7 Laws of Customer Retention | Extraordinary Business
Recently, my wife and I took our children out to pick up some items from the store, then out to eat. I’d mentioned to my wife that I didn’t have a lot of time since I needed to put some time into a project I am working on. She agreed that we would not make an all night adventure of it.
One of the things we had to pick up was a coat for my son. We went to a couple of different stores, didn’t find one and decided that we would continue looking on another day, being aware of the time and my tight schedule. Then we had dinner at the restaurant as planned and headed for home – already running a little later than planned.
En route to the house, we passed a Wal-Mart, to which my wife said, “Oh, wow. That’s just a Super Center. They probably don’t have any more coats.” It is January and retailers are blowing out old inventory and so I agreed. However, after driving past the store, I sense that all is not right in the world, so I ask if she had wanted to go to Wal-Mart, to which she sullenly responded, “No!” Of course, “No” actually meant “yes.”
Exasperated, I asked her, “Do you expect me to read your mind?” She turned to me, looked me in the eye and said, “Yes. Yes I do.”
While our customers and clients typically won’t say it, they expect us, as providers to read their minds. They expect us to get to know them to the extent that we can anticipate their wants, needs and desires, and fulfill them, or find someone that can. Think about it: if you are at a restaurant that has table service, you expect the server to provide you with a certain level of service. If the server exceeds your expectations, you are quite pleased. If the server doesn’t meet them, you are disappointed. However, there is never an exchange of expectations during your interaction with that server.
There are seven rules that you, as a business leader, need to be aware of in order to get and keep clients. For the most part, your customers won’t ask for them. But they probably won’t hang around if you don’t provide them.
- Know Your Customers: If you recall from the book, “How to Win Friends and Influence People,” by Stephen Covey, he talks about the idea that customers aren’t really interested in us or what we have to sell or offer, but rather, how we will solve some problem or need that they have. Furthermore, Covey goes on to describe how the customers that do business with us are those who we express a personal interest in.
- Anticipate Their Needs: Another factoid that we have learned over time is that it costs a lot more to find new customers than to keep old ones. The customers that we have should be included in the marketing activities that we plan for over the course of the year. This goes beyond sending gifts and doing what is expected, but actually marketing to them: making them aware of some product or service you have that will meet their present and future needs. This means that as a company, you must continue to innovate – think ahead, watch the trends and understand what your customers’ needs WILL be.
- Market to Them: In, “Managing the Professional Service Firm,” the author talks about the idea of dividing marketing efforts into several areas. We tend to break it down into three – 20% of marketing goes to people who probably haven’t heard of us, 35% goes to people and companies that have heard of us, but haven’t done business with us, and the remaining 45% goes to our current clients. This, we find, is the most efficient way of marketing, since prospects will generally move through a lifecycle that follows AIDA – Awareness, Interest, Desire and Action; our business development model follows this.
- Customer Service: Consistent customer Service is one area that can be a point of differentiation between companies. If you think about the difference between shops you may have frequented. Given two that are identical, with identical offerings and prices, which would you frequent? The one with service that meets your needs and expectations. This means that not every customer wants to be coddled, nor will they be willing to pay extra for it. Customers that do prefer to have a shopping experience may be willing to pay extra for the service. The important thing is ensuring that the experience is consistent.
- Manage Change: Managing change is an area where many companies miss the mark. For example, NetFlix recently decided to double their subscriber pricing in order to separate their digital download service from the DVD program. They felt that simply telling subscribers one day that the rates were going to be doubled and they had the option to opt out would be the easiest way to handle this. The backlash from the marketplace was severe, eventually leading to the CEO, Reed Hastins, issuing and winning a spot in New York Times’ “Worst CEO’s of 2011” article. Could this be handled differently or better? YES!! Absolutely, yes.
- Manage Customer Concerns: My wife and I were out several weeks ago. Unfortunately, there was a problem with her sandwich so she proceeded to tell the waitress about it. Instead of listening to my wife, the waitress began defending the cook who prepared it, the procedures that were followed and essentially made it appear that my wife was being insensitive. My wife only wanted to be heard and a simple solution. Many times, that is all that our customers want: a) to be heard and b) to have the problem rectified without a bunch of drama. The alternative is to show them how they were wrong, how you operated within your expectations, how you were right and lose them as a customer for life.
- Have Courageous Conversations: Courageous Conversations are those that no one wants to have or looks forward. It’s kind of like have “the talk” with your teenagers. One of the most courageous conversations you can have with a customer is one wherein you actually apologize for being wrong. Trust me: your ability to go to a customer and tell them that something is not going to be as promised may be a blow to ego, but could be the difference between maintaining a relationship with a client and working through the issue and being publicly sued and humiliated, should the issue come to light. Furthermore, even if the issue is not immediately noticed by your customer or client, when they do find it, they will most likely see it as a HUGE breach in trust. That type of press can do no good for your company.
Your business, my business, every business is dependent on customers. In an increasingly competitive environment, it is essential that you put time and energy into these activities, and have them exist as part of the fabric of your company. One more step I highly recommend that goes hand in hand with many of the activities I have described is to map out your value chain. Your value chain is how you provide value for your customer at each step of the sales, engagement and post engagement process. This starts with how you handle phone calls, how quickly and how you respond to emails and what your interactions will be like. One wa y to do this is to ma p out each step a customer would interact with your company and write down what that interaction should look like and how you provide value for that customer.
Aepiphanni Business Consulting: The Business Strategy People is an Atlanta, Georgia based Operations Management and Business Strategy Consulting Firm dedicated to serving the needs of small to medium sized business leaders. We help business leaders DESIGN| CREATE | BUILD extraordinary businesses. We support our clients with financial management, product and service production and delivery, outsourced services management, sales & marketing and business growth. We provide them with a number of flexible solutions to help them reach their goals.
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