‘Businesses often make decisions based on a number of variables:
“What is most profitable?”
“How can we do it more efficiently?”
“How do we sell more?”
Tons of time and money are expended to develop the best possible way to deliver, structure, message and entice a new customer. Businesses are often asking, “How do we attract more customers?” You probably do it yourself.
Yet, not enough businesses spend significantly on the most important question: “How will my customer experience this?”
All the prisms through which we design our businesses are valuable. Among all other financial metrics, though, customer retention is perhaps closest to the heart of any business’ sustainability. Think about your customers. They already paid money to you. Gratifying them matters.
It matters for lots of reasons, including simple revenue. Your existing customers are an annuity. When they are happy and satisfied, they buy again. Whether that means a repeat sale, recurring fees or additional purchases of value-added services, they remain the most inexpensive source of new and recurring revenue in any business. It is much easier and less expensive to serve and sell an existing customer than to attract a new one.
The next important reason to worry about your customers’ happiness is to ensure a modicum of risk management. Unhappy customers can and do cost money in the damage they can do, like posting a bad review online, for example.
Finally, customer happiness is directly correlated to customer referrals. In the hierarchy of customer acquisition, referrals from delighted customers are second only to repeat sales in affordability. Based on all of that, making an existing customer happy – even in a business where new business is the lifeblood – is job No. 1.
One of the places where this often crosses my mind is when I go to the gym. I travel for work and often find myself in different fitness centers. It’s a great example of how any given fitness center addresses customer experience … or doesn’t.
In the fitness industry, the value of a happy customer is measurable and sizable. Members pay monthly and are the source of the recurring revenue that makes up most of a gym’s cash flow. Unhappy members spread bad news and don’t bring in new members. That ought to translate into a significant focus on current members. Ought to!
Recently, I was in a large, national gym hoping to use a spinning bike outside of class time. In the main cardio area of the gym, there were at least 50 other machines, but no spinning bikes. I spotted an empty studio with 75 bikes in it and went in but couldn’t find the light switch. I asked someone for help and was told that the switch was at the front desk — on the other side of the building, at least 75 meters away from the spinning studio. Apparently, the lights were set to come on at class times only. However, even if the front desk overrides this, they automatically switch off again after 15 minutes – hardly enough time to do a workout.
I pondered what the thought process had been for this. Well, the lights are on timers so that they don’t waste energy and money during the hours when the studio isn’t in use. Question answered: “How can we save money on electricity and be greener?” So far so good.
The timed override also answered a question: “How will the janitorial staff clean?” Yep, concern addressed.
Finally, one more question was addressed: “How will this policy affect the sales team when they give tours?” Check!
You can start to see the prisms through which this policy was assessed: operational efficiency and new revenue. But no one asked the most important question: “How will our current members experience this policy?”
Since existing members are under contract, they are not seen as a key variable. They matter during the sales process. They matter during a trial pass. But they don’t matter much once they sign up.
Current customers aren’t deliberately neglected. But since this policy was enacted at every one of the 100-plus locations of this club in this state, thousands of members who provide the company’s statewide revenue can’t use spinning bikes for 21 hours a day. This wasn’t meant to frustrate current members, yet it likely does. And it’s all because no one asked the most important question. Many paying gym members virtually never use the gym, and eventually, they are likely to decide to stop paying too. Keeping the active members matters.
In your own enterprise, are you looking at your policies, even the most seemingly unrelated, through your customers’ eyes? Simple things that make sense to you may become problems for them.
For example, do your tools really work? In retail, often the hardest thing for a customer is to find an item in the store. In the medical industry, there’s often no avenue for patients to ask follow-up questions of physicians without a new appointment.
Customer surveys are popular but tend only to scrutinize employee performance. To learn where you can improve, your questions should differ from the standard language meant to better train or weed out poor staff. How about:
- “Do our policies make it easy to work with us?”
- “Is there anything you’ve noticed that we should know?”
- “What could we improve or change to make your experience better?”
These ask for criticism, not kudos. Yes, they’re probably less useful for marketing, but they’re much more useful for retention.
In your e-commerce business, instead of just attempting to get a customer to purchase abandoned merchandise, why not also ask why they didn’t make the purchase? It could add up to a higher average order value for your next 10,000 transactions. Or perhaps conduct a customer focus group every so often.
Remember, you could save a lot by keeping one customer happy instead of attracting two more.’
Today, BARE International sets the industry standard as one of the largest independent providers of customer experience research, data, and analytics for companies worldwide. BARE’s customer experience research can provide you with critical data to make meaningful business decisions. Ask us how.
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