They Now Tell 500+ Friends Before They Get to the Parking Lot

One of the most fascinating things that I witness from time to time is when a company can’t handle the discerning customer. This is someone who provides feedback and complains and if the substance of the feedback was actually listened to— it can dramatically help a business improve. Often with just a few tweaks, suggested by the customer, a business can actually save the company time, money and keep their brand promise intact.

Tragically, the feedback of a discerning customer can backfire if the company tries to defend vs. fixing the problem. The business “fires” the customer inadvertently. I think of a recent instance of a dissatisfied customer making some appropriate (and factual) comments to another customer. The owner of the business learned of it defended their position, and terminated the relationship without giving any credit to the substance of the feedback, which pertained to broken equipment and lack of cleanliness. Unfortunately for the business owner, the cost of firing this customer resulted in the loss of 9 other customers also. Someone with over 500+ friends will have told everyone about the interaction before they got to the parking lot.

When a business gets a customer complaint, it’s likely that there are a hundred more with the same opinion, so best to do something about it. The hundred customers that you have not heard from – talk behind your back and now online to hundreds more at a time. Have you ever heard the saying “The Customer is Always Right”? In most cases, they are. I do have a Caveat: If there is an act of violence or someone’s safety is in jeopardy, get immediate assistance; you are probably justified in firing (losing) the customer.

Let’s look at the cost losing a customer by contrasting it to the “life time value” of a customer. The following formula does not include the cost of acquiring a new customer. Here is the sample cost breakdown of losing a customer from the scenario I described above.

Lifetime Value of a Customer

Scenario: a fitness club, at which equipment maintenance and cleanliness have deteriorated. Membership revenue is generated monthly (/mo).

LOSSES: 1 customer leaves and convinces 8 friends to leave.
9 memberships x $35 /mo = $315 /mo x 12 months = $3,780
5 years (expected length of a typical membership) = $18,900

Firing “one customer” cost that business almost $19,000 in revenue. Do you think it will fix equipment and improve cleaning to retain other customers? How long do you think a company will be in business with these kinds of losses?

Lesson: If you own or help run a business, you better pay close attention to how your customers feel. Failure to do this will be the loss to your business in (1) revenue when the customer walks and (2) potential revenue when they then tell the world. (3) Not to mention potential loss of the entire business and personal loss of income for the owner, all the employees (jobs), and all your suppliers! Ouch!

Granted, sometimes a customer is not your correct demographic. For example, someone who normally travels First Class will have a tough time traveling on a discount carrier, and you’ll never please them no matter what you do. In cases like this, there is a way to “inform” or teach customers about the different aspects of your business so they understand why something is happening. Refer to my other blogs for the “Knock it Off Nicely” technique where you have no choice but to deal with a situation without causing hard feelings.

This blog addresses the feedback that a customer provides to a business that is “right” and could dramatically help identify vulnerabilities and opportunities to improve. It’s always best to REALLY listen. This is where training staff becomes vitally important; it is no longer optional for companies if they don’t have the skill to handle difficult or unhappy customers. Unfortunately, I often see an employee or even a business owner trying to defend “their” company because they are personally vested. They take any slight or negative criticism personally and may get angry back at the customer. As you know, this just ends up in ill will for both parties. The company always loses, the customer just goes elsewhere. Meanwhile the customer is telling 500+ friends on Facebook what just happened and if the story is “juicy” enough it goes viral. Your business loses in the end.

To avoid the costly scenario of firing a customer, put better customer service practices into your business plan for daily implementation. Every business should look at how to effectively handle customer feedback, whether received face-to-face (often with frustration and anger), or through e-mail, letters, and every form of social media. Remember, it’s not just “1” complaining customer; they are simply the voice of others who are also sharing their “horror stories”. If you don’t listen and go looking for the feedback in the first place, you won’t get a chance to fix it. There is no way to stop the consequences that an unhappy customer can cause to your business these days if you are not dealing with the problems.

Go looking for feedback: create a Google alert to see what others are saying about you. This is often the BEST form of feedback for a company to follow how they could improve. It used to cost tens of thousands of dollars for focus groups and mystery shoppers; now, the feedback is at every business owner’s fingertips.

