Boost your Profits through Customer Retention

How often do we hear of businesses focusing almost entirely on new sales rather than looking after their existing customers?  Are you guilty of it in your business?  When the going gets tough do you cut prices and spend a lot of time and effort on getting new (and less profitable) customers?

You may have come across this oft quoted study, attributed to, variously, The American Society for Quality, the US Chambers of Commerce and a book called “Lessons from the Field”  (Howard Feiertag and John Hogan).

This gives the following reasons for customers leaving:

·         Death or moving away                              4%

·         The influence of friends and relatives      5%

·         Competitor marketing and special offers 9%

·         Dissatisfaction with product or price        14%

·         Perceived indifference of the supplier      68%

Reflect on that – more than 2 out of every 3 lost customers do so because they believe you don’t care!

But is it as simple as that?  A study by RightNow Technologies says…

·         73% of customers leave because of poor customer service but the supplier thinks that only 21% leave because of customer service.

·         The supplier thinks 48% leave because of price when in fact only 25% do so.

In another study Mercer Management Consulting found that for a selection of retail outlets, only 15% to 30% of customers are price sensitive – that is, they might change supplier for a better price.

So retaining customers is not (usually) about price – it’s about letting the customer know you care.

“So if you love your customers can you charge what you like?”

No. You have to be competitive in your market - but superior customer care and marketing mix (USP, positioning and so forth) means you get to keep most of your customers and still charge a premium.

Low prices won’t keep customers if they think you are indifferent to them. Worse, using low prices attracts disloyal customers – remember why they come to you in the first place!

The worst strategy of all is using low prices to make up for the fact that you and your staff really don’t care…

“It’s really difficult and expensive to get all my staff to provide great customer service”

It might seem so to start with – but the rewards are huge…

·         According to a study by the global business consulting firm Baines Consulting, a 5% increase in customer retention can increase a company’s profitability by 75%.

·         Reichheld and Sasser reported that when MBNA America reduced its 10% defection rate to 5% their profits rose by 125%.

The other statistic that you need to reflect on is that it costs anywhere from 3 to 20 times more to gain a new customer than to look after your existing ones… sounds like a bit of a “no-brainer” to me!

One way of looking at it is that you need to do everything you can to move your good clients and customers up the Ladder of Customer Loyalty.  Imagine a ladder with different types of customer on each.  Let’s start sat the bottom…

·         On the bottom step: Suspects - the market place – they probably don’t even know about you… but there are a lot of them!

·         If you make contact with them in some way through your marketing, they become Prospects… but still not customers!

·         One step further and they take the plunge and become Testers – they make a purchase, without any real commitment or expectation.  This is your first chance to capture them for the long term – how good will their customer service experience be?

·         If they like what you give them they will come back – become more comfortable with buying from you – only now can you really call them Customers!

·         If you look after them, they will enjoy using your services or buying your product and that experience turns them into Regulars.

·         But you can go further – a lot further!  At this stage, the customer is still reactive – they buy from you because of the good experience that they’ve had – great product or service, hassle free dealing and caring customer care from you and your team – they become an Advocate of your business.  If asked, they will sing your praises to others.

·         The final step is when your customer is so delighted and satisfied with your service that they go around acting as your unpaid ambassador telling people without prompting how good you are and that they would be mad not to do business with you!  These are the Promoters – they are a real asset to your business and they are your most valuable customers.

Recognise them, nurture them – and make absolutely sure that you understand and care for them at all times.  It may sound a little soft and fluffy, but in doing so your profits will be enhanced significantly – and there’s nothing fluffy about that!

To find out more about how coaching can help deliver Outstanding Customer Service in your business give us a call. +27 74 127 6439 or email nevillesol@icloud.com

Customer is King

Intro bit…

Whether you’re enjoying the summer or putting up with the winter where you are (and if, like me you are in South Africa you could be excused for being confused as to which is which…) – you’ll know that your Customers’ expectations of the service your business delivers are not seasonal!  They want to be WOW-ed every time, all the time – and why shouldn’t they?  They deserve it.

 

This week we’re looking at what makes customer service excellent – what do you need to do to make sure that come the next season, your customers will still be with you… and telling everyone about how good you are!

