Categories
customer retention Customer service

This place is perfect.

Have you ever said “This place is perfect” after spending some time in a store, restaurant or other business? What made that place “perfect”? Many times, it’s little things.

Sometimes, it’s about the things you might normally forget. Other times, it’s about things you simply don’t expect. Or a lack of the things you’d normally expect. No matter which one creates the perfect experience, seek out these things.

Odors or fragrances?

At times, it’s about cleaning things that will never stay clean. I was walking down a New Orleans sidewalk a few blocks down from Bourbon Street on a recent Saturday morning. Across the narrow cobblestone street from me, a man in a waiter smock was mopping the sidewalk. Not sweeping it, MOPPING it. If you’ve been in any “party zone” area of town on the morning after, you know he was making sure today’s customers wouldn’t smell anything left by revelers who happened to pass by after his restaurant closed.

Strong, unpleasant odors have a way of making a sizable first impression. Mopping the sidewalk was one way to make sure that that morning’s customers didn’t get the wrong first impression as they entered the restaurant. Imagine if you were part of one of the groups entering the restaurant that morning and were accompanied by your best client, or someone who would be – if they said “Yes” at that lunch. Or perhaps you’re meeting someone to pop the question. Suddenly, a simple mopping job on a sidewalk takes on a different level of importance. Mopping the sidewalk has transformed from a chore into something much more important.

When did you last sweep and mop (or at least hose down) the sidewalk in front of your place? What could a “little” change to the experiences of entering your business mean to your customers? Maybe you should ask them. They might surprise you.

Surprising experiences

A couple of weeks ago, I stopped at a highway rest stop in eastern Idaho. A state facility, not a Federal one. Ever seen a spotless highway rest stop? During the summer? On any highway? I have. I was floored. It was perfectly clean and smelled like anything but a highway rest stop, particularly one along a busy highway. Spotless, yet not antiseptic, or smelling of mildew. Shockingly perfect. We’ve all been in heavily used rest stops that were nothing like that one.

Something as mundane as a highway rest stop is still memorable weeks later because someone who takes their job seriously has done more than simply clean the place.

What little improvement or consistently higher-level attention to detail in the mundane work around your place could produce that kind of surprising experience?

Mea culpas everywhere

The reverse of these little things that create perfect experiences often happen when we forget why we’re in business, who we’re serving, and why. You may have seen recent advertisements where Facebook, Uber, and Wells Fargo grovel for your forgiveness. Maybe they’re legitimate, maybe not. The trouble they have to overcome is that many people still aren’t sure if their apologies are real. Likewise, you still aren’t sure they’ve truly learned a lesson from their mistakes.

These are the questions you never want to create in the minds of your customers. It takes a great deal of time and effort to re-earn lost trust. When a woman no longer feels safe doing business with your company, you may never regain her trust. This isn’t solely an Uber issue, but their safety issues make an ideal example. You can create unsafe or uncomfortable situations in almost every business. Even woman-owned businesses have to reconsider situations they may not personally be concerned about, as customers have experienced things that they may not have had to deal with.

Finding what makes yours perfect

By now, you may be wondering what sort of little touches or improvements would make your business perfect. Look back at your customer service logs, complaints and suggestions received. Taking the perspective of a customer, review the ones that seemed petty, tiny, “little and unimportant”, or similar. More often than not, these situations tend to provide clues to finding angles to approaching “perfection”. They may not be the keys themselves, but they’ll often point you in the right direction. The key to creating so-called perfection is wanting to.

Categories
Competition customer retention

Growth, market size and renewal rate

Everyone I talk to wants to grow their business. Yet in the last ~20 years, I can’t recall a single growth conversation that included their renewal rate or the size of the market that remained, until I asked.

How big is your market?

It’s the question that often provokes people to look away and give a laser beam stare at a fluttering leaf on a distant elm tree as they think about what the number is and/or how they’ll figure it out.

For example… “So how many programmers, accountants, cities under 20,000 population, dog kennels, or whatever are there right now?

In other words, how big is your market? If everyone who actually should be your customer was your customer, how many customers would you have?

