Retaining
existing customers is far easier, and much less costly,
than looking for new customers, yet so many businesses
have it ingrained in their thinking that they have to
be focused on finding new customers
as the driver of their business growth. Consequently,
the business can become obsessed with appealing to potential
customers who they have never dealt with before. But
what about their existing customers? Is it just assumed
that once a person becomes a customer they will remain
a customer?
How do you ensure that customers you already have continue
to make repeat purchases? How do you get your existing
customers to buy more from you? It's about making sure
your existing customer base remains happy, loyal and
content with your business. And in particular, it is
about ensuring that you focus on looking after the 20
percent of your customer base that will account for
80 percent of your sales - this is Pareto's 80/20 principle
that applies to much of business.
Examples of the principle: 80 percent of your stock
will come from 20 percent of your suppliers, 80 percent
of your sales will be generated by 20 percent of your
sales staff, 20 percent of your staff will cause 80
percent of your problems, and another 20 percent of
your staff will provide 80 percent of your production.
After you have closed prospects who now become part
of your customer base, the goal is to give those customers
an unexpected positive experience that keeps you and
your product or service at the top of their mind. Your
goal should be to have a frequent interaction with customers,
so when the time arrives for them to buy your product
again, they will think about you and your business first.
By doing this you start to add value to your customer
that your competitors aren't doing. This value is often
what sets you apart and stops your competitors moving
in on your key customers. Remember, it is always easier
for your competitors to steal your market share rather
than try to find a new customer who has never purchased
that type of product before.
A number of market surveys in retail categories have
shown that customers leave their relationship with the
retailer because of:
- 1 percent: death
- 3 percent: change residence
- 5 percent: buy from a "friend"
- 9 percent: product/service is sold by a competitor
- 14 percent: don't need the product anymore/retailer
doesn't have product at the "right" price
- 68 percent: perceived indifference
Providing good customer service is building a relationship,
and relationships require communication. Good customer
service is proactive, so don't wait until there is a
problem to start taking care of your customers. And
take positive steps to prevent perceived indifference
from developing.
Specific actions that you can take to provide a competitive
advantage with great customer service:
Always provide consistency of service, make it easy
to buy, and add a WOW factor. This means making sure
you know what standards you are setting, what makes
people talk about you, what makes people look forward
to doing business with you, what makes people tell others
about your business.
Send personalised "thank you" notes as one
of the most powerful ways to create a point of difference
by saying "thank you for your business." Less
than 2 percent ever say thank you in a written format.
Think about your last five major purchases; did you
get a written note to say thank you for making that
purchase? A written note will set you apart and your
customers will not only look forward to coming back
but they will also rave about your service.
The customer is always right, except when the customer
is wrong. So many people think that they have to succumb
to a customer's every whim as they are frightened to
upset the relationship. This is not necessarily true.
Customers are people and if you give people the opportunity
to be fair minded, they generally will be. You must
always "level" with the customer and if you
are unable to provide the product or service under the
terms being demanded by the customer, provide them with
the honest answer and tell them the best terms you can
offer that will be fair to both parties. It is the same
when a customer complains; don't try to cover it up
or get down on your knees. Give customers the benefit
of the doubt and give them the chance to be reasonable.
If you made a mistake, acknowledge the mistake and ask
what you can do to make the customer feel better. You
will save 95 percent of unhappy customers just by taking
that action. If customers complain with unjust cause,
you need to be straight with them. Don't just give in
under these circumstances or they will expect that from
you every time. For example, you could say, "My
customers are happy to pay that because they feel I
provide value. Is there some way in which you feel I
can do a better job for you?" This opens up the
opportunity for a mutual discussion in a fair way to
retain long-term respect from the customer through honesty.
Provide opportunities for special treatment of your
customers, particularly your "A" customers,
the top 20 percent. For example, if you are about to
launch a new product or update some of your product
range, and then let these special customers know in
advance rather than find out through public media advertising.
It is a way to continue to educate your customers about
the benefit of your products and you may also provide
an offer to purchase or try the product before it is
released to the public. Another opportunity is to contact
your customers at times relating to the history of the
product or service. It could be that you contact them
about 12 months after their purchase to give them an
update on your business or simply to check that everything
is going well with the product they purchased.
You may want to let customers know that the product
is just about to come off warranty and offer to check
the product for them. At this point of contact it may
be an opportunity to offer some type of special up selling
offer for an extended warranty or maintenance agreement
- an added value in your customer servicing.
Deliver your product with an unexpected gift or do something
that is completely unexpected by the customer. This
is the most fun and can be the most effective in customer
service. Give people the unexpected and they will be
pleasantly surprised. It doesn't need to be elaborate
- it is the unexpected that will create the positive
relationship benefit.
A great book to read about the impact of customer service
is "What Clients Love - A Field Guide to Growing
Your Business" by Harry Beckwith. It is a book
about taking customer servicing to another level and
it provides great insight into what customers experience
and expect, and what to do about it. It also indicates
that you need to keep innovating as customers will always
expect you to get better.
Make sure you identify your "moments of truth"
in customer service. What are the times when it really
counts to impress with your customer service? Every
time you meet or have contact!
Did you find this article useful? If so why not see how Andy can help your sales team
by contacting us for a free telephone consultation?
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