Customer Retention in Difficult Economic Times

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Customer Retention in Difficult Economic Times

Written by Bill McCormick

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How Would Your Customers Rate Your Service?

Could you use a few more referrals? "Go the extra mile" when providing service and turn the customers you serve into advocates to help you promote your business. Your referrals and follow on business are in direct proportion to the quality and quantity of service you render on a daily basis.

Customer retention is essential to the long-term success of every organization, but it becomes critically important during difficult economic times. This is the most crucial time to really wow your customers. Truly good customer service is all about building the relationship. From the first impression to the latest interaction, your customers will choose to buy or stop buying from you based on the success or failures of those interactions. So in today’s stressed out, do-more-with-less climate, we all need to offer a customer interaction that exceeds expectations and builds a solid foundation of trust into that important customer relationship.

Three Zones of Customer Satisfaction
It does little good to make a sale if your company or organization cannot service your current customers. Your customer service strategy and culture should consist of action plans to address the three zones of customer satisfaction.

1. The Service Surprise Zone (what we call the Wow Zone) is when you exceed your customer’s expectations. You should strive to wow your customers, especially your key accounts and prospects.
2. The Service Expectations Zone is when you meet your customer’s expectations. At a minimum, your organization needs to identify and then meet the critical needs and expectations of your customers. As such, the ability to ask questions and to listen for the customer’s concerns and issues, are critical skills.
3. The Service Recovery Zone is when you don’t meet your customer’s expectations. This zone is a moment of truth. Handle it well and you can actually strengthen the customer allegiance. But, if this is handled poorly, you run the risk of losing customers.

Customer Service Statistics
Many customer satisfaction surveys, from a wide range of industries, show a common pattern in terms of how customers react to situations depending on whether they are wowed or dissatisfied:

An extremely satisfied customer will typically tell 2 to 5 other people or organizations about their positive experience. In other words, a wowed customer will provide unsolicited referrals of business for you.
An extremely dissatisfied customer will tell 5 to 20 other people or organizations about their negative experience, and encourage prospective customers not to use your company’s products and services. This creates bad word-of-mouth and damages your reputation in the marketplace.
The majority of extremely dissatisfied customers (as many as 90%) will stop doing business with your firm without letting you know that they are leaving. As such, it is a double negative if you don’t respond well to a Service Recovery situation. You likely will lose the customer, and then that same customer will tell other prospective customers not to use your company or products.

Wow your Customers
There are many ways to wow your customers. Here are three suggestions from our Exceptional Customer Service workshop:

Be pro-active about communicating with customers, especially when you become aware that a problem, such as a delayed shipment, may occur. Be sure to call the customer to advise them of the problem and offer some solutions or options.
Follow-up with customers even when there aren’t any problems; for example, call or email a customer that you haven’t spoken with in awhile.
You should strive to be in the Service Surprise Zone whenever possible. We realize that it may not be practical to wow every customer. If you have to be selective about wowing customers, your customer service strategy should focus on wowing these three categories of customers: (1) key accounts, because the loss of a key account can have a severe effect on profits and sales goals; (2) growth accounts because of their longer-term sales potential; and, (3) new accounts, because you want their initial impression of your company to be favorable.

Building Customer Service the Carpenter’s Way
I often conclude the teaching of our Exceptional Customer Service workshop with the following real-life story.

When I was a young boy, I spent many afternoons after school at my grandfather’s carpentry shop. He never had a formal education but was a highly skilled tradesman. His finished work and services, such as handcrafted furniture and home improvement projects, were much in demand. He never advertised but was the beneficiary of word-of-mouth recommendations from satisfied customers.

In retrospect, it was fascinating to see how he interacted with customers. He always thanked customers for their business, both initially when an order was placed and also when the furniture or project was completed. Whenever possible, he gave each customer more than he or she had requested. I recall him building a beautiful bookshelf and using some of the leftover scrap wood to make some bookends for the same customer. Because the wood was of the identical type and grain, the bookends matched perfectly with the bookshelf.

Now that I am older, I spend time advising and teaching clients about many of the things I learned by observing my grandfather’s extraordinary commitment to his customers. To follow my grandfather’s example, ask yourself these three important questions:

1. Are you wowing your customers? Customers who receive a superior product or service will recommend your organization to others, just as my grandfather benefited from word of mouth referrals.
2. Are you treating your customers with respect? It can be as simple as a heartfelt “Thank you for your business.”
3. Are you exceeding your customer’s expectations? It doesn’t necessarily have to cost you a lot to give a customer more than he or she expected, such as my grandfather’s bookends.

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Bill McCormick
		About the author:
		Bill McCormick is the founder and president of Sales Training And Results, Inc. (STAR), (www.salestrainingandresults.com) a firm specializing in customized sales training and consulting. STAR has worked nationally with thousands of employees and managers in a wide range of industries, in both the service and manufacturing sectors. Bill is the author of STAR’s monthly newsletters, sales articles and blog, all of which cover many practical sales skills tips and tools for anyone who comes in contact with the customer, from the customer service representative to the key account manager. .