How you treat the customer effects our entire economy as well as job loss and employment rates directly within our communities and nationally. The world is now competing for our customers. If you feel it is time to bring a new or improved culture of care to get your business to the next level, don’t hesitate to contact me at: info@elaineallison.com

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Give Customers What they Need So They Stay for What They Want.

If you were to ask your child what they wanted for dinner, would they say broccoli or chocolate? Chances are it would not be the broccoli, although as parents we know they need it. Most businesses get lost in trying to deliver the “chocolate” when delivering customer service, and get distracted from their customers’ core needs (the “broccoli”) – the needs that made a customer decide to come to you in the first place.

Take travel for instance. When a customer buys a ticket for a flight or a train ride, they need to move – to be transported! You can give all sorts of bells and whistles along the way, but that train or plane better get a customer to where they’re going. If they’re not moving, the next thing they absolutely need is to be informed. Just look down the aisle of any airplane at 9:02 when it should have left at 9:00. The entire plane is looking around at the flight crew wondering what is going on. They are thankful when the staff make an announcement with an update and they all go back to their reading. Keeping customers moving and informed is what I call the “broccoli” of providing customer needs in this industry. A business must know their essential service and not lose sight of it.

Think also of fast food restaurants. As customers, we need efficient, affordable and clean places to eat with working and “clean” bathrooms. Miss these fundamentals (the “broccoli”) and the customer will probably go elsewhere. Businesses should understand their absolute musts (the “broccoli bits”) of their business to meet customer needs so they and their teams can make decisions and prioritize – especially when things don’t go as planned.

The “chocolate”, on the other hand, are your extras, often known as the things that set you apart or the cool stuff. The whip cream or swirl on top of your coffee; the sleeve so you don’t burn your hand from a hot cup; the pickles; the type of dishes; the decor; a pillow or blanket on a flight. The options are endless, and every business knows what they need to constantly update their “chocolate” to stand out in the crowd. However, those companies who have longevity don’t lose their focus on the “broccoli bits” that their customers need before dishing up the “chocolate” to keep them coming back for more.

If you need a customer service keynote, customer service training, or assistance defining or being reminded of the “broccoli” and the “chocolate” of your business, send us an email to find out how we can help. info@elaineallison.com

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Most people understand that “customer service” refers to serving those who purchase a product or service. That’s “External Customer Service”. But what about “Internal Customer Service”. What is it, and what happens when things break down on the inside of a company?

Internal Customer Service refers to the interactions between all the employees who support the company and those who work on the front line with “The Customer”. Regardless of the department – whether marketing and sales, operations, legal, human resources, I.T., or any other department – the way that these employees treat each other and work on solutions internally actually affects the customer and the bottom line.

Although you may think the customer doesn’t see it, I guarantee that if internal customer service is breaking down, your external customer service feels the hit eventually. This not only dilutes your ability to attract new customers; it also affects how you retain customers. If internal customer service is suffering, a large marketing budget can be wasted expense.

Sample Breakdowns of Internal Customer Service

The following examples show how problems internally can have external effects:

1. A payroll person makes an error on someone’s pay check, the employee can become frustrated, and the customer notices the indifferent attitude of the employee.
2. Inadequate or frayed order entry processes delay delivery of products or services. The customer service representatives who are trying to deliver the product or conduct the transaction are constantly trying to appease the customer, often with costly ramifications both in reconciliation and time. Those who understand the complications of supply chain management can prepare customers, seek alternatives (3rd ways) to the customers’ immediately problems, lessen the impact and stress on colleagues and their customers.
3. Two employees are not speaking to each other or are blaming each other’s departments. When two people ignore, avoid or blame each other because they don’t have the tools to resolve issues, there are service breakdowns internally and further along the line. Honest communication is key, and working towards “resolve” and how to fix things without ill feelings will always catapult an organization forward.

How to Improve Internal Customer Service

Let me help work with your organization with my “I Can Fix That” programs. Your attendees will learn that the focus should be on recognizing their internal service breakdown without blaming and working towards resolve. I’ll help reprogram their thinking to focus on problem solving. In the interactive keynotes and workshops, I teach a variety of techniques so they realize the only thing that counts is fixing the problem. Both employees and customers benefit from these key learning’s, and the behaviours are often enacted the next day.

Email me today to see how we can help improve your Internal Customer Service. info@elaineallison.com or visit my YouTube Channel: http://www.youtube.com/user/ElaineAllisonCSP

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