Advertising may win new customers, but quality service will keep them. And most businesses get between 60 and 70 percent of their income from existing customers. Customers tend to buy more the longer they have been with you, yet it becomes cheaper to deal with them. The cost of winning a new customer may be five times what it costs you to manage your relationship with an existing one.
So keeping customers is essential. But that is easier said than done. Research indicates that it may take 12 good service experiences to make up for one bad experience. That is, assuming that the customer stays around for another 12 transactions. If customers are seriously disappointed, most will simply take their business elsewhere, without telling you.
Part of providing quality service is actively seeking customer feedback and building on the relationship. One way to do this is to institute customer loyalty programs. You can use strategies such as discounts, rebates and giveaways to reward loyal customers.
A loyalty program will not only strengthen the relationship you have with your customers, it will also enable you to keep in touch with them regularly – for example by sending out newsletters or notifications of special offers.
It will help you build a database on your loyal customers. Frequent customer contacts will allow you to gather and record details. If a particular customer ever rings up with a complaint, your team members should immediately be able to access a history of that customer, with their likes and dislikes, their value to your business and any important things to bear in mind while dealing with them.
Of course, be conscious of privacy legislation when you collect personal information, and the fact that customers may find information gathering intrusive. They may be entitled to request information you hold on them, depending on your jurisdiction.
Another way to make sure that you are providing good service is to get regular customer feedback. This may head off customer defections and will minimize bad word-of-mouth, as dissatisfied customers typically complain to friends and associates.
You can monitor customer satisfaction through a customer satisfaction survey. It might be appropriate for you to hand it to first-time customers, and you can mail it to existing customers.
Keep the survey simple, avoiding lengthy or detailed questions and limiting the total length to a page. You do not want to take up any more of your customers’ time than necessary. Just target a few key areas and ask your customers how they rate your performance (perhaps on a scale of one to five or from ‘needs improvement’ to ‘outstanding).
The survey will help you identify areas for improvement and will send a message to your customers that you care about service quality.
You may want to keep the survey anonymous. This will encourage respondents to be frank. But if you have survey participants give their name, you will be able to directly respond to them, giving examples of how you have responded to their concerns.
If you have an anonymous survey, you could use a company newsletter to let clients know how you have responded to comments and are upgrading service. However, you want to put a positive slant on such announcements. You want to tell people where you are improving already good service, rather than publicize service shortcomings.
You can also gain a lot of service information from your team members. Naturally, a business will benefit from thorough training of and the provision of clear customer service guidelines to your team members. You need to make your standards clear.
Your team members can also have useful ideas on service quality and can often suggest innovations. They should understand the importance of passing on information they pick up during client contacts. If they learn that a particular client has specific needs, they should pass it on to you or other parts of your business. Then it can go into your database.
Copyright 2003, RAN ONE Inc. All rights reserved. Reprinted with permission from www.ranone.com