August 19, 2009
Customer Service in Today's Challenging Economy: Why It's More Important Than Ever, Plus, Five Tips to Get Ahead
You know the statistics: The White House Office of Consumer Affairs' TARP study revealed the following about unhappy customers: 96 percent of dissatisfied customers do not complain directly; 90 percent will not return; one unhappy customer will tell nine other people; and13 percent will tell at least 20 others. So you can only imagine customers' heightened awareness of service in today's economy. They're spending less, but when they do purchase a product or service, they expect to be treated better than ever.
The challenge is that most women business owners-and business leaders in general-today feel the need to scale back to make it through this business cycle. But while it's strategic to focus on working smarter and more efficiently, taking shortcuts when it comes to customers will only hinder your ability to take advantage of the upswing when it happens. And it could lose you some loyal customers along the way.
According to Jim Rohr, an 30-year expert on the subject of growing business by increasing customer loyalty, "When business is slow, that is when we become more ingenious and maybe we even work a little harder. This may be a time for such a strategy. We all know your existing customer is the best source of future growth. The idea is to get your customer to buy more, return more often, or bring you more customers by their word of mouth advertising…you can do this by improving customer loyalty."
Here are five tips for how to improve customer loyalty in challenging times:
1) Intensify your focus on your current customers.
Studies repetitively show that it's easier to sell a new customer than to keep one. Continue to reach out to build your business with potential customers during this time, but focus the majority of your time and effort on showing current customers that they are valued. When you create raving fans, they'll go out and do the selling for you through word-of-mouth referrals.
2) Ask your customers what they think of your service and what you could be doing to serve them even better.
If you really want to know, ask. Most clients will be honest with you and will appreciate the gesture as long as it comes across as genuine. By asking, you'll also gain valuable insight that will help you make future adjustments to increase customer loyalty. Just remember to apply what you learn so your customers know you listened.
3) Take advantage of the fact that others are scaling back.
Go above and beyond in small ways during this time to let customers know you value their relationship and care about their success. Consider gestures as simple as upping your communication. Connect with them on a more regular basis to talk about business challenges and offer appropriate solutions. Send a handwritten card on their birthday, business anniversary or when they have a personal or professional success. Connect them with someone in your network who might be helpful to their business; or share an article they might find of interest.
4) Be innovative in your way of thinking and acting.
Particularly in today's economy, you cannot expect to do the same things and get the same results. Assess the way you're currently reaching out to current and potential customers; rethink your product or service to make sure it's the best it can be; and consider your internal processes and how they might be improved. This isn't business as usual; today's marketplace calls for a more innovative approach to remain on top.
5) Keep in mind that your customers don't have a relationship with your company, but with your people.
That why it's important to continue to invest in your employees during this time, even if it's in small ways. Communicate frequently with them about your company's position since they're likely uneasy during these times. Make sure they are well trained so they can provide excellent service to your customers. Also, think if there are inexpensive perks or incentives you can offer that will keep them engaged and giving 100 percent.
In the end, Rohr says, research has shown that for each 10 percent increase in loyalty, revenue increases by 5 percent. "Most of us would work hard for a 5 percent revenue increase," he says. "Loyalty is built over time and it is built with emotion. That positive emotion comes from a series of positive customer transactions; building a relationship with your customer with ongoing communication; and doing one thing that no one else does, setting you apart from competitors."
Printed with permission from The National Association of Women Business Owners
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