Providing good customer service is a very inexpensive, yet highly effective way to ensure your business success. From my daily encounters with many businesses, it's quite clear this fact escapes many busines owners.
Here's some of the data: The cost of bringing a new customer in is 8-10 times that of retaining a current customer. This means that dollars you spend on customer service make a larger impact on your bottom line. After all, a customer who has already bought from you has been sold on you once. Keep them coming back for more.
A dissatisfied customer will tell around 12 people of their dissatisfaction. In fact I think this number is higher now that the Internet and blogging have increased people's ability to speak out to a larger crowd. If you tick off one customer you may have lost 12 potential customers.
I do not shop at places that give me lousy service. I remember an incident at one of the larger electronics chains where I wanted to buy something small and couldn't get a single person in the nearly empty store to wait on me. There were about 5 employees standing around in a circle chatting who got annoyed that I interrupted their chat. I even said, "look I would like to give you some of my money, would any of you like to help me give you some of my money?" Still lousy service.
Even though my purchase that day was under $100, I am an electronics junkie. I also purchase computers, software and electronics for my businesses. Since I have never been back to that business after that day I estimate that that location has probably lost $50,000 of business from me. On top of that, I will always recommend a competitor to people who ask and tell people to avoid that chain. So maybe I have cost that business hundreds of thousands of dollars over the years.
So, how would you like to lose a few tens of thousands of dollars in sales in your business? Probably not. If you do not provide excellent customer service you might as well light stacks of hundred dollar bills on fire - because you are losing that much money.
I was working with an upscale clothing boutique on a marketing piece recently. A woman came into the store while I was there and was greeted warmly by the store owner. As opposed to the pushy or snobby salespeople in many of these locations, this boutique owner was welcoming. It turned out that she did not have what this customer was looking for, so she actually recommended a couple of her competitors where the customer could find what she was looking for. So, she didn't make a sale that day, or try to push something the customer didn't want. I would bet dollars to donuts that client will be back again, and again, and again.
When sales people are forced to push things, even after you say no two or three times - it ruins the experince. I hate the electronics stores that push their expensive service policies. When I buy a new gadget I am excited and feel really good, then some salesperson comes along and tries to push something that I don't want - ugh I just want to scream. They turned my good feeling into discomfort and I won't be back. I realize that these electronics chains make huge money on these things because they almost never get used - thus they are pure profit. But they make customers like me jaded for shopping there.
A friend of mine recently bought a $30,000 home entertainment system from an upscale seller. His experience was exceptional, the sales person was consultive - steering him not towards the most profitable items, but towards what would give him the best value. The salesperson found out my friend's favorite music and even mailed him some tickets for a concert after the sale. Will my friend shop there again and spend tens of thousands of more dollars over the years? Absolutely.
I have difficult clients that sometimes I want to strangle - sure. But I know that a part of my job is to make them happy, even if it costs me a few extra bucks or reduces my profit on a transaction or two. I want them to love me and keep coming back for more.
J D Moore - Marketing Comet
Comments