If your customers buy $30,000 industrial drills, you’d better know how many companies use a tool like that, how many each of those companies would typically need, and how many companies still need that kind of drill. You’d also better know who in China is making a knockoff to clone the one they bought from Samsung, who already knocked it off.

Renewals matter

The other troubling question affects some businesses and not others. That is, “What’s your renewal rate?” In other words, for a service you sell on a recurring basis (or a product that requires “refills”), what percentage of your customers buy their next purchase from you?

Lots of people know. Lots of people don’t. As you might imagine, I think you should know.

Imagine that you run a company that makes $200,000 a year. You’re in a recurring sale business model where your product or service requires “refilling” on a regular basis.

So, you want to have a conversation about growth. If you want to get to $600,000 by the end of 2025, a major impact item on getting to that number is “How many people want / need what you sell?”. The other is how many customers can you keep of the ones you get. Of course, we need to determine if your market will support that number, but there are always ways to deal with that – market expansion, reaching beyond the edges, looking for markets whose needs mimic your market’s needs, and many more.

It goes deeper than knowing the numbers. You need to know why they renew. Why they don’t. Growth depends on renewals in these businesses.

Are you part of the 92%?

Customer service is a good example of an area that can transform renewal rate. Most of us are in an alternate reality zone about how much our customers love us. The quote below speaks directly to that, even though customer service is only one place that causes you to lose renewals.

According to research by Bain & Company, when asked, 80 percent of companies say they deliver “superior” customer service.

The customers’ perception of the service level was very different.

Only 8 percent of customers felt the companies delivered “superior” customer service. – Joey Coleman, Never Lose A Customer Again

What do your customers think?

When leaving you is easy

Your highest chance of losing a customer is in the early going. The first 30, 60, 90 days.

Early on, they get their first exposure to your product, service, support, billing department, documentation, deployment team and so on. They haven’t yet developed a commitment to you. Your products & services haven’t become an integral part of what they do. As such, the friction to replace / discard your stuff is low.

At this point, the decision has low political cost, despite the embarrassment / reputation loss someone will take for approving the purchase. However, if their entire company is being on-boarded like they’ve never experienced before, the political cost increases substantially.

Given that knowledge, what can you do to make it incredibly easy (“frictionless”) to adopt your products / services in the first 30, 60, 90 days? What can you do in that timeframe to help new clients make your stuff such an integral part of their business that no one dares stop it?

That’s what good on-boarding does. It starts working on your renewal rate on day one, when most others think “sold = done”.

Most companies aren’t good at this.

There’s so much headroom available above the average that you have lots of room to play with. Competitors tend to not be exposed to these changes. Even if they find out about them, they frequently think they’re little more than frills and puffery.

Just what you want.

Categories
customer retention Customer service Getting new customers Small Business

Reviewed your public internet access lately?

Last week, I was in Chicago for a seminar. As you might imagine, public internet access is important to business travelers. My hotel had internet, but browsers and Outlook both objected when I attempted to connect to any secure site or resource. When I switched to the wifi hotspot on my phone, those issues disappeared. When I reached wifi at other locations, those issues didn’t reappear.

Verdict: hotel internet was misconfigured, broken, hacked, or some combination thereof.

Reporting the problem

I reported the problem Monday afternoon to the front desk and to the hotel’s customer service account on Twitter. By the time I checked out early Friday morning, the problem still existed. It took their corporate Twitter people 28 hours to respond, despite the fact that they’re a substantial global hotel chain – or perhaps, because they are.

I noted to the Twitter reps that I didn’t expect the front desk to be network experts, thus I was reporting it to them so they could get the hotel property some corporate-level network help. This didn’t happen – at least not yet.

Their response was to contact the hotel manager. Based on his post-checkout email to me, he had no idea what I was talking about. As previously noted, I didn’t expect him to. Even better, they accidentally forwarded me the internal corporate support team email with the case number and all the contacts, all while leaving this hotel manager hanging out in the breeze to figure it out on his own.

So how does this affect you?

