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Service is the key to survival in today’s climate

December 12, 2008 Articles, Customer Service No Comments

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It’s been said that your first time customer, even your first time visitor (say to your website) is always the highest cost to you.  But it’s the repeat customers and visitors that really provide the best returns.

I had an email from a colleague recently telling me about his latest service experience.

*I was so annoyed that the XYZ coffee shop in the ABC Centre took sooooo long to give me a second coffee one morning, even though I was close to the machine and kept looking expectantly, I decided to ‘punish’ them by going elsewhere for a year.

 


At an average of three coffees a day @ $3.20 each = $9.60 a day for about 220 working days a year, that could cost them $2,112 a year.  (That’s why my new office now has a cappuccino machine!!)  Given that I was traveling a fair bit, I figured their poor service cost them at least $800 to $900 for the year that I gave them a miss.”

Do you know how much business each individual customer brings you?  More importantly, do your front line staff know?  I wonder what impact it would have on the staff at this coffee shop if they knew that every regular customer had the potential to bring them at least $2,000 gross revenue each year.  Do the staff know how many “regular” customers they have per day?  And, what does it take to turn a “drop in” or “first timer” into a regular customer?

How would the staff respond to customers if every time someone came in they had at front of mind “this customer is paying $3.20, but they could be worth $2,000 to our business”.

It’s been said that your first time customer, even your first time visitor (say to your website) is always the highest cost to you.  You’ve had to spend your hard earned advertising dollars to get them there.  But it’s the repeat customers and visitors that really provide the best returns.  If they keep coming back to check out your site, your products, your services, or your information, you’ve clearly developed a relationship with them. You have established credibility and trust.  Once you’ve done this, the chance that these repeat visitors will buy from you increases exponentially.

Whenever you have a business totally dependent on new clients, you’re vulnerable.  When economic conditions change (as they have at the moment), or a new competitor enters the market, you may suddenly see your customers disappear.

However, if you’ve managed to build up a stable of loyal, repeat clients, even if they reduce their purchases in a weak economy, you’re better able to maintain at least a basic level of income and keep your business alive.

Many of us know we need to become less dependent on “one-off” customers, but we don’t know how.

Here are some suggestions to help turn first timers into regulars and keep regulars as regulars . . .

  • Work out the potential (in dollars, euros or whatever) each visitor or customer could bring to your business.
  • Run some short training courses (these can just be half-hour sessions) on “How much does a customer mean to us?”
  • Ask your customers (either verbally or in a very short written response, “Why do you do business with us?” “What can we do that would improve our service and products?” “What would you like us to provide for you that we don’t currently provide?”
  • Develop some partnerships (probably informal) with like minded service and product providers whom you can recommend to your customers. Communicate regularly with these “partners” to explore ways of developing business together and to share good “customer stories”.
  • And if you haven’t got (or don’t really need) a sophisticated customer data base, start a simple customer recording system. For example, in a retail business, this can be as simple as a card index with regular customer likes and dislikes, or you can computerize this so that regular customer profiles come up whenever they are served. Above all don’t overcomplicate it – it must have meaning for all staff.

What are people’s main concerns at the moment?  Job security and financial peace of mind.  It’s all about the simple things in life – feeling comfortable and secure with one surroundings – not the bells and whistles.  If your business can help people feel comfortable and relaxed with the service and products you provide, they are most likely to keep doing business with you, even though times are tough.

In today’s tough economic climate, it’s not so much about getting new customers, but keeping the ones you have extremely satisfied, that’s the key to survival, and in fact growing the business.

© The National Learning Institute


About the Author -

Bob Selden is the author of the best-selling “What To Do When You Become The Boss” – a self-help book for new managers – see details at http://www.whenyoubecometheboss.com/. He’s also coached at one of the world’s premier business schools, the Institute for Management Development in Lausanne, Switzerland and regularly advises managers around the globe on their current challenges. Please add your comments to this article or contact Bob via http://www.nationallearning.com.au/contact if you would like some free advice on your current management challenge.

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