2.01 – Retaining Your Customers
A huge factor in your business’s long-term success is not only attracting but also satisfying and retaining customers. Whether you’re directly interacting with customers or have employees handling them, providing excellent customer service is crucial. Everyone in your organisation, from the receptionist to the delivery driver, plays a role in customer satisfaction.
This lesson offers helpful advice for providing excellent customer service and strategies for keeping your current customers, whether they’re satisfied or dissatisfied.
Poor customer service can lead to several negative outcomes:
- Competitive Threats: Unhappy customers have plenty of alternatives, and it’s only a matter of time before they switch to your competitors.
- Negative Word-of-Mouth: Dissatisfied customers can spread negative reviews online and through personal interactions, tarnishing your business’s reputation.
- Potential Lawsuits: Disgruntled customers might initiate lawsuits, causing legal expenses and further damage to your profitability and reputation.
Retaining Your Customer Base
As a small business owner, you have a significant impact on customer satisfaction through your products, services, and presentation. This section provides keys to keeping your customers satisfied and how to learn from customer defections to prevent them in the future.
Getting it Right the First Time
Ensuring your product or service meets customer expectations the first time is crucial. Customers are unlikely to return if they receive inferior products or services, especially when better options are available elsewhere. Bad experiences can also lead to negative word-of-mouth, which small businesses often cannot afford.
Continuing to Offer More Value
Offering a high-quality product or service initially is not enough to keep customers coming back. Regularly examine how you can provide even more value by improving products or services while maintaining or lowering costs. Staying competitive requires continuous improvement to meet market demands.
For instance, if you’re a dry cleaner and a new technology allows you to work faster and cheaper, adopting this technology is essential to stay competitive. Failing to do so might lead to losing customers to competitors who offer better value.
Knowing that Company Policy is Meant to be Bent
Flexibility is crucial, especially in small businesses where personalised service can differentiate you from larger companies. Be willing to bend company policies to resolve customer issues. For example, if a customer needs a product urgently but your system is down, find a way to process the order manually.
Taking Lessons from Customer Defections
The cost of acquiring new customers is high, so retaining existing customers is essential. High customer turnover indicates potential problems with your products, services, or customer service. Celebrate successes but also scrutinise failures to make necessary improvements.
Examining the Value of Customer Loyalty
Customer loyalty has a significant impact on your bottom line. Research shows that retaining just 5% more customers can increase profits by more than 25%. Loyal customers not only continue to buy from you but also refer others, helping your business grow.
Tracking Customer Defections
Many businesses fail to learn from customer losses. Make it a priority to track and understand why customers leave. This knowledge can help you make improvements to prevent future defections. For example, poor service at an oil-change business can lead customers to switch to competitors offering better service and lower prices.
Recognising and Practising Customer Service
Customer service involves solving your customers’ problems before, during, and after a sale. Excellent customer service means meeting or exceeding customer expectations at every stage of their interaction with your business.
- Before the Sale: Ensure a positive experience when customers interact with your business, such as a clean and organised store or helpful scheduling for services.
- During the Sale: Continue to satisfy customers throughout the buying process. Poor service during this stage can deter repeat business.
- After the Sale: Provide attentive after-sales service to address any follow-up questions or issues. Solicit feedback to improve future interactions and services.
Showing that You Care – the Old-Fashioned Way
Incorporating personal touches can make a significant impact on customer satisfaction:
- Handwritten Notes: A handwritten thank-you note adds a personal touch.
- Personal Thank Yous: A call from the business owner to thank customers can leave a lasting positive impression.
- Handling Mistakes Honestly: Address mistakes promptly and honestly. Use these opportunities to improve your business and reward customer loyalty.