Public internet access quality matters

I don’t want to turn this into a geeky network security post. I mention it because there’s a lot at potential risk when networks offering public internet access have problems like this.

When your customers connect to a secure site from your wifi & that network is misconfigured, it may simply prevent use of the network. If your business is frequented by business customers, fix this quickly as you don’t want them to leave and decide never to return.

You may not think this is a big deal, but business customers do – especially if they’re on the road a good bit. Don’t think of them as one person who “isn’t even a local“. Think of them as all business travelers (or tourists) as a whole. There are sites and mobile apps out there that guide people to businesses with good internet. If your internet is bad and your coffee and croissants are awesome, many of these folks will go elsewhere.

If a regular traveler finds a spot to settle in for an hour or two of work and that spot is dependable, they’ll never forget it and they’ll return every time they’re in town. BJ’s Coffee in Forest Grove, OR comes to mind immediately for me.

If your network is hacked, the risks go well beyond repelling customers. Worst case, the bad guys can “see” your network traffic and send it to a place where they can store and review it. If they have what appeared to be in place at the hotel I visited, they can gather logins, passwords, credit card and other account numbers and so on.

While it’s not a good idea to use the same network that you offer to your customers, if you do so & it’s hacked like this, info on the cards you run could be at risk, even if you passed PCI-DSS certification a few months ago. To be sure, this depends on the hack, your network config & other things. The details aren’t the point.

The risk these situations expose you to …. that’s the point.

Add “network health” to your regular checkups

On a regular basis, you probably check in with your lawyer, doctor, CPA, and a couple of other advisors. You do this to reduce / avoid risk, maintain good health (physical and/or financial) and keep yourself out of trouble.

I suggest adding “network people” to that list.

Ask them to help you lock your network down without making it impossible / annoying to use (there is a balance to be had). Ask them to show you what to check and how to detect when something is “not right” so that you know when to call them for expert help. This landscape changes often. Your network and the equipment, customers and data that touch it are assets. They need protection too.

Photo by Giuseppe Milo (www.pixael.com)

Categories
customer retention Employees Habits Small Business

What’s a lifelong career lesson you depend on?

I graduated from college with a BS in Computer Science back in 1982. The timing was unfortunate. Interest rates had gone through the roof, cratering hiring, so the tried and true 1980s “every programmer graduate can find a job at an airline or oil company” situation was gone. My school’s BSCS was a very new program and really was more like a general engineering degree (lots of calculus, plus diff-e and more math, several physics courses, etc) with some programming courses tacked on. There wasn’t much resemblance to what most would consider a classic BSCS curriculum, but it didn’t matter too much back then.

My first job after college was at Ross Perot‘s Electronic Data Systems (EDS). Skipping forward several months, I came out of their training program, which everyone went through regardless of their degree. Didn’t matter if you had a CS degree or a history degree, you went. After training, my first mentor was a guy named Randall.

My first serious career lesson

Randall was few years older and had become a rising star in that area of the company. He was easy to look up to. He was smart, a bit of a jokester and someone people came to when they needed solutions to tough challenges. You could see what that meant to him and others. Unlike some in the tech space, he was happy to teach and provide access to resources to experiment with and learn from.

35 years later my strongest memory of Randall is a conversation that had a massive impact on my business life. It became a lifelong career lesson.

One day when I was tinkering around with something that probably had nothing to do with my job at the time (like an IBM mainframe virtual machine), he stared me down and said (paraphrased) “If you want to go places and move ahead (in this company), always be willing to take on new things even if you know nothing about them, then do whatever it takes to learn what’s needed.

It was years before I realized that his advice had become a consistent theme across that all the work situations I’ve been in since that time. It’d repeatedly been a door-opening differentiator. Thanks Randall, your advice that day was the most valuable thing a boss / co-worker / peer ever gave me.

What about “Business is Personal”?

I didn’t say there could only be one lifelong career lesson. “Business is Personal” is a business foundation, while Randall’s advice became a personal mindset & perspective.

The seeds of “Business is Personal” grew out of watching my photographer clients about 20 years ago. The level of personal touch that these folks maintained in their business was something much different than I’d ever seen. They thought about their relationship with their clients very deeply and used it to not only improve sales, but to create clients who stuck with them through each of the seasons of life.

