I remember not long ago when every restaurant in town was busy. No matter where we went on a weekend it was almost guaranteed we’d have to wait in line. Other businesses were just as busy. Companies and their people seemed to focus more on getting people in and getting them out than on providing any specific experience. During these economic boom times, for many companies, customer service went right out the window. It was low on their list of priorities.
The high demand relative to the available supply made customer loyalty appear to be very high for many businesses. But appearances can be deceiving and dangerous. Now, as our economy tightens, many of these same businesses are begging for customers. Many will blame the economy. And some will not make it. But the smart ones, those who survive and even thrive, will bring back service. They will make customer service a priority. And the really smart ones will make sure it stays a priority.
They understand, nothing creates repeat business better than taking good care of your customers.
Intuitively we know this. And experts tell us this. For example, Arthur Middleton Hughes writes about a study done in manufacturing company. They picked two similar groups of customers. One group received an extra level of service: calls about their needs, more follow-up, educational offerings, product comparison information, product samples, etc. The other group got the usual level of service. Nothing extra.
They found providing better service resulted in customers increasing orders by 28%. The customer who received the usual service actually decreased volume by 29% in the same period. That’s a 57% difference! In this case it resulted in $2.6 million in more revenue for an additional service cost of $50,000.
Even though I’m a “glass half-full” kind of guy, I’ll admit, the thundering chorus of pessimism about our economy is growing. It’s hard to ignore. And though I believe good times are just around the corner, it’s not a bad idea to do things now that will improve customer loyalty and increase repeat business. This is one of the most effective ways to counter the effects of a slowing economy.
So here are two ways you can begin improving customer loyalty and retention in your organization.
The first is tactical. make sure your employees are treating your customers very well. Teach, train, coach, cajole, whatever it takes to help your employees do their best when they work with customers. Much of this is basic customer service:
- Thank your customer
- Answer the phone quickly
- Follow up and follow through
- Be a problem solver
- Focus on helping the customer get what they want
- And on…
Here are two free resources to help you do this:
The Amazing Customer Service Toolkit
200 Best Customer Service Quotes
The second way to improve customer loyalty is strategic. You need to build your organization around serving customers well. This means you know what your customers want (within the context of your business) and you’re willing and able to deliver it to them better than anyone else.
There are six steps to building this capacity:
1. Ask your customers what they want.
2. Tell your customers what to expect.
3. Create easy ways for your customers to offer feedback.
4. Listen to what your customers say.
5. Act on what your customers tell you.
For more details on each step, read this article.
In many ways, a recession is a state of mind. If you believe it will crush your organization and you have no control over that outcome then you’re doomed. But if you believe, like I do, that your fate, and the fate of your organization, is in your hands, then you can take action to survive whatever external conditions you face. That’s what successful people have always done.