I believe the rule of thumb is it takes 5 times as much effort to get a new customer than it does to keep an existing one. All too often we focus so much on getting new customers that we forget about who’s supporting us now!
Have you ever calculated what a customers worth is over time? Say you have a 30-year old contractor that usually buys $5,000 worth of your stuff a year. Doesn’t sound like much, but if you keep him happy, you probably will have him for 30 years before he retires. So assuming he doesn’t grow his business or you don’t come out with anything new for him to buy over the next 30 years, he would have spent $150,000 with you. Is he worth keeping? I’d say so. So what are you doing to keep him happy? Unless you’re selling a proprietary product, your competition is knocking on his door every chance they get.
I know many of you who follow me don’t buy shoes online, but I’d bet that if you asked your wife if she’s heard of Zappos, she’d say yes. I picked them as an example and even wrote a post on their book, Does Customer Service Deliver Happiness, where they show that by even selling name branded shoes online, they could, in many cases, outsell the brand itself in the online arena. The way they did it was with customer service.
So here are some points for you to consider when evaluating your Customer Service department:
- Try to keep the personal touch (human being) as the initial touch point if you can.
- Empower your CS people to solve a problem immediately without having to go through 3 levels of supervisors.
- Reward customers with a loyalty program as a way of saying thanks.
- Customer surveys are a great way to get feedback, not only on how you’re doing, but for getting ideas for future products.
I’d also suggest if you haven’t done so in a while to call your customer service department and see what your experience is. If you aren’t impressed, what do you think your customers will feel like?
I’d also suggest reading Delivering Happiness that shows how Zappos grew to be a billion dollar company using customer service to set them apart from their competition.