You Want To Keep Your Customers? – Don’t Let Your Service Slip!ByRaymond D. Matkowsky
The prospect of leaving a vendor is stressful. Organizations fear change just like most humans during the course of their daily lives. What we don’t know scares us. Will our new vendor be better than our old relationship? Have we sunk a great deal of money into our present relationship? Will we ever make it up?
Reasons For Customers Leaving
Why are my customers leaving? This is a question that almost every businessperson asks at some point in time. Departure reasons can be grouped into five general categories. 1% of your customers pass away with no one to take over the business. 3% move to a different location. 14% are lured away by a competitor. A full 82% are dissatisfied with your product or service.
The 14% that are lured away by a competitor can be counteracted by offering better value than the competitor. Value, better known as service, is the factor that helps the client choose you in the first place and continue to use you in the future. This is true even if the competitor offers a lower price. If this describes your position, look hard at what you can do to make yourself more valuable to the client and lure them back.
You will always have some people that buy solely on price, but most don’t. You don’t really want those customers that buy solely on price. They will take up a lot of your time and will leave you at the drop of a hat. Plus, (this is only my opinion) these people do not realize the potential cost of doing so.
I find it hard to believe that there are many people who never think about service and its importance to businesses. Many vendors have a short term mindset. This is especially true of vendors with a strong public awareness or those that have a virtual monopoly in the area. Working to help improve a customer’s business may turn out to be more valuable to both the vendor and the customer than just a price reduction. What is worse, some people believe that poor service can be used to force upgrades upon customers.
Desperation
Over the past twelve years, I had to terminate long term relationships with two vendors. Twelve years ago I ended a thirty year relationship I had with a vendor. Over those thirty years the company changed hands three times. The last management did not seem to know what its right and left hands were doing nor did they seem to care.
Recently and out of desperation, I ended a forty-eight year relationship. During the first forty-five years, my business requested service from the vendor once. Approximately three years ago, the vendor rolled out a new service. Since that time, I made over twenty calls reporting problems and requesting service. Each time I was told that I wouldn’t have these problems if I upgraded to the new service. I did not receive an answer when I asked why I didn’t have these problems for the first forty-five years. The new service would present certain complications for my business that wasn’t acceptable. The customer is the one that determines if something has value, not the vendor. The vendor must cater to the individual perception. True or not, I certainly did perceive that the vendor was trying to force the new service onto people who did not want it. Perception is just as important as the truth!
In both instances, poor service had a very negative impact on me. It caused negative issues for me. I sensed that loyalty was of no consequence. I felt like I was only a source of revenue and I was not entitled to any considerations in exchange for that revenue.
It takes a long time to build a solid relationship with customers. It takes only a few missteps to destroy that relationship. You probably can count on inertia or the lack of it. Some vendors count on knowing how stressful and costly leaving can be. But sooner or later someone will say enough is enough. Customers leave reluctantly but usually in desperation!
If you have any further suggestions, do not keep it to yourself. Help your fellow readers!
If you have any questions, comments or suggestions drop me a line at rdm@datastats.com.
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