I was at a friends electrical business the other day, and he was looking at a list of trainings for his team. He pointed at a customer service class that was listed on the paper, laughed, and said sarcastically, “Yeah like I would pay for that.”
I said “WHOA bud, Let me ask you something? What is your company’s customer retention percentage? Do you know?”. I then waited a second for an answer but he just stared at me blankly so I asked, “Why don’t you know?”.
Every year thousands of companies, especially those in the home services industries, lose customers. They slip through their fingers never to be seen again. We should be asking…Why do we lose those customers? What steps can we take to keep them?
We must start by understanding why customers leave. In a study done by RightNow Technologies 73% of customers responded that they stopped using a company because of what they consider bad customer service. Their biggest gripe was they did not feel valued or heard. Ironically, the company did not see it that way, they responded that the customer was lost because the price was too high.
Guess what…The company was wrong!!!!
When you study a chart like this it really drives home the inherent bias that we as business owners have. It also shows us the gap between what we think the problem is and what the customer thinks the problem is.
“Start thinking like a Buyer…Stop thinking like a seller”-Matt Koop
Why does this matter? Well, customer acquisition cost averages $550 to get your phone to ring. (This cost includes all the people who choose not to make an appointment and those who decline your services once the sales offer is made). If you can raise customer retention, then you will lower the cost of customer acquisition. This transfers directly to your bottom line adding more profit. It also allows you to create better customer experiences enabling you to convert them into long term fanatical fans of your company and its people. Something as small as a 5% bump in customer retention will increase profits by 25%….
“Start paying attention to what your customers want… Or someone else will!”-Rob Matheny
So next time customer service training is being offered and you think to yourself “Why should I pay for that?” Stop and think about how good customer service equals CASH!!