 

What are you waiting for?  Get reading and good all the best at being the best you can be!

 

TBC

The Customer is King!

 

There has never been a more important time than now to concentrate on your customer service!  Not only do customers have greater choice than ever before – many of your competitors are fighting dirty and winning business on price alone!  So what can you do to stay ahead of the pack?

 

We’ve all got our own “favourite” customer service horror stories that we will tell people whenever we get the chance.  You may have read Joe Girard’s book “How to sell anything to anyone” – in which he propounds his “Law of 250” – that is that everyone knows, on average, 250 people – and they will potentially tell every one of them about their experiences of customer service – especially if they are bad! In other words… “Bad news spreads fast”…

 

My experience is quite recent and relates to my mobile phone – my contract renewal was due and I had the opportunity for a free upgrade of my phone if I renewed with my provider (who I was quite happy with at the time).  I’d spotted a phone that gave me all the features I wanted – good screen size, great web browsing capability, great camera, MP3 player… and it made calls and sent texts too! 

 

It was on the list of phones available to me, so I called my provider and asked about getting one – “no problem, Sir… but we’re out of stock… in fact there are none in the country at the moment and you won’t be able to get one for another 6 weeks… but can we suggest the XYZ… that way you can take advantage of the free upgrade”.  I didn’t want the phone and if I simply left it I’d be committed to my provider even though they could not meet my requirements…

 

Not to be defeated I called around some others to get some quotes – “sorry Sir – no stock anywhere in the country”… “We can do that model, but it will cost you to upgrade”… and then, from one of the better known high street retailers “…so if you’re not placing an order, what did you bother calling on a Sunday for?”  I was not impressed!

 

Undeterred I tried another major provider who I didn’t expect to be any better than the rest of the industry… but I was wrong!  They had the phone in stock… they improved on the tariff that I’d asked about… and they called me back when they said they would!  I was pleasantly surprised and gladly placed my order – which was fulfilled exactly as promised.  Needless to say my previous provider is unlikely to hear from me – ever again!

 

It put me in mind of a quotation by Sam Walton of WalMart…"There is only one boss… The Customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else."

 

So what can YOU do in your business to make sure you look after your valuable customers?  Here are some tips that you really can’t afford to ignore:

 

1. Remember who is the boss.  Give the customer what they actually want, not what you want or what you “think” they want.  Listen to them and act on what you hear.
2. Be a good listener.  Ask questions; take time identifying their needs – DO NOT make assumptions.  What three things are most important to each of your customers?
3. Identify and anticipate needs.  Customers buy solutions to problems… or positive emotional feelings in many cases – be familiar with their needs, their businesses and think ahead to what they might need.  Be prepared!
4. Make them feel important and appreciated.  It may be as simple as learning their name, remembering it and using it.  Thank them often – gratitude is always remembered and appreciated.  They don’t have to use your services or buy your product, after all.
5. Help your customers understand how your business serves them.  Make sure they understand how your sales and service systems work.  How do they return goods, how do they make payment, who should they speak to with particular problems… and so on. 
6. Recognise the power of saying “Yes”.  Look for ways to help your customers.  Make “Yes” your first response – not “NO!”  If you are serious about helping them, you will find a way of meeting their reasonable requests.
7. Be good and sincere at apologising.  You don’t want to be doing it all the time, but whenever it is warranted – be good at it.  Complaints are invaluable – how else will we learn what is not working?  Be good at handling the “grief” …a mistake well resolved can create a powerful customer service experience which will more than overcome the initial negative feelings.
8. Give more than expected.  Under promise and over deliver.  Manage the customer’s expectations so that they don’t expect you to do something that you just can’t deliver.
9. Ask for and act on feedback.  Take regular feedback – and do something with it.  Listen, understand and act.  If you are seen to be interested in the customer’s opinions and experiences… and act on them, they will have a very positive impression of how important they are to you – and people like to feel that.
10. Look after your employees. They deliver your service – their attitude is the perceived attitude of your company (remember the Sunday phone guy!).  Train them well – they need to know how you want to serve your customer.  Engage them in making the customer’s experience better – give them ownership and trust them – it’s their livelihood too.

