Those Pesky Customers by Emily R. Coleman, Ph.D

We all know them:

  • Those unreasonable people who don’t understand business efficiencies and want to talk to a live representative.  And worse, a live representative who actually can speak their language.
  • Those people who don’t grasp the concept of “try, try again,” and immediately call for technical support or complain about the product.
  • Those delusional types who think executives have nothing better to do with their day than solve customer problems.

Doing business would be so much easier if we didn’t have to deal with customers.

Okay, okay.  This is obviously an exaggeration.  Unfortunately, however, not by that much.  Even today, with a down economy, with a rapacious competitive environment, and with buyers who can go elsewhere, customers are seen as a group to be measured and managed.

I recently read a fun article on the subject by Greg Harris.

http://www.jameco.com/Jameco/email/corner/listenandlearnall.html

His position is that “the customer’s voice can serve as a company’s guiding light and everyone on [our] management team makes talking to customers a high priority.”

I’m all for “customer engagement” and matrices to measure it.  I’m all for customer satisfaction studies so you can see where problems lie.  I’m all for “this call may be monitored” to see how employees handle customers.

But mostly I’m for the fact that marketing is about communicating with customers, users, and prospects.  And the best way to do that is to talk to them – and with them – and get to know what actually makes them tick (as opposed to what we think makes them tick).

Therefore, allow me to propose something revolutionary:

Let’s put aside our assigned roles, our job-defined turfs, and our egos.  Let’s agree that no one can claim to be a marketing professional without spending a portion of our day – or our week, or our month – without actually talking to real customers, users, and prospects.  Let’s go out on real-world sales calls.  Let’s spend some time taking the calls customer support reps routinely handle.

Let’s get beyond the numbers.

Keep the matrices.  Keep the market research.  Keep the technologies that, hopefully, make us more efficient.  But as we create our strategies, our tactics, our messages, wouldn’t it be useful to have some personal, gut-level, insight into the people we are trying to reach?

About Emily R. Coleman

Dr. Emily R. Coleman is President of Competitive Advantage Marketing Inc, a marketing firm that specializes in taking small, medium, and large companies to the next level by helping them develop and deepen their competitive edge in the marketplace. Dr. Coleman has more than 30 years of hands-on executive management experience working with companies, from Fortune 100 firms to entrepreneurial enterprises. Dr. Coleman’s expertise extends from the integration of corporate-wide marketing communications to the development and implementation of strategy into product development and branding. Dr. Coleman can be reached at ecoleman@colemanmgt.com.    At LinkedIn:  http://www.linkedin.com/pub/emily-r-coleman/0/5a/714  On Facebook:  http://www.facebook.com/pages/Competitive-Advantage-Marketing-Inc-CAM/223500261070884  At Twitter:  http://www.twitter.com/e_r_coleman

Customer Retention: How to get the Gift that Keeps on Giving

Small improvements in customer retention can lead to significant improvements in the bottom line . . . year after year after year.
When it comes to Customer Retention, you can do better

Most companies retain 85% to 87% of their customers. That’s not bad. In school, you’d get a B+ for that kind of performance. But when you convert that retention rate into actual customer losses, you quickly see that there’s a “hidden problem” here.

After all, when you retain 87% of your customers, you lose 13%. And when you have a huge nationwide customer base, that means millions of customers are packing up all their accounts and heading for the door each year. (see How to keep clients from heading for the exits http://wp.me/p28Mqi-1D for tips on how to improve).

That’s a lot of lost business. And it takes an extraordinary amount of effort and expense to acquire new customers to replace this customer attrition. In fact, GartnerG2, a division of Gartner Inc., says it costs nearly five times as much to acquire a new customer as it does to retain one. High value customers are even more expensive to replace.

Some attrition comes with the territory

That brings up the big question: “Why do customers leave in the first place?” There are a lot of reasons.

In banking for example, some customers move to areas where the company doesn’t operate any banking centers. SOme find that they no longer need their services. And some, unfortunately, come to the end of their lives. Let’s face it. There is nothing you can do to keep a customer who dies or moves to Tahiti.

In addition, some banks close out accounts every year for valid risk management reasons. Add it all up, many banks lose about 6% of customers every year for reasons that they can’t – or shouldn’t – do anything about.

Keeping more customers can add millions to the bottom line

But what about the rest of the customer attrition? Most of the customers are lost for a host of reasons that companies CAN do something about.

Poor or inhospitable service, payment and deposit errors, inconvenience, the failure to provide the value people expect . . . if you work hard to correct these problems you can retain many of these customers. And if you do that, you can create an annuity revenue stream the size of the Mississippi.

Even a small increase pays big dividends

How big is the potential windfall? At a large bank, a 1% increase in overall customer retention was found to add about $70 million to the bottom line in the first year after improvement. At the two-year mark, the net present value (NPV) jumps to $200 million. After three years, the financial benefits – which multiply like compound interest – will reach approximately $400 million in NPV.

Read more of this post

How to keep clients from heading for the exits.

Developing a high performance culture that motivates all employees and sets a new standard for client satisfaction, operational excellence and profitable account management should be an objective for every organization. Even if you are currently experiencing double digit revenue growth, this focus could help you identify and solve issues lurking in the background that threaten to undermine the future of the business.

The attached case study features a dynamic employee engagement campaign that kicked a $2B services organization into overdrive.

Even though the global recession has shifted the focus of most organizations to cost reduction, I believe that effective approaches to employee engagement will separate the winners from the losers when the economy recovers.

To read more about how to keep clients from heading for the exit, click on the following link to read the full case study “The Power of Employee Engagement”: http://wp.me/P28Mqi-1m

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