Don’t let profitability
walk out the door with an unhappy customer.
By Alain J Roy
MUCH HAS BEEN SAID OVER THE LAST 20 YEARS about the value
of getting close to customers, listening to their needs,
and meeting their expectations. However, little has been
done to improve the art of employee-customer communication
in even the most basic settings, such as the local grocery
store, restaurants and the consumer retail sector.
Another major management topic has been customer satisfaction. If you fail
to satisfy your customer, the only way to know what went wrong may be to listen
to your competitors’ message and pay attention to the way their employees
communicate with their customers.
Another well-known fact: “Customers cost a bundle to attract and retain.” Few
customers will actually take the time to share their views with the employees
or managers unless they are “extremely” unhappy. Thus, the ill-served
customer will usually leave, wasting an opportunity to improve your customer-employee
interaction processes. The opportunity to communicate and further solidify
a bond with that particular customer has been lost.
Where does this unhappy customer go? Straight to your competitors. He or she
may have only visited your place of business once, but a bad experience will
prevent a return visit. To make matters even worse, the lost customer is now
sharing with his or her friends the story about a former unpleasant experience
and/or a newfound and now “favorite” spot. As this lost customer
becomes “loyal” to one of your competitors, potential profits for
your business go down the drain.
What happened? How can you find out so that you may solve the problem? What
can you do to prevent customer defection?
First, ask yourself: “What does my competitor offer that attracted my
customer?” Remember, you once had that customer. You succeeded in attracting
that customer. You had an edge. What was it? Why were you unable to retain
that customer? What made your customer look to and stay with your competitor?
Many customers are motivated to frequent a specific place of business by an
enticing marketing message and/or a positive word-of-mouth referral. Something
in that marketing message (a promise, an incentive) appeals to their needs
and their expectations. Once there, they expect those promises and incentives
to be fulfilled. Period. Whether it’s fresh food, fast and friendly service,
fair prices, a clean environment, or any number of motivating factors, if they
do not get what they were originally expecting, they may simply leave without
sharing their disappointment with members of the establishment. They may never
return and they may also engage in casual “bashing” of the establishment
with others in their circle, depending on how extreme their level of disappointment
may have been.
A Personal Case Study
Within a three-mile radius of my residence, I have easy access to four grocery
stores (Von’s, Henry’s Market, Albertson’s, Ralph’s).
I spend on average $150-$200 for groceries each week. Over a period of 10 years,
this number adds up to more than $95,000. Nowadays, only one of these four
stores gets my money and I am very happy to give it to them day after day.
Given my line of work, I did on a few occasions convey my needs, expectations
and disappointment (in writing as well as verbally) to the management of the
other three. When they failed to adequately address the issues, I simply gave
my repeat business to Vons. Not only have I become “extremely” loyal
to that grocer, I’ve also communicated my $atisfaction with that establishment
to several of my friend$ and neighbor$. Further, I freely share my views of
the other three as well. Repeat business and word-of-mouth is the key to business
success.
In retrospect, the other grocers could have earned my loyalty and my dollars.
When informed of weak performance on their part, they could have listened to
my valuable customer input in order to prevent a measurable loss. But they
weren’t listening. Instead they turned away, in effect forcing me (and
my friends) into the arms of their competitor.
But that’s not the end of the story. As a repeat customer and a source
of word-of-mouth advertising for the establishment, imagine that I remain a
loyal, happy and satisfied customer for life. First, let’s assess the
10-year lifelong significance of such a customer. Based upon the frequency
and extent of each transaction derived from such a customer, take into account
the word-of-mouth factor, which you can logically multiply by 2. Tally the
new sum by the average number of customers per day that you may lose, and then
factor the average sales amount.
The total should equate to the lifelong desirability and the importance of
communicating with your customers on a regular basis. What is your average
annual profit per “loyal” customer? How long would you like to
retain that customer? What’s the cost of losing an unhappy customer to
your competitor?
The significance is clear: if you look at each customer as an appreciating
asset, you are likely to reconsider your hiring, training and compensation
programs. With this in mind, you are also very likely to invest in support
tools to aid the employee-customer communication process.
When you buy a new cash register, it starts depreciating the day it is acquired.
The “well-served” and “well-listened-to” customer is
an appreciating asset. Every small act on his or her behalf drastically increases
the likelihood of repeat business, positive word-of-mouth referral and measurable
business performance improvement. Add the following to the list of benefits:
simplicity of operation, reduction of employee turnover, increased profits,
etc.
Take one of your front-line employees or “Courtesy Clerks,” as
Vons calls them, and imagine that he/she is “managing” your future
each time this employee comes in contact with a customer. Are you sure you
still want to brag about your company’s low wages? Are you certain that
taking time away from your busy schedule to chat with a customer is too unproductive?
The idea of “listening to the customer” and the importance of repeat
business is not new. Listening to the customer and the competitor is much easier
than most people would like to admit. Here are a few inexpensive and very effective
ways to achieve this:
1) Walk around the store/restaurant and interact with your customers. “Tell
me how we can best serve you, Mrs. Smith.” If you are genuine and listen
attentively, this may be the most efficient and least expensive approach.
2) Display the traditional customer satisfaction/complaint card. Put
it in a prominent location where your customers will be tempted to fill it
out and return it. Inexpensive and still reasonably effective.
3) Implement an automated customer feedback monitoring solution. Customized
to meet your needs, these solutions are extremely effective and affordable,
and easy to implement and monitor. Months ago I discovered Mindshare Technologies’ CONNECT
2.0 (www.mindsharetech.net). Mindshare
Technologies will develop and implement a pilot solution free of charge (for
a limited time) so that you may immediately identify customer satisfaction
issues and trends that did not appear on your radar screen. Access this valuable
data from your desktop and share it with your team. Then, take it a step further—find
out what customers have to say about you and your competitors, and why they
visit your competitors from time to time. And then do something about it!
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Mr. Alain J Roy has worked as an employee-customer relations consultant for
more than 20 years, helping business leaders to solve customer service, personnel
and operations problems. As a leader in the customer service field, Mr. Roy
has developed an effective approach which values the “intangibles” by
showing the true contributing factor between specific frontline personnel investments,
marketing expenditures and bottom-line results. In his upcoming book, The Employee
Accountability Factor, Mr. Roy redefines the all-important concept of face-to-face
employee-customer interaction.
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