MLK Day Special: What Is a Customer Worth?
Only 4 percent of unhappy customers bother to complain. For every complaint we hear, 24 others go uncommunicated to the company—but not to other potential customers.
90 percent who are dissatisfied with the service they receive will not come back or buy again. To make matters worse, each of those unhappy customers will tell his or her story to at least nine other people.
~ BusinessCard 2 Resource Center, “Taking Care of Customers is Taking Care of Business”
“Equal rights” – we hear the phrase a lot, but do we understand what it means, let alone its import?
In short, America is known as the “Land of opportunity”. Everyone gets a “fair shake”, as it were. People are not barred from entry for things simply because of skin color, ethnic background or religion, and these are the things that Martin Luther King taught.
However, does that mean all customers are “equal”? Careful now! Think about where that leads if you choose the wrong criteria!
Let’s get one thing out of the way first, though: A customer is just a category of human being. How do you like to be treated as a customer? Remember the Golden Rule? Would you like to be treated differently because of your race, background, ethnicity? How about your economic status? Should companies even care about your religious affiliation, your sexual preferences or your politics? If there is a differentiator, then is it based upon reality or bigotry?
Let’s not even get into certain groups being mandated to pay for things they don’t believe in, whether or not gay clergy is or is not condoned in the Bible, as that isn’t what I’m talking about here. I am talking about the more mundane stuff we do everyday.
Interestingly, there can be valid reasons for targeting demographics. Will ads for the new iPhone work in a nursing home? Ignoring the technological know-how, what about just being able to see the screens?
So, let’s be honest. There can be right and wrong reasons to differentiate customers. However, if you’re going to exclude a customer, I’d argue you’d better have a solid business (and morally acceptable) case for it.
What about the “difficult customer”, though? If you are simply looking at the bottom line, I’d suggest you are being very short-sighted. That “difficult customer” may be a drain on resources, or they may be the best learning opportunity you have! However, if you don’t try to capture the appropriate data and ask the right questions, you’ll never know!
Do you realize that it can take hundreds or even thousands of dollars to generate one customer? You may have to advertise over and over again just for that customer to remember your company name.
Then, if you get that one customer, one of three things is going to happen: 1. That customer is going to be so overjoyed that they tell all their friends, who then bring a similar type of business to you, 2. That customer may be satisfied but not thrilled and excited, which means they don’t say anything to anyone, or 3. That customer is going to be so disappointed that they bad mouth your company every chance they get. The latter scenario is the one time you don’t want them to remember your company name!
If your service (or rather lack thereof) slams them into category 3, then you have just spent all that money advertising in order to flush it down the toilet. However, if your service launches them into category 1, then it takes no time at all for all that effort to pay for itself.
Now, are all customers “equal”? Well, no, they really aren’t, are they? Human beings are different, after all, and some may take more hand-holding than others. It is said that the 80-20 Rule applies here. You spend 80% of your effort paying attention to the 20%.
The simplistic answers are to say you’ll cater to them or you’ll just do what you can to drop them. However, that again is treating them “equal”, just that now you are lumping them into categories. The problem is that they may be unfairly getting lumped together.
For example, what if you are spending a significant part of your time working on a project that has already been “completed”, but it has so many problems that it is unusable? Is that the customer’s fault? Chances are, the customer is having a real issue with a real cause. The honest truth is that most customers lead busy lives, and complaining takes a lot of time. Unfortunately, in order to make it worth their while to contact you in order to complain, it often has to be a pretty big issue. Otherwise, they may simply tell their friends and family to avoid you, and you may never even know why!
Fixing the problem for this one customer just might be the answer for fixing the problem for a larger segment of your customers than you are aware of.
That’s why simply looking at the number of complaints, or any number at all for that matter, and not realize that behind those numbers are human beings with real problems is just downright too simplistic. It is creating the mindset that “these are the complainers”. However, complainers might be good! After all, if you only listen to those who agree with you and love you, what incentive is there to improve?
There is another downside, however. Those who love and adore you are sometimes just trying to convince themselves that they did not make a mistake. It is a fact that after a significant purchase, people will often continue researching competitive items and their prices. You know why? To continue to justify the expense. The higher the dollar amount, the more likely they are to do so. Yet, it can happen on smaller purchases as well, but just not necessarily to the same extent.
This isn’t totally a bad thing. As long as the perceived value of their purchase remains high, they will likely turn over into referrals and repeat customers. However, they might be so blinded to justifying their purchase that no thought comes along as to how to improve – that is, until a competitor already makes an improvement.
However, the complainer isn’t trying to justify the expense. You’ve already blown it, in their eyes. What they want to know is if and how you are going to make it right. In most cases, they are giving you the chance to redeem yourself. If you do, you might just become the hero. At worst, you’ll likely be adjusted into some neutral position. If you don’t make it right, you almost surely will become the goat.
