Monday, November 12, 2001
Keep the customer satisfied
Want to know how well your business is going to do? Try this exercise.
Imagine the whole of the customer base the men, the women, the companies, the suppliers and the services and then picture the backs of everybody, lots of cardigans and business suits.
Think about shoe heels. Why? Because that's the last thing you'll see when those formerly loyal customers find another company doing the same thing your company does.
Even as firms acquire customers, many customers are already thinking exit thinking about finding another firm to do the same thing your company does. And a big percentage is doing more than just thinking about it. Those customers are poised to bolt.
Not keeping track v
At the low end of average, about one of five client companies those that have checks that clear without a hitch will head off to do business with a competitor, according to Jill Griffin, co-author of Customer Winback: How to Recapture Lost Customers and Keep Them Loyal.
At the high end of average, that is, the worst case, two of five of firms will hit the road.
She calls it a new era of defection where customer churn is reaching epidemic proportions and is wrecking businesses across the board.
She surveyed 350 companies for the book and found that a staggering 48 percent of the company marketing managers did not know how many customers were lost each year.
Fifty-six percent of marketing managers did not have a system to identify high-risk customers, and 69 percent of sales managers did not know, Ms. Griffin said.
It's an amazing lack of monitoring and understanding lost customers.
Defections cut across a broad cross-section of industries.
And, by the way, she said, newspaper buyers are among the most fickle, with up to 66 percent in some communities churning away from their daily paper each year.
Can it get worse? Yep.
Most sales and marketing managers were given notice but did nothing to stop the defection. Sales agents frequently notified companies, but only about half of the managers responded to the warning.
Know your customers
And that raises another question: What if the sky is truly falling on your small or mid-sized firm and nobody at the company cares?
Knowing who your best customers are and then having an air-tight system for keeping them is the best strategy. So many companies don't know who their best customers are and what needs to be done to keep them, she said.
Figuring out how to keep customers and clients is the mission of Rick Barlow, chairman and chief executive of Frequency Marketing Inc., a full-service loyalty marketing firm in Milford.
If you want to create loyalty without spending a ton of money on expensive customer relationship management software, then start by creating a truly excellent product or service, Mr. Barlow said.
It is an obvious statement, but it's not so obvious that a product that is excellent today will not be so excellent when a competitor copies you.
Committing to a continually improved product or service is the most fundamental, primary route to customer loyalty.
E-mail email@example.com. Past columns at Enquirer.com/columns/eckberg.
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