I’m sorry if that sounds quite a mercenary question, but it’s meant with the best intentions. Not only for you and your business, but also, and as importantly, for your customers.
The cost of getting new customers
In business, we spend a lot of effort and money trying to get new customers, sales people are rewarded for bringing new customers into the business and probably the largest proportion of our marketing spend goes on trying to acquire new business rather than keeping the customers we’ve got, let alone thinking about how to grow our business with these customers.
We’ve seen all the great introductory offers banks give. To new customers. How annoying is that? When we’ve been loyal to them, it feels like they think they’ve done their job getting us on board, complacency sets in and they’re off to find new shiny things.
But if we look at the statistics, maybe we should start taking a bit more notice of our customers.
It costs six to seven times as much to gain a new customer than it does to keep one.
And 68% of people will leave a supplier based on the treatment they receive compared with ‘only’ 14% who will leave due to dissatisfaction with the product or service. How we treat our customers is nearly five times more important to them than the actual thing they came to us to buy in the first place.
Many a (un)happy hour can be spent regaling our friends with the horror stories of our customer care nightmares. Over the years I have sent quite a few rather more than scathing letters to CEOs of various organisations in utter frustration with the, what feels like, obstructive inaction of their staff. Who I assume are mostly bound by process and procedure resulting in the ‘computer says no’ response.
A classic this week ‘But Ms Espley, I don’t want to go the refund route because the process for refunding your item (a Sony Vaio laptop. Oh, I’ve finally gone public on them!) is very long winded, time consuming and complex’. Only because they make it so. This is after nine months of having a malfunctioning laptop that has had more factory resets than I’ve had hot breakfasts, a cursor that jumps erratically, and a range of other ‘features’ that renders it useless as a laptop. It’s been back to them once and returned in a worse state than when I sent it to them. And they still didn’t want to give me a refund. As I tried to explain to the brick wall that was the customer relations manager (who called in response to one of my aforementioned scathing missives to the CEO), that if they’d just given me a refund, or a new laptop months ago when the issues arose, I’d be singing their praises from the rafters. As it is, a) I shall never use Sony again and b) you now all know about it! *
The downside of poor customer service
And that is the other downside of poor customer service; we tell others and in this world of rampant social media, it’s a dangerous thing indeed to upset too many of your customers.
The plus side of this, is that if you keep your customers happy, then not only will they buy more from you, but they tell their friends too. And that suddenly wonderful social media plays a big part in that.
- The statistics vary, but around 80% of people will read reviews which will affect their likelihood of using a particular supplier. And it’s an inverse rule – you can read ten great reviews and then read one poor one, and you will seriously consider not using that supplier, unless that 11th review was obviously written by a fruit loop with a bee in his bonnet. When I was on my midlife crisis walkabout in 2013, I religiously used Trip Advisor to help me work out which the best campsites were and what tourist attractions I should spend my precious money on.
I have digressed somewhat from the original purpose of the article, but I’m back on target now and which brings me back to my original question.
If it costs six times as much to acquire a new customer, why on earth are we not spending a lot more money on keeping and delighting our existing customers? Particularly in the world of B2B where hopefully there is the potential for recurring revenue.
Be nice to your existing customers
At The Chameleon Guide, we are big on looking at existing customers. It can make a massive difference to your business. One of our clients, the owner of a training company, went to talk to his top ten customers – not to ask for more business, but to ask them about their business and what their plans were. As a consequence of those conversations his customers realised he had a much larger range of training courses than they had thought and which business they had been giving to his competitors. They liked him and what his company did and gave him the additional work resulting in him doubling his revenue. And that was just from his top ten customers.
As Dale Carnegie so succinctly put it ‘the only way on earth to influence the other fellow is to talk about what he wants and then show him how to get it.’ Get your customers to do the talking.
How to engage your customers
There are a number of things you can do to make your customers feel loved.
- Talk to your customers as part of an annual review process/account management
- Getting customer feedback
- Have an on-going dialogue with them
- Loyalty schemes
As this blog is in danger of becoming a book, I’m going to cover the first one here and then write more on the other three areas in my next blog.
Talking to your customers
‘Spend a lot of time talking to customers face to face. You’d be amazed how many companies don’t listen to their customers’ ~Ross Perot
This is really aimed at the B2B market, though there may be some useful tips for those selling to consumers, particularly if what you sell is a high cost item, or it is a recurring sale e.g. printer cartridges and there is the opportunity to expand your product range with them.
How often do you talk to your customers? Or once you’ve got a customer, do you too forget them in your hunt to get new customers?
How many businesses know in-depth what their customers need and want and who they use to satisfy those requirements?
Do you know who your top ten customers are?
Pareto’s principle states you will get 80% of your business from 20% of your customers. We recommend you look at your top ten customers as a starting point. The ones who generate you the most revenue and/or profit. Focus your attention on them.
Implement a plan for meeting them. Be clear on your objectives when meeting them. Be clear to your customers when you contact them, why you are contacting them. If it’s the first time you’ve done this, you could perhaps let them know that as a key customer, you are instigating an account management programme of regular meetings to ensure they are getting what they need from you.
The sorts of questions you may like to ask are:
- What are their strategic goals and plans for the future?
- What are market conditions like for them at the moment/the foreseeable future?
- What opportunities and challenges do they have?
- Are they using your competitors for anything? And if so what do they supply or deliver that you can’t do (or they perceive you can’t do).
- Is there anything you should be doing differently, or are there products or services they need that they haven’t found a supplier for yet, or that aren’t being delivered to their requirements?
If you identify any opportunities or challenges that you can support them with, summarise what you’ve identified and ask if you can share with them ways in which you may be able to help. Or if your competitors are supplying services that you too could provide (that maybe the customer doesn’t know you do), then you will hopefully be able to share that with them. Or it may be that you have some information or other contacts that will be beneficial to your customer. This may not immediately impact on your business, but it’s all part of supporting your customer to be as successful as possible.
The benefits of talking to your customers are:
– Your customer will feel loved – who doesn’t like to be asked their opinion and it shows you are genuinely interested and want to help.
– You will get some valuable market information, be it about market conditions, new innovations or your competitors
– You are more likely to retain the customer
– You may get more business out of your customer
– They may start referring you to others
– They may be prepared to let you use them as a case study/write you a testimonial
If you offer to supply information or put them in contact with other people, then it’s really important that you do so as soon after the meeting as possible. It’s always a great idea to follow up your meeting with an email thanking them for their time and summarising the meeting along with any other follow up actions.
‘In the world of Internet Customer Service, it’s important to remember your competitor is only one mouse click away.’ ~ Doug Warner
If you have any tips on how to engage with your customers, I’d love to hear from you.
* Re my laptop – I won the battle with the brick wall eventually – a refund should be winging its way to me in the next two weeks…