Thursday, August 4, 2011

“Oh Well, Can’t Make Everyone Happy” The Hidden Costs of Losing a Customer

“Can’t please everyone”, or “Can’t make everyone happy”, have you ever heard or made this type of comment after a customer is lost? Why is it we can’t admit we might have been the problem? Because it is human nature to admit when we are wrong, it is humbling when we have to eat a little crow and admit we didn’t do everything we could have for the customer.
But what is the true cost of losing a customer? A great deal more than getting a new customer to replace them that is for sure. It keeps costing us down the road.
When we lose a customer we lose the best and cheapest advertising we could ever hope to have, testimonials from a trusted customer is our greatest sales person! Not only do they go farther to promote our services than anything we can offer but they act like our personal customer service manager with the new customer. If the new customer is pleased they tell our current customer and we get the feedback. Because we have taken the time to make that current customer a valued trusted client they are excited for us to get the “sale”.  But forget to value that customer, to treat that client as the only client that matters and soon they are someone else’s client.  And that is not where the damage begins it is where the damage continues to compound.
The damage began when you didn’t value your customer. You maybe still the topic of conversation just not the topic you want to be associated with to promote your service. Imagine if you go to two restaurants one is perfect, service as to be expected, food delivered to you correctly and politely and the taste is out of this world. Now you go to the second restaurant and you are treated rudely, your food was cold, wrong, and/or terrible, etc. how many people do you tell? You don’t tell anybody, you tell EVERYBODY! And you will tell more people about the bad restaurant than you will about the first restaurant! Our customers are our restaurant patrons.
Bad service keeps coming back to haunt us long after the lost of a customer. Just like us, our customers have long memories when it comes to poor service. This is where the communication comes in from last week. If you have established good communication with your customer your will know about any issues long before they become a major problem. The bad service spreads like wild fire and you have no way of finding out how far the fire has spread out sometimes until it is too late. Possible customers you haven’t even contacted yet may have already heard about you before you step foot in their door.
What about the cost it takes to repair the damage done to your reputation? Remember when you were a little kid and you did something wrong and your Mom and Dad told you how disappointed in you they were? You apologized and racked your brain trying to figure out how you could regain their trust/approval. That is how we should feel about our customer’s feelings toward us. If something does happen that damages our reputation we need to in front of our customer bending over backwards to regain the trust that was lost. It will not be repaired in one trip it only will be repaired over time and just when we think it has been repaired we need to keep pushing to make it forgotten before we are reminded of this again.
If we can’t repair the damage and we do lose the customer the effects are like the ripples in a pond when you throw a stone in the pond. We may have already gotten a new customer and replace the lost revenue but have we really replaced it? The world is really a small place and before you know it you will be explaining to another client what happened with the lost client, or you will be explaining it to your competition at a networking event, trade association meeting, etc. That is the worst possible situation you can be in as well, because now your competitor has knowledge of a weakness that can be used against you with your other customers. Remember if we are not taking care of our customers, our competition will be.
Our only defense is good customer service, which starts with good communication. Don’t promise things you can’t deliver, deal with complaints personally, listen to your customers, be helpful, even if that isn’t what your there for, your customer will remember when you help them out.
Good customer service pays for itself over and over.

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