Reece: Treating customer right, even when he's wrong
The Customer may not always be right but they still are the customer, right? Something we all struggle with as business owners is a positive “customer experience.” There are some pretty compelling statistics that reinforce that idea:
1. Price is not the main reason for customer churn, it is actually due to the overall poor quality of customer service. (Accenture global customer satisfaction report 2008).
2. A customer is four times more likely to defect to a competitor if the problem is service-related than price- or product-related. (Bain & Company).
3. The probability of selling to an existing customer is 60 to 70 percent. The probability of selling to a new prospect is 5 to 20 percent. (Marketing Metrics).
4. For every customer complaint there are 26 other unhappy customers who have remained silent. (Lee Resource).
5. A 2 percent increase in customer retention has the same effect as decreasing costs by 10 percent. (Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy).
6. Ninety-six percent of unhappy customers don’t complain; however 91 percent of those will simply leave and never come back. (1 Financial Training services).
7. A dissatisfied customer will tell between nine and15 people about his experience. Around 13 percent of dissatisfied customers tell more than 20 people. (White House Office of Consumer Affairs).
8. Happy customers who get their issue resolved tell about four to six people about their experience. (White House Office of Consumer Affairs).
9. Seventy percent of buying experiences are based on how customesr feel they are being treated. (McKinsey).
10. Fifty-five percent of customers would pay extra to guarantee a better service. (Defaqto research).
11. Customers who rate you 5 on a scale from 1 to 5 are six times more likely to buy from you again, compared to “only” giving you a score of 4.8. (TeleFaction data research).
12. It takes 12 positive experiences to make up for one unresolved negative experience. (“Understanding Customers” by Ruby Newell-Legner).
13. A 5 percent reduction in the customer defection rate can increase profits by 5 to 95 percent. (Bain & Company).
14. It costs six to seven times more to acquire a new customer than retain an existing one. (Bain & Company).
15. E-commerce spending for new customers is on average $24.50, compared to $52.50 for repeat customers. (McKinsey).
There are many others who promote the idea that customers can and sometimes should be “fired.” Frankly, some people you just cannot satisfy, but “fire” them? In the article “The Top 5 Reasons Why the ‘Customer is Always Right’ is Wrong” by Alexander Kjerulf, he suggests examples of when it’s maybe appropriate:
• Some customers are just plain wrong. The fact is that some customers are just plain wrong, those businesses are better off without them, and that managers siding with unreasonable customers over employees is a very bad idea, that results in worse customer service.
• It results in worse customer service. When you put the employees first, they put the customers first. Put employees first and they will be happy at work. Employees who are happy at work give better customer service because they care more about other people, including customers, they have more energy, they are happy, meaning they are more fun to talk to and interact with and they are more motivated.
• Some customers are bad for business. Most businesses think that “the more customers the better.” But some customers are, quite simply, bad for business.
• It gives abrasive customers an unfair advantage. Using the slogan “The customer is always right” abusive customers can demand just about anything – they’re right by definition, aren’t they? This makes the employees’ job that much harder, when trying to rein them in. Also, it means that abusive people get better treatment and conditions than nice people.
• It makes employees unhappy. There are plenty of examples of bad employees giving lousy customer service. But trying to solve this by declaring the customer “always right” is counter-productive. One executive trusts his people over unreasonable customers. What I like about this attitude is that it balances employees and customers, where the “always right” maxim squarely favors the customer – which is not a good idea, because it causes resentment among employees.
I really believe that if you put your people first and support their decisions, you’ll then watch them put the customer first and the result will be an exceptional customer experience.
* * *
Today from 5 to 7 p.m., join the Crystal Lake Babe Ruth League as they host their always enjoyable annual mixer at Lippold Park, 851 W. Route 176, Crystal Lake. On June 18 from 5 to 7 p.m., join Two Tails Market/Eatery 2400 Lake Shore Drive, Woodstock, as they host a multi-chamber mixer. Plan on attending to strengthen your relationship building!
* * *
Please welcome our newest members! 21st Century Game Film Inc., Alan Burba; Advanced Laser and Cosmetic Dentistry, Chrag Patel; Cosmetology & Spa Institute, Cortney Saylor; Country Financial, Peter Walters; NAMI McHenry County Chapter, Cindy Ratchford; Operation Click, Sean McGrath; Pleasing Cuisine, Tony Gomez; Pump It Up, Vincent Payne; PunchSmart LLC, Derek Rauchenberger; Trovare Inc., Serge Laptev; and Zinke for Sheriff 2014, Andrew Zinke.
• Gary Reece is president of the Crystal Lake Chamber of Commerce. Email email@example.com.