Attentive Customer Service is Worth Millions
Posted by Bruce W. Woolpert on Mar 18, 2015
On those days when things go badly at work and a customer is left dissatisfied, you might respond with, “Well, there’s always tomorrow.” This way of thinking is commonly accepted in many, if not most workplaces, but it is terribly misleading because it ignores the lifetime value of a customer. “Lifetime value” is the accumulated projected sales to a customer, based on the assumption that the business is retained each year for a lifetime. Repeat business has immense importance – it has lower overall cost and is the best indicator of long-term business viability.
As an example, imagine a customer who on one day spends $800 to purchase ready-mix concrete. The actual value of this sale is far greater, because by doing a good job for the customer today, the concrete dispatcher has preserved the relationship with the customer and protected the lifetime value of the business. Taking good care of this customer’s business today is worth millions ($800 per day x 260 days per year x 10 years = $2.08M).
Some companies spend lavishly to attract new customers but do little to ensure the continuing loyalty of existing customers. A focus on customer satisfaction and service with attention to lifetime customer value should be a primary goal for every business.
- Hiring This is an important step that doesn’t always get the attention it deserves. Are you hiring people who can handle an $800 transaction, but not the $2M business it is in reality?
- Welcoming Complaints Not just a “pain in the butt” interruption, a complaint actually provides an excellent opportunity to build customer loyalty. Studies show that customers who have complaints that receive an appropriate response are ten times more loyal than those who never complain at all.
- Identify Problems and Fix Them Customers don’t mind giving feedback to help a company improve, but they expect the feedback to be translated into real product and service improvements. They don’t want excuses or explanations. Results are what counts.
- Go the Extra Mile to Delight Your Customer Loyalty is developed when a business goes far beyond the average to provide truly exceptional quality and service. Being “good” isn’t good enough.
- Employee Satisfaction Supports Customer Satisfaction Unhappy employees don’t make for happy customers. When employees feel their jobs provide them with the freedom, responsibility and authority to meet customer needs, their clients report strong satisfaction with products and service. The result is loyalty from both the customer and the employee.
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