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Fact: Customers leave your business because of an
accumulation of small unpleasant experiences.
Only rarely does a single awful experience immediately end the customer
relationship. It's the buildup of a thousand small wounds that kills once-good
customer relationships.
Our view: Many business owners and managers overlook one of the
best and cheapest sources of free information: former customers. Why guess at
how to improve your business? Your former customers would love to tell you what
you can do better. Then you know what to fix.
A Radial client suffered from high customer turnover. One former patron said:
1) After five years, the receptionist still asked for ID when she paid by check
or credit card. Why? They had five years of her purchase history in the
computer. Couldn't they also see that she had never bounced a check? And
why, after five years, did the staff still not recognize her? Many of them had
been there just as long.
2) Frequently, while receiving spa services, the technician working with her
would talk up a storm with the adjacent employee, often forgetting to continue
the spa service when she got to the juicy bits of her story.
3) Fancy video monitors installed two years ago when the shop first opened quit
working within months. They've never been fixed or removed, so now customers
stare at test patterns and listen to static in the waiting room.
4) When she called to schedule an appointment, she was inevitably immediately
put on hold for several minutes. There never seemed to be a good time to call.
5) When she stopped to pay her bill on the way out, the receptionist inevitably
would answer the phone while simultaneously handling her transaction, or stop to
answer someone else's question. Often she'd complete the transaction and the
only verbal interaction she would've had with the front desk staff was the
abrupt question: "Name?"
The final "nick" that killed this relationship: She arrived for a 1 p.m.
appointment. She waited…and waited…for over 45 minutes. No one ever explained
the wait, nor had they warned her when she arrived that they were running late.
She finally walked up to the counter and told them she'd have to leave - she
couldn’t wait any longer. She got no apology, no thank you for waiting (say, a
coupon for free service), and no offer to immediately reschedule. The
receptionist simply said "OK" and immediately turned to the next task.
Action: Here's our eight-step plan to tap into this
underappreciated resource:
1) Get a list of former customers. Call them personally. Don't delegate this job
to the lowest-paid, most junior employee. This discussion deserves management
attention.
2) Don't further alienate them by sending generic comment cards, surveys, and
questionnaires about why they left. First, these tools all reflect your
preconceptions about why customers leave. Second, filling out forms frustrates
customers who really want to give you detailed feedback. You'll get insights
cheaper and faster simply by talking to them.
3) Have a couple of questions in mind to get the conversation started. Don't
limit yourself to predefined questions, however. Your goal is to have a real
discussion about what went wrong. Believe us, they will love to be asked and
they will want to tell you, in detail. Take notes.
4) At the end of the call, summarize the issues you heard the customer
describe. Reassure the customer that you really listened by restating your
understanding of why the customer chose to take his or her business elsewhere.
For example: "When we put you on hold repeatedly, you feel like we don't
want your business."
5) Truth is good. Emphasize that you take the issue seriously, but don't
automatically commit to fix all problems. You'll discover that some issues do
indeed need to be addressed, and some don't. If you're not sure what you're
going to do about a particular issue, say so. No empty promises, please!
6) Don't blame your employees or explain away a problem to a customer by
criticizing your staff. You're responsible for the business. If you've hired
people who aren't effective, it's your responsibility to fix that. Perhaps you
need to improve your hiring practices, provide training, or give employees
additional resources so that they can perform well.
7) Don't insult unhappy former customers by flinging discount coupons at
them. Instead, offer them your sincere appreciation for their feedback. Tell
them that you're committed to improving the business so that they will be
pleasantly surprised if they decide to give you another chance. If you do make
business changes as a result of their feedback, notify them and consider
offering a coupon for a free - not discounted - service or product. Offering a
discount that they can only use if they buy more goods or services from you
simply makes them angrier.
8) After you've completed several calls, review your notes. Look for trends
and common themes. Decide which issues should be addressed. Make these a
priority and include your staff in developing plans to fix them. Look for root
causes, not just symptoms. For example, if you made better hiring decisions
perhaps additional training wouldn't be necessary.
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