 

I like the thought put forward by Aristotle…"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

 

How many of these top tips do you already take into account?  When will you do something about the rest?  Customer service is not a random or accidental thing – it must be planned, be a part of the business owner’s agenda and become an integral part of your business’s culture.  If you aren’t sure where to start… give us a call.

 

TikVah Coaching Model

 

The TikVah Coaching Model - G.R.O.W.S

G.R.O.W.S – The TikVah Coaching Model

The TikVah Coaching model is based on the widely used and respected GROW model developed originally by Graham Alexander and brought to the fore by Sir John Whitmore.

Although implicit in the GROW model, the TikVah Coaching interpretation has an important explicit reference to Support through the coaching relationship and helping the client remain accountable for their actions and progress… hence GROWS!

This is informed by research into contemporary and effective coaching methodologies from leading writers and practitioners such as Linda Tobey (Human Resource Development, 1999, F Sofo et al), Adler International Learning and Timothy Gallwey (The Inner Game of Work, 2000, W T Gallwey).

	At a high level the process is:
Goals	Determine the goals or outcomes that the Client wants to achieve through the coaching conversation.
Current Reality	Understand where the Client is now – the start point.  Drill down to gain real understanding.
Options	Explore the possible options and expand the Client’s choices – understanding the implications of each.
Will Do	Establish the Will – to take action and the commitment to do so.
Support	Agree the support needed by the Client – including how they wish to be held accountable.

 

 Coaching In Business – Your Secret Weapon

Something that is taken for granted in the massive business that is international competitive sport is the vital impact that a coach makes on individual and team performance… and your business is really no different!

Coaching in business!  As I said, we've all heard of a coach, in terms of a football team, an athlete, tennis player or swimmer, but for a business owner, that's still a new one!  As business moves through the 21st Century and with continually increasing customer expectations and demands, it is clear that the world is a more challenging place.

What sort of businesses would benefit?  Well, not just business which is struggling – all businesses can benefit from the services of a professional business coach.  Whether it’s a business which is seeking to avoid decline, one which is growing strongly, or a business that is successful but wanting to change its direction or improve how it deals with (and retains) it’s customers, working with a coach can have a huge impact.

I like to think of a business coach as rather like a “virtual” non-executive director… they're not there as consultants, they don't want to run or take your business over – they want to help you get the best returns from your investment.  A business coach or executive coach will work with you, focusing on your strengths, look for areas to improve your skills and knowledge, help you set and plan achievable goals and teach you how to track your progress as you move along your chosen path.  They'll also motivate you and your team to make the very best of your business based on your own values, beliefs and vision.

If you were a professional (or a challenging amateur) sportsman who already had the skills needed to play your sport but wanted to get better at your game, you'd hire a coach, how many golfers have had a lesson from a coach and not found some benefit?  A business coach will do the same thing for you in your business, using their experience and knowledge to help you find solutions that will help you get achieve your full potential. They'll act as advisor and confidant - they'll be your unreasonable friend!  They'll look at your business with an unbiased eye guiding you in everything from time management and performance improvement to team motivation and conflict resolution.

You may be thinking…"but they won't know anything about my business - it's unique!"  Well that's what business owners think - but in reality, you are the expert in your business, your coach is the independent and skilled catalyst to help you get the most from your business.  Going back to the sporting analogy (although a touch topical right now for the wrong reasons!)… Not many people know who Hank Haney is in golf.  You may know he was Tiger Woods' golf coach at the height of his career - he isn't as good at golf as Woods, but he's been a crucial part of his success in his golfing career to date.

As with any business investment, you will be looking for a good return on your investment - your coach will be focused on delivering value - real bottom line improvement.  Coaching has been shown time and time again to be one of the most effective ways of adding value in business. 

Let's not forget the theme of this month’s newsletter… Customer Service Excellence – getting your team to work with your coach can help ensure the consistent delivery of exceptional customer service – with your team being motivated, taking ownership and truly believing in delivering your vision for sector leading service to your customers that always exceeds their expectations.

So… a business coach can be your secret weapon in growing your business and looking after your crucial customer base… helping you to outshine the competition in all respects.  Think about it carefully… All those winning sporting icons can’t be wrong – isn’t it about time that you became champion in your chosen field?

 

 A Business Coach… Your Secret Weapon - Get one soon before the competition beat you to it!!