It’s Not Me, It’s You
Are You Forcing Your Customers To Leave You?
Mr. A walks into a mobile phone store on a Saturday morning, having been a loyal customer of the mobile carrier for the last seven years. Mr. A wants to upgrade his iPhone, as he needs the updated model for work. Yet, his carrier has told him that he cannot upgrade for another eight months as he is locked into a strict two-year contract. He cannot upgrade before its two-year term is reached; in fact if Mr. A wants to change he will have to pay the full retail price of the new iPhone, approximately $1,000. This is despite his tenure and exemplary status with his carrier.
Two of his friends recently told him that one of the carrier’s newer competitors is offering an amazing deal. The competitor will buy Mr. A out of his existing contract and offer him upgraded phone, on the spot. The competitor will also not tie him into a new contract for joining. Rather they offer a much more flexible system, tailored to his actual phone use and payment preferences. And while he has to buy the new phone, he could pay it off over 24 months rather than one big lump sum.
Yet Mr. A really does not want to switch. Changing networks seems like a very painful process. He has been with his cellular provider for seven years; his loyalty must mean something. Plus he knows that his existing carrier has the best cellular coverage in the US, essential as he regularly travels to see his own clients.
Every Customer Touchpoint Matters
On arrival in store, a greeter acknowledges Mr. A. She takes his name but does not ask him if he is already a customer. While he waits, he looks at the new iPhones on display. Twice he is moved away from the phones by staff in the store showing the device to others.
The store is not overly busy – Mr. A sees plenty of staff standing at the back of the room, chatting to each other, not to customers. Still, he waits patiently for his name to be called, as instructed.
After 30 minutes, Mr. A’s name is called. He approaches the counter, explains his situation. The first question the employee asks is for his photo ID. Mr. A realizes he does not have his driver’s license as he has left it at home. He does have all of his credit cards, his checkbook, and iPhone on which he can sign into the carrier’s app to access all of his information.
Yet, the employee will not talk further with him, refusing to do anything without seeing a photo ID.
Mr. A walks out of the store, frustrated and angry he now feels like a criminal.
He goes home, gets his ID and goes to the competitor’s store. When there, his hesitation behind switching disappears on the spot. A friendly assistant welcomes him and immediately asks him questions about how she can help him. She listens carefully to Mr. A, helps him choose the best package and shows him how easy it is to get the iPhone he wanted. The experience is very customer centric and so refreshing Mr. A signs up with competitor on the spot. What’s more, he takes the details of the competitor’s enterprise package into his HR lead on Monday morning.
Are You Delighting Your Loyal Customers?
Change out Mr. A’s name for one of your own customers. Make the in-store experience a call to your Help Desk, an interaction with a customer account team or a meeting at a trade show. Switch the two competing carriers out for you and one of your own competitors.
Are you sure this is not happening across your connection points with your customer? Can you hand on heart say you are delighting your existing customers each and every day?
Companies that put customers front and center are well known for it, with good reason. Zappos is a gold standard bearer with the company’s commitment to “WOW with service and experience”. American Express has always had a core mission to be “the world’s most respected service brand” and commits to enabling its employees to provide exceptional customer service, evident if you have ever used an Amex product or service. Warby Parker’s commitment to rigor extends across every aspect of the business, particularly customer service. Call-center employees are recruited straight out of college with the expectation that they’ll quickly rise within the organization once they have excelled at one of Warby’s key pillars — engaging with customers.
The Pain Of Change Is Not A Safeguard
The disruption caused by changing a product, service or partner is huge. The internal legal and procurement approvals for a new partner are lengthy and can take months at large, multi-layered organizations. From data back ups and change readiness; to onboarding; training internal staff; new partner briefings; roll out process; benchmarking; reporting and global frameworks — there are many components to change and it is a large commitment.
The biggest trap you can fall into is assuming that complexity this means your customer base is safe.
Across the board, your competitors are making it easier and faster to switch than ever before. They are quick to mimic you, hiring experts with the industry know how, building out their customer service, rolling out slick marketing campaigns and growing their relationships with your customers whether or not you are not in the room.
Taking a regular view on your customers is key, both from looking at the numbers in terms of revenue, usage, as well as casting a critical eye on any losses as well as the many different factors that tell the actual state of the business relationship itself
The Cost Of Acquiring New Customers Is High
On a recent episode of ABC’s Shark Tank, Echo Valley Meats pitched to the investors on the show for a second time. This online retailer sells premium meats, smoked hams, and sausages to the personal and corporate gift giving market. This small business owner shared with the Sharks was that it costs him $12 to acquire a new customer, yet only $1 to gain more business from one of his existing customers. Why would he not focus on that $1 cost instead of the $12?
Across the board customer acquisition values remain high — averages range in different vertical markets from $7 in the travel space to a whopping $315 in the telecoms space.
One miscalculation that many businesses make involves the ease with which they will attract new customers. Entrepreneur quotes this as “field of dreams marketing”, or assuming that just because the door is open, new customers will come flooding through the it.
The relative costs — both financially and of your time — that it takes to bring in new customers far outweigh the cost of delivering exceptional customer service and investing in partnership with your existing base.
Don’t Break Up With Your Customers
True loyalty doesn’t just serve and preserve valuable customer relationships; it creates and inspires more valuable customers. Don’t force your customers to consider the competition like Mr A by overlooking that. Here are my five key takeaways when thinking about your customer relationships:
- Loyalty is an investment on both sides, and much more than just an exchange — commit to loyalty as well as asking for it.
- Ensure that every touch point your customers have with you is a consistent experience — they all matter
- Actions speak louder than words, and yours should remind your customers of the reasons they chose you in the first place
- Don’t assume that tenure means you can take your foot off the gas; you should be paying as much attention to your longest standing customers as your newest
- And if you need a stark reminder of the value of investing in your existing customers, think about the cost of acquiring new ones