the reasons customers leave – in order of importance.
- Perceived indifference
- Poor communication
- Poor quality products or service
- Poor response to a complaint
- Over promising and under delivering
- Lack of trained staff
- Death. Yes, you will lose some because they’ve died.
Notice price doesn’t factor in there anywhere.
Perceived indifference can be the death knell for your business. We all want to feel special. We want great service, feel the provider cares and has a great attitude.
You could have the best restaurant in town, be the best hotel or the best Financial Planner. But who wants to be at the receiving end of a grumpy waiter, receptionist or even professional service provider who quite obviously couldn’t give a toss about you?
Every staff member who comes into contact with a client is an ambassador for your business. And it only takes one bad experience for many people to run to the door and never come back.
It often doesn’t take much to show people you care. Take the orthopaedic surgeon who personally rang his patient on a Sunday afternoon to ask how he was feeling after his knee surgery. A small act of a few minutes which left a lasting impression – and probably got the surgeon a bunch of referrals from others at the BBQ.
Which is where a good Customer Relationship Management system (CRM) comes into its own.
A good CRM (properly updated with customer information) will help you keep track of what you’ve promised to whom, keep your customers updated on what’s happening, send out relevant sales information and stop things falling through the cracks.
But not all CRM’s are created equal. Talk to us about the only one we recommend. A CRM which handles all your on-line and off-line communication, visitor interaction and automatic follow up.
Poor communication is another killer. Good communication generally doesn’t come naturally, is simply not taught and can become a major issue if not done right.
In my experience most people are understanding about all sorts of issues if you effectively communicate. It’s stony walled silence – that not knowing what’s going on that truly frustrates people.
The best policy is to communicate quickly and often. Doing so diffuses most situations before they get out of hand.
Once again your CRM comes to the rescue.
Forget post-it notes and other pieces of paper which get lost. You must log every customer interaction into a CRM, put in alerts to follow up and escalate issues as appropriate.
Poor quality speaks for itself – so needs no explanation!
Things will inevitably go wrong at times. It’s how you handle complaints that will make all the difference.
Showing empathy is not a sign of weakness or liability! If someone is angry, let them vent and get it out of their system. Proposing a solution before they’ve emptied their bucket will only make them angrier.
Then ask them what they’d like you to do to fix it. You’d be surprised at how often the fix will be simple or that they just wanted an acknowledgement that something had gone wrong.
Empower your staff to fix issues without having to run to their supervisors for every little thing.
And give you customers a direct line to a senior manager if all else fails. Something done extremely well by Nadish Naoroji, Managing Director of Pixel Perfect who has a specific “contact me” form on their site which sends messages to him personally. Both complaints and praise.
When I asked him why he’d done this he replied, “It keeps everyone honest. Staff sometimes try to bury their mistakes – and this way our customers have a direct line to me and I can take appropriate action to remedy situations and keep our clients happy.”
Over promising can be a trap for eager players. Don’t set artificial deadlines because you feel the customer expects it. Ask them what they need and then negotiate.
And if the deadline looks like slipping, communicate quickly and let them know. See the points about communication above.
And finally, lack of training. Some organisations think training is a waste of money – and once people have been up-skilled they’ll leave for the competition.
But what if you don’t train them and they stay?
Staff turnover is a major cost to any business. 73% of employers say best way to retain staff is to keep training them. It just makes sense on so many levels, customer retention through providing great customer service being a major one.
Don’t make the mistake of thinking your technical brilliance (whatever your field), will save the day. We all want and frankly expect great customer service. The old saying, “I don’t care how much you know, until I know how much you care” is as true now as it ever was.
There is no substitute for personal communication. It is a learned skill.
Which brings me to my last point.
If you feel your customer retention and communication (be it your own or your staff) could do with a check-up from the neck up, give us a call.
We’ve helped organisations ranging from major multi-national household names down to small professional services firms improve the lifetime value of their customers – protecting the investment they made to acquire them.
Call us on (02) 9499-7978 for a confidential discussion.