In October 2017 we wrote a blog entitled “How to Lose Customers.”
It was focused on larger companies in the market.
This second part of the series is focused on the more personal interactions of small business and how that impacts their ability to maintain their customer base.
Let’s start with a few statistics:
· 68% of customer defection takes place because customers feel poorly treated
· 95% of people who have a bad experience do not complain
· 13% tell up to 20 other people (and a lot more on social media) while a satisfied customer tells only 5 other people (and is less likely to write a social media review)
· It can cost five times more to gain a new customer than to retain an existing one
A Limited Number …
I live in a relatively small town with a limited number of “fine dining” establishments, especially in the winter. Recently, four of us went to dinner at one of these places. The other couple knew the owner well and selected the restaurant.
We had been there many times before and had always had a reasonable experience. But that was about to change.
I walked in and told the owner we were here and had a reservation. She informed me that our reservation was for an hour later, which was disputed by the person who made the reservation. But since they had tables, no harm, no foul.
The server took our order and left the table. We asked for separate checks as one couple drinks and the other doesn’t.
She came back in a few minutes with an order pad saying that she believed that she had the order screwed up and could we start again. We laughed and did so.
If It Could Go Wrong … It Did
To state that everything went wrong would be the understatement of the night.
Some salads and appetizers came in the proper order, others didn’t come at all.
One salad came with the entrée, and one of us had a clam dish in which one third to one half of the clam shells were empty.
And, of course, we did not get separate checks and were billed for one of the salads that did not show up.
Despite the apology of the owner, we stated: “We’ll never be back.” And that started us thinking about how many businesses lose customers and clients who never say anything; they just leave.
An Interesting Observation …
Jason Fried of Basecamp made an interesting observation: “Customers don’t just buy a product or service; they switch from something else.
And customers don’t just leave a product or service; they switch to something else.”
Remember, you and your business are not in the business of getting more customers.
You’re in the business of getting one more customer for life. And then another one and another one.
What is a customer for life?
It’s someone who supports you and your business, will frequently buy from you and will consistently refer more people to your business.
They are the people that make up 80% of your continuing revenue.
Simply Amazing …
Another set of stories center around two individuals that spend their days at small eateries while working on the internet.
In one case, the customer ordered the daily special; a shrimp salad. A few minutes later, the owner came out and apologized, stating that they were out of the daily special. But, she said; “Please order anything else on the menu and it will be free”. FREE!
A restaurant runs out of what a customer ordered and to make it up, they offered something for free. Amazing.
Let’s contrast to the other individual who spent much of his time at another bookstore and coffee shop.
According to his own words: “I was a loyal customer and wanted to support the store I spent so much time in.
Between books and expensive cappuccinos, I was spending more than $1,000 per month and was happy about it.” Until……..
Then, A New Rule …
The store implemented a new rule that no one could occupy a café table for more than 90 minutes. And the customer understood the rule because someone would come in, get a free glass of water or one drink and spend 10 hours working.
But, when our customer was there, he would buy drinks, food and books throughout the day. So, on the days he was there, he spent a lot of money.
Until one day, the manager told him that he could only stay for 90 minutes.
And even though the café was almost empty, and he had just ordered more food to eat, the manager explained that there were no exceptions to the rule. And, at least $1,000 per month walked out the door to never return.
What People Will Remember …
The lesson here can be summed up in a quote from Maya Angelou:
“People will forget what you said.
People will forget what you did.
But people will never forget how you made them feel.“
Whatever the size or shape of your business, that lesson will, sooner or later, define the success of your enterprise.
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