YOUR BUSINESS AUTHORITY

Springfield, MO

Log in Subscribe

Opinion: Customer retention starts with employees

Smart Ways Series

Posted online

Customer service seems to be getting worse, not better.

Most of the disappointing customer experiences I encounter, or hear about from friends, involve uncaring employees.

I’ve been wondering lately whether inferior service is actually penalized by customers today. Do customers exact revenge in ways like scoring the experience on popular rating sites or by bad-mouthing the experience to friends? Yes, many customers do.

Customers take their dissatisfactions out on restaurants when the food disappoints or the wait-staff underserves, automotive repair mechanics that charge too much and don’t fix the problem, or on cellular companies whose employees put them through the motions robotically. 

What’s important to keep in mind is that customer retention is a crucial revenue driver for business. For example, if you have 10 customers and retain them all, then acquiring three new customers increases sales by 30 percent. Conversely, if you retain only seven customers then you must acquire three new customers just to meet original revenue.

The best companies treat customer retention as highly as they do new customer acquisition. There are several ways I see smart businesses retain customers.

1. Treat employees as No. 1. There is truth in the adage, “Without customers, there is no business.” However, without good employees, there won’t be good customer service and that seriously undermines long-term business viability. The best companies at delivering superior service treat their people excellently because they realize the key to the bottom line is through delivering top-of-the line service.

2. Communicate customer values. Communicating the company’s values is the key. If employees get how their role helps deliver great customer experiences, it elevates their sense of purpose and meaning. When employees lack perceived importance, they don’t bring their best efforts or attitude to work every day. Surveys about service reveal that, nearly 70 percent of the time, customers take their business elsewhere due to employee indifference. Fixing employee apathy reduces customer attrition. 

3. Have a customer retention strategy. It’s a company’s strategy that sets the direction for customer retention. With clear direction, teams can apply the right priority to solving customer problems and even exceed expectations. Creating legendary service and improving brand loyalty requires a clear retention strategy.

4. Provide sufficient employee training. Service without sufficient employee training creates mediocre customer experiences that can compromise future loyalty, even if the customer likes the product. Recently, I placed a to-go order at a restaurant we really like. When I arrived at the drive-thru, there were only two cars ahead of mine, but incredibly, the wait time was 15 minutes. This more than doubled the time I was told to pick up my food.  

When I mentioned this to the drive-thru employee, he shrugged, and said, “We had a lot of call-in orders.” No apology given. When I asked if my food would still be hot, he answered, “Yeah.” Again, no apology was offered, plus the food required a quick zap in the microwave when I got home because it wasn’t sufficiently warm. Although the food was eventually tasty, the employee’s indifference spoiled our overall experience.

An executive with a national restaurant chain once noted that poor service makes great food taste bad. The point applies, of course, to virtually any business. For their loyalty, customers expect both a quality product and excellent service.

5. Hold a grand opening every day. Most businesses deliver their best customer service experiences during a grand opening. Employees are enthusiastic and attentive, and the products and services look fantastic. Every effort is made to deliver a great first impression to customers. Smart companies prioritize their customer’s experience as highly as any other activity. This requires a sustained, optimal effort every day.

To decrease customer churn and lower service costs, smart companies invest regularly in growing customer retention.

Consultant and professional speaker Mark Holmes is president of Springfield-based Consultant Board Inc. and SalesRevenueCoach.com. He’s also the author of “The Five Rules of Megavalue Selling.” He can be reached at mark@salesrevenuecoach.com.

Comments

No comments on this story |
Please log in to add your comment
Editors' Pick

Startup Corner: Brian Hillman and Tyy Ward, Weekend Warrior Fisherman/Beyond Adventure Productions

The company's brand is designed "for those who primarily recreate or have goal-driven outdoor adventures on the weekends."

Most Read
SBJ.net Poll
Which medical marijuana initiative(s) will you vote for on Nov. 6?

View results