How to Plug Your Leaky Customer Pool
We knew where the water was going because the area under my deck was muddy all the time. But we didn't know where the leak was. All Wayne could do was run a hose to the pool to constantly replenish the water that disappeared. His water bills were outrageous.
It's almost funny, until you realize that you're in the same situation as Wayne. Your customers are leaking away. Slowly and persistently. You probably don't know where the leak is. And the cost of replenishing your pool of customers is probably more than you want to spend.
At the heart of customer defection is lack of satisfaction. This isn't the same as dissatisfaction, which means an active dislike for something. Lack of satisfaction is simply the absence of any good reason for a customer to stick around. According to U.S. News & World Report, a whopping 91 percent of customers who leave do so simply because they are "not satisfied."
How do you satisfy customers and retain their business? Any number of ways. But since all relationships are based on good communication, that's a commonsense place to start. Specifically, this means asking questions, staying in touch and being generous.
· Ask questions. People rarely tell you when they like something and only occasionally complain when they don't. The only way you'll find out what you're doing right or wrong is to ask your customers. Use a short questionnaire, a comment card in your fulfillment, a phone survey, a feedback form on your Web site or whatever it takes to learn about the good and bad of customers' experiences.
You also can keep the lines of communication open with a dedicated, toll-free customer service phone line and a special e-mail address. Feature this information in your store and catalog; on your Web site; and in invoices, e-mails and all customer communications. And staff your customer service department with well-trained people. When you get complaints, solve problems promptly, give customers something for their trouble and remind them that you care.
Also, since people move, get married and constantly change, you must keep your database fresh. Only when you know the who, what, when, where, why and how of your customers' purchases will you be able to fix problems and improve service.
· Stay in touch. They say absence makes the heart grow fonder. But they're wrong. Familiarity makes the heart grow fonder. A simple, inexpensive newsletter may be all you need to maintain a friendly familiarity with customers. It can include information about new products and services, company policies, helpful articles and anything interesting, relevant and useful. Just make sure it isn't a bunch of thinly veiled ads.
Letters and e-mails are great ways to thank customers for their business and reward them with special offers and inside information. For your top customers, consider a personal phone call just to say thank you.
Of course, a regular stream of offers also works, though you'll lose a little of the bonding effect that results from more personal contacts. However, tailoring your offers to a customer's buying habits can be very effective. Some online companies, such as Amazon.com, do this quite well, combining targeted offers with a personal feel.
· Be generous. People are willing to pay for quality. But don't nickel and dime them to death. A few years ago, I bought a relatively expensive computer. At the conclusion of an otherwise top-notch sales experience, the salesclerk asked whether I would like a mouse pad. I said, "Yes," only to have the clerk say, "OK, that's three bucks." It was a nice mouse pad, but after spending thousands of dollars for a computer, monitor and several accessories, that extra $3 felt like an insult.
Little acts of unexpected generosity can go a long way toward cementing your relationship with customers. Free floor mats with a car, a free light bulb with a lamp, free advice with completed tax returns. Little extras make your customers feel like you're a friend, not just another company out for a buck. (For more information on "generous" marketing, read "Harnessing the Power of Kindness" at www.DirectCreative.com. You'll find it in the Article Archive of the Learning Center.)
Business is more than sales. It's about relationships. If you develop and nurture those relationships through a commonsense communication program, you can reduce customer defections and increase profit.