In true “when the student is ready, the teacher will appear” fashion, my business life turned a corner thanks to these folks. I suddenly saw every business through a different lens.

As an employer and business owner, “Business is Personal” took on a litany of nuances, year after year. It became the foundation of my consulting and writing because it has a broad application and touches so many parts of the business. It not only became a foundation for running a business, but it’s also a filter for businesses that I’ll do business with.

Ripples

Some non-traditional (for me) work eventually exposed “Business is Personal” as a nuanced connection between businesses, their employees, and the local community. Acquiring, caring for and retaining clients stabilized and helped grow those businesses and make them more resilient.

That stability ripples across families, schools, and quality of life in a community, impacting job creation and retention, crime, local funding, tourism, etc. Yes, it’s Economics 101.

That said, when explaining the “obligation” to get better at sales, customer service and marketing to a business owner as a means of impacting quality of life in their community, rather than “just a way to make more” – the big picture jumps out at them.

I’m curious what your core career lessons are. Have you thought about it? Have you thanked those who first instilled them in you?

Categories
customer retention Customer service Small Business

Unmet needs

A small group I belong to was recently asked by a member of the group to identify some “unmet needs”. The context was “any business” and his question related to a course on self-reliance that he and his wife are participating in. This friend and another in the group are in the fitness and weight loss industry.

My suggestion for him was the lack of effort most gyms make to get (and keep) members engaged and training at their gym. Most gyms scan a barcode membership card or have some sort of sign in process.

Despite this, if you don’t show up on the normal days you’ve showed up in the past, you’ll hear nothing from them. If you don’t show up for two weeks, you’ll hear nothing from them. If you don’t show up for three months, you’ll hear nothing from them. As long as you keep paying the bill, that is. So that was an example of an unmet need for his course.

To be sure, self-motivation is a lot of this, but a short text or email to say “Hey, are you still alive? We haven’t seen you in three months” might be the kick in the tail feathers that they need. Or maybe life has been hectic and they need a little push to get back in the habit. Regardless of the reason, none of this happens in most gyms.

So that prompted more thought on the subject, which is why we’re discussing unmet needs today. There are at least three kinds of unmet needs:

  • Those you know of and haven’t satisfied
  • Those you know of and refuse to address
  • Those you don’t know about

Unmet needs that you know of and don’t satisfy

Using the context of the gym, what does your gym to do set itself apart from the others? Does it miss you when you don’t show up for an unusually long time? If you’re a persistent daily user, does it miss you when you miss a single day?

These kinds of things don’t pertain solely to a gym. Does your oil change place miss you when you stop going there, or when you’re a month later than usual? Do they even notice? What about your dentist? Your dry cleaners? Your beer store?

These things aren’t limited to retail. They’re only limited by how much attention you’re paying to your customers. Are they “suddenly” spending twice as much or half as much as they have for the last five years? There’s a reason. Maybe it affects you, maybe it doesn’t.

Unmet needs hide in places like this.

Unmet needs that you refuse to address

Refusing to address certain needs is OK. Even when the need is there and legitimate, there may be any number of reasons why you’d want to avoid it. Maybe it’s none of your business, even though it’s in context with the products and services you provide to your clientele. Maybe this need is too costly to meet. Meeting it might require invading the privacy or “personal space” of your customers. Perhaps meeting this need might even annoy your customers, despite the fact that they know they need it.

Give yourself the latitude to say no, even if you’d rather say yes (to the income).

The ones you don’t know about

This one always reminds me of the famous Rumsfeld quote about unknown unknowns. In other words, there are things we don’t know that we don’t know about. Have you ever heard of the citric acid cycle? It’s also called the Krebs cycle. I suspect that for most people, it’s an unknown unknown. IE: It’s something we weren’t aware of the existence of, plus we don’t know anything about it now that we’ve been told it exists.

