Research shows that it costs a business typically 6 or 7 times more to get a new customer than it does to keep an existing customer. After all, advertising and direct mail are rarely free – and neither is employing a sales force.
Why customers don’t come back
Research shows that for the average UK business, about 1 in 5 customers don’t come back. This average 20% customer defection rate may not be the norm in your business or your industry – but every business we’ve ever met has lost customers at some time. And yours is probably no different.
There’s another major piece of research that I want to share with you – one that looked at WHY those customers leave. And it found:
- 4% die or move out of your geographical reach
- 5% are referred to another supplier
- 9% move to a cheaper supplier
- 14% are unhappy with your product or service
None of these reasons are surprising. Or are they? Ask most businesses why they lose customers and they’ll say “price”. They think customers go to someone cheaper down the road. Not so. You can see that only 9% shift due to price. In fact, far more (14%) leave because your service or products aren’t good enough, and that’s something you can usually fix quite simply.
But the amazing thing is that all of those reasons combined – including cheaper prices – only account for one third of all the customers that leave.
It’s not all about price
The other two thirds leave suppliers for one crucial reason. And that crucial reason is “perceived indifference”. And not their indifference – yours! In other words, 7 out of every 10 customers who leave, leave because they feel you don’t care about them, they feel that they are being taken for granted and they feel that they aren’t important to you.
And if that surprises you, imagine this scene. Imagine going out for an evening and having a drink at two pubs that are next door to each other. Both serve the same beer at the same prices, both are furnished to the same standard, and both have the same type of ambience and clientele.
In Pub A you are welcomed by the bar staff with a smile, eye contact, and fast and attentive service. In Pub B the bar-staff seem more interested in talking to each other than serving you. They avoid eye contact with you until they have finished telling each other a joke. And when they finally get round to sauntering over to you, they don’t look at you, don’t use the common courtesies, speak in gruff monosyllables, and make it obvious that they would rather be somewhere else. Now, you’ve finished your one drink in each pub, you go for a meal. And after the meal you have time for one more drink in one of the two pubs.
Which one are you going to go back to? In other words, which pub are you going to be loyal to?
Most people prefer to feel wanted, valued and appreciated – and most people don’t like to feel unimportant. Very few people will choose to go back to Pub B – the one where they are made to feel unwanted. However, because Pub A made them feel wanted, welcome and important, they get the loyalty – and that’s where you return to buy your last drink.
So – your job is to show that you care.
I’m sure your business isn’t rude to its customers in the way the second pub was. But it’s not only rudeness that makes customers feel you don’t care about them.
It might be, for example:
- That you haven’t been in touch with them for a while,
- or that there’s no answer on your phone,
- or that their calls aren’t returned quickly.
- It may be that you keep them waiting too long,
- or seem to be breaking your promises to them.
- It may be that they get the impression they are being fobbed off,
- or that they are being served by your most junior people because they aren’t important enough to be looked after by anybody else.
- Or that you turn up late to meetings with them – and haven’t prepared for the meeting in advance.
There are 101 ways that they could get the impression that you don’t care.
So, your job is to do everything possible to show that you do care; to do everything possible to give them sensational service; and to do everything possible to make the whole experience of dealing with you better than they can get anywhere else.
And to do that, you need great “keeping customers for longer” systems:
- Systems for showing that you care
- Systems for delivering sensational service
- And systems for transforming the experience of dealing with you.
You need simple strategies to show you care.
There are dozens of strategies you can use in this area. For example:
- Identify the little things that annoy customers… and then stop doing them! If you don’t, they may well stop being your customers before long.
- Identify the little things that customers love… and start doing them systematically. It’s the little things that can be the most powerful, so start giving sensational service by systematically delivering many, many little extra service touches.
- Use customer surveys to find out what your customers like and don’t like. Online survey tools such as Survey Monkey are a quick and easy way of doing this… and it demonstrates to your customers that you care.
- Do what you said you were going to do, when you said you were going to do it, and at the price you said you would do it for.
- Under-promise and over-deliver. Customers are always impressed if you give them more than they expected or deliver quicker than expected. Conversely, they are always bitterly disappointed if you break your promises.
- Make sure that every member of your team has the right attitude when dealing with customers at every point of contact. It isn’t just what you do, but also the way you do it.
And there are strategies for:
- Making sure that every point of contact with your business is distinctive, memorable and valuable – with the aim of dazzling and delighting the customer.
- Handling complaints brilliantly – when things go wrong, make sure your systems handle complaints brilliantly. Research shows that customers who have their complaints handled quickly, honestly and fully are even more loyal than customers who have nothing to complain about!
- Adding the “personal touch” by making your key people more visible, approachable and accountable – especially to customers with complaints.
- Continually educating your customers about the benefits to them of dealing with you – the more they learn this, the more likely they are to stay with you.
- And reducing your “no-show” rate by creating systems and scripts for gently reminding customers about meetings and appointments.
These are just a few of the possibilities you could explore, but it’s important to create systems that work for your business and more importantly – your clients.