Saving Money and Losing Customers

Unhappy customers take their business to your competitors. Your customers and clients want you consistently to meet or exceed their expectations of doing business with you. They don’t really care how you do it. Studies show that it costs five to ten times more to get a new customer than it costs to keep an existing one.  It is much more profitable to continue to please existing customers or clients than acquire new ones. The root causes for poor service resulting in unhappy customers: •    misplaced priorities within a tight budget •    challenge of relating an investment to improved customer service •    effort required to find, hire and train good employees •    not knowing why customers leave or stay When money is in short supply, the natural tendency is to scale back and cut costs. Outsourcing has become the norm for many companies.  Jeffrey Pfeffer says in Business 2.0 Magazine (March 1, 2006), “If outside contractors cut costs, it might be because they’re more efficient.  But it’s far more likely that the savings occur because contractors pay their people less, spend less on training or both.” Cutting costs by outsourcing may be straining out a gnat and swallowing a camel.   The competitive edge that keeps customers coming back is not price but the perceived value of what customers think they’ll get for their money.  Pfeffer says “…competing solely on price is a fool’s game.” Elements of Excellent Customer Service •    Hire the right people. Even if it takes longer to find them and you have to pay them more, hire good people. •    Buy equipment or technology that supports excellent customer experience.  Know how technology or equipment will improve the customer experience in advance. •     Design procedures so you do the job right the first time. Remember the adage, “If you don’t have time to do it right the first time, will you have time to do it over?” Focus on these Actions to Give Excellent Customer Service: 1.    Remember that the culture of excellence starts at the top 2.    Provide training so your employees know how to do it right 3.    Over deliver and give your customers more than they expect 4.    Stand by your work 5.    Treat your employees as well as you treat your customers 6.    Find unique ways to serve your customers Where to spend your money is a pivotal choice in providing excellent customer service.  Know the return on your customer service investment so you make good choices.  Regardless of the size of your business, saving money in the short run could be costing you valuable customers or clients in the long term.