These are the things your customers will tell you if you listen closely. But… don’t wait until they tell you. Ask them. “Is there anything that we aren’t doing for you that you wish we would take care of?” Notice that I didn’t say “Is there anything we can sell you that you don’t already buy from us?” That’s a different question. It’s about you, mostly.

“Is there anything that we aren’t doing for you that you wish we would take care of?” is about them and their unmet needs – and probably unspoken ones at that. Ask questions that make it about them.

Photo by Joris_Louwes

Categories
customer retention Getting new customers Setting Expectations Small Business

What would they do to put you out of business?

When I asked “What would they do to put you out of business?“, you probably wondered who “they” are. “They” might be someone whose expertise in another market tells them yours is ripe for the taking. “They” might be a competitor you already have, or someone new to the market who doesn’t know any better. Remember when you didn’t know any better? You’re still here.

Who they are really doesn’t matter. What they do & why… that’s what matters. How would they price, market, sell, deliver, service, & communicate?

Pricing

You might expect that they’d come in with lower pricing. While it depends a good deal on your market, I wouldn’t be surprised to find them going higher and establishing a market segment above yours, leaving you with what remains.

The bitterness of poor quality remains long after the sweetness of low price is forgotten.” – Ben Franklin

Companies with plenty of margin can afford to spend more on marketing, delivery and service. If you were starting over today, would you price the same way, or differently? Why? Why not?

Marketing

Ultimately, marketing is about exchanging cash for a (hopefully predictable  and consistent) number of leads who turn into customers. If your marketing efforts spend $27.50 to get a lead, would you rather your leads turn into customers who spend $2750 or $27500 over their lifetime as your customer?

Thinking back to what you do now, can you make that choice? Can a new entrant to your market? (and if so, again… can you make that choice?)

Looking at it a different way…. If your new competitor can afford to pay two or three or ten times what you can afford for leads, who will likely end up with more leads and more ability to choose select the best leads?

If you were starting over, how would you market differently? Would you choose a different customer to focus on?

Selling

Thinking about how you and your market peers sell now, how would an upstart in your market do it differently… and better? What steps would they add, subtract, or embellish? Would they listen more and talk less? Would they speak of the needs, wants, concerns and worries of their prospects? Would they parrot features and speak in bullet points, while lamenting about the need to meet their quota?

If you were starting over, would you sell differently? How so? If not, why not?

Delivery

Do you deliver and/or deploy for your customers today? What would a noob to your market do? Would they prepare differently? Tool up differently? Deploy differently? Train the customer’s team differently, more, or less? Would they follow up more or differently than they do now after delivery and deployment is complete? What would someone do differently than you if they come from a high attention to details market?

If you were starting over, how would delivery and deployment look?

Service

Almost everyone brags about their service. It’s rarely as good, unique or unusual as they think. People talk about under-commit and over-deliver, but finding it in the wild is rare. Your service rarely feels like you’d want it to feel if you were in that client’s situation.

If you were starting over, how would your client’s service experience look and feel?

Communication

Through every step of sales, marketing, delivery and service, there are opportunities to set expectations and over-communicate. There are opportunities every day to take away the doubt, lack of clarity, wonder about what’s going to happen next. There are opportunities to pick up the phone instead of sending an email, or to drop by instead of picking up the phone.

If you were starting over, how would you communicate?

What would “they” do?

They’d do what you refuse to do. What you’re afraid to do or haven’t thought of. They’ll do what you don’t feel like doing or don’t think is necessary. They’d do what turns customers into clients who wouldn’t dream of going anywhere else.

More than likely, you know what these things are. Knowing isn’t enough. Answers are easy to come by. Execution of it is another thing entirely.

Will you wait until the new kid on the block forces you to mimic their behavior, or will your behavior set the bar so high that no one will dare enter your market? All those things you’d do if you were starting over can be started when you decide to do them.

The choice is yours.

Photo by MDGovpics

Categories
customer retention Employee Training Leadership Management

Discarding clients & the math of job security

How often are you discarding clients? When fussy, needy, and/or high-maintenance clients complain repeatedly, there’s significant temptation to simply toss them out with the garbage. Some business owners build “filters” into their marketing designed to repel such clients.