Yeah, I know. I can hear the whining already. “What if…?” You can come up with a thousand excuses, but I assure you that only 10% of them are going to be real problems in the long run. If even 50% of the loud complainers are cranks and flakes, doesn’t it make sense to make it right for the other 50%?
Companies send people off to training, spending thousand of dollars every year to teach them how to increase sales and retain customers. How much better off would that money be spent on improving a product so that the ratio of complainers goes down and customer support doesn’t eat up as much of the profits? A better question might be, “What if that training money was spent on actually fixing existing problems and learning more about why the customer is having difficulties to begin with?”
Because, remember the customer you delighted and became your referral and/or repeat customer? Now, how much is that customer to you? If you fix the problem for customer A and customer B comes along after you fix the issue …
A two day seminar isn’t going to give you that sort of return, I’ll bet.
OK, but let’s acknowledge that even given all that, not all customers are created equally. Honestly, there really are bad customers. They want a refund even though it is out of warranty and they dropped the tablet into the bathtub … with water in it … and then tried to turn it on. You are right about these customers, but how often do you really run into this? Still, the answer is that you won’t please everybody. That still doesn’t mean that they shouldn’t be listened to. It just means they won’t always be acted upon.
Yet, what are service centers rated on? In most cases, the time it takes to complete the call “successfully”. Honestly, it might not even solve the problem. It is just a case of time’s up, so the rep must move on and hope the next one goes better.
What most customer service seems to not do a good job of is investigating whether or not the customer even has a valid point. The “customer service” rep often isn’t really a thinking human being at all, or at least that isn’t in their job description. I cringe whenever I happen across a job description that says something along the lines of “ability to follow procedures … originality of decision making not required”. Seriously? All that job is is a human equivalent to one of those stupid automated menus that you have to press a number to direct the call!
If your customer is going to feel dignified at the end of the call, might I suggest that you give them a customer service rep that feels dignified enough to pass a little along?
Companies really need to realize the “customer service representative” is the front line of sales. Yes, the front line of sales.
No, I am not talking about upselling!!! This is about retaining customers who will either buy from you in the future or pass along your business card to a friend, neighbor or relative. I’m talking about happy customers who trust you enough to recommend you, which is a form of putting their own name on the line.
The position is:
- Customer – interfacing the person that creates the purpose for which your business operates.
- Service – doing something that provides benefit to the person for which it is performed (see Customer).
- Representative – someone acting on behalf of and reflects either positively or negatively upon the company. The person on the other end of the phone isn’t going to care if this someone is a subcontractor of an outsourced, resourced, insourced contractor or a full time employee. They will represent the face of your company!
The customer service representative needs to have the power to determine whether or not the problem is the customer’s or the company’s. Even if it is the customer’s problem, though, should it be? After all, unless this customer is trying to defraud the company, they are likely representing 24 other customers with a similar issue who are not saying anything but won’t likely come back either.
That should be a frightening statistic when you think about it. If you are putting this person, who is taking their personal time to try to resolve the issue with you, through a human version of “press 1 to complain about…”, then the stakes go up to them becoming the 90% of whom will not come back and will complain to others.
However, if you can solve their problem, and if the problem can be fixed up-front, even if retroactively, then it will perhaps be solved for 25 new customers who would otherwise run into the same issue.
In the end, the customer service department really is just the retrograde of the sales force. It comes in on the backend, and it resolves issues of existing customers. However, if that is all there is to it, then there is a lost opportunity. The reasons why the customers are having difficulty in the first place need to be addressed, and then satisfied customers not only come back, and they not only bring their friends and relatives, but they allow you the opportunity to fix the issue before the next customer even buys the service or product.
Now, are all customers created equal? No. The customer who is complaining in order to try to defraud you should be fired as a customer. However, for the vast majority, I’d argue they are of equal worth, but for very different reasons. The loyal customer from the get-go tells you what you’re doing right. The complainer tells you what you are doing wrong, and their complaint gives you an opportunity to fix it – but not just for them. They give you the opportunity to fix it for future customers as well.
The problem is, not very many companies are doing the right things to capture what is wrong and how to fix it. They are interested in mining numbers rather than solutions. They treat the measurements as the solution rather than fixing the problem as the solution.
When it comes to sales, though, there may be a good reason to differentiate. Not everyone in every demographic is necessarily going to care about your product or service. However, the differentiation must come with morally acceptable parameters and common sense. The mother that finds out her daughter is pregnant because a certain store begins sending coupons for baby diapers due to a trend in spending probably has stepped over the line, wouldn’t you think?
Every customer and every potential customer and every non-customer is a human being. Treat them like you’d like to be treated.