When an existing client provokes thoughts of “Life’s too short to deal with this“, who fires them? How is the decision reached? Is the process documented? How is the decision communicated to the client and to your team?

Hammers, nails & curmudgeons

I asked some friends how they describe people they’d fire as clients. Their responses included unreasonable, unrealistic, frustrated, afraid, disgruntled, troublesome, pedantic, rebarbative, cranky pants, curmudgeon, etc.

Are you teaching your team that getting rid of imperfect clients is the only acceptable solution? Owners know there are situations that don’t merit dropping a client. Owners discard clients based on their experience. Does your team have that experience to back up their decisions? Take care that your team doesn’t use this tactic like a hammer while seeing every complaining customer as a nail.

It’s essential to be careful using “You’re fired!” as too-frequent use can damage your reputation. Businesses learn to detect bad apples and few are surprised when these clients get fired. Taken too far, your business can get a reputation for arrogance. People will think you discard clients the first time there’s an objection or even a question. You don’t want your reputation to be “At the first hint of a problem or even a question, they tell people to leave and not come back.” Some prospects will hear that and decide not to show up.

The math of discarding clients

Discarding clients sometimes feels as easy as pulling a splinter. The pain and aggravation fades quickly, making you wonder why you ever tolerated them. Even so, every choice to discard a client impacts your bottom line. While getting rid of high-maintenance “time vampires” will probably improve your bottom line, you have to be careful not to let your team believe that’s the only solution available. That’s where the math kicks in.

If your team gets rid of one customer a month, what does that mean to your bottom line? You likely know the typical customer’s lifetime customer value (LCV). Owners usually know how often the typical customer buys from them. They also typically know how much customers spend on average per transaction. Combined with the rate at which you are adding new customers, you can determine what an improper “firing” costs you and how long it takes to recover from it.

Uninformed profitability math

Employees don’t usually know the financial impact of discarding clients. When you explain the financials of your business to your team, it helps them understand why you think the way you do. Tools like “The Great Game of Business” (start with the book) help employees understand how the business works financially (free resources) vs. how they think it works.

Learning how the business works from a financial perspective encourages employees think more like owners. It can alter “I’m working my tail off for $15 an hour while the owner gets rich.” to something closer to reality. Even if the owner IS getting rich due in part to the risks they took & the investments they made, “uninformed profitability math” isn’t healthy. This “uninformed profitability math” rarely create behaviors that are positive for the business.

Many employees have never had the opportunity to see how their work (and how they work) impacts company financials. Meanwhile, business owners regularly complain how their people don’t think like owners. Part of that thought process is understanding the financial impact of events that occur in the business each day. Knowing that what your work does for the bottom line carries substantial value.

A “We’re having a good (or bad) month” message to employees is rarely accompanied by data explaining why. Understanding what good and bad month means affects the security a team member feels about their job. This impacts their confidence in their ability to provide for their family – and certainly affects job performance and attitude.

What does “we’re having a good/bad month” mean at your business? What message does it send to your team?

Photo by Shinichi Haramizu

Categories
customer retention Lead generation Management

Is it better to keep a customer or replace them?

“$29 per month… NEW CUSTOMERS ONLY!” Most of us have seen something like this and thought less than pleasant things about a vendor who hangs these new customer offers out in public where existing customers can see them. That bargain basement deal that’s not available to existing customers doesn’t make you feel good about your decade-long relationship with that business. The loyal customers who have stuck through good times and bad with that vendor – including their mistakes (which we all make).

The thought?

“Where’s my screaming deal?”

It isn’t that these deals are inherently bad. The mistake is putting them out there in front of everyone – including your current customers. If you can find a way to avoid showing the “loss leader for new customers only” offer to existing customers – avoid it. In some media, you can’t avoid it – so don’t use that kind of offer there. It ticks off your loyal customers. Every. Single. Time. Your customer service team gets to take flak about this each time you run these promotions.

Meanwhile, a lack of communication to existing customers plants the thought in customers’ minds that their vendors take them for granted. We know you’re thinking of us when you outsource customer service to Jupiter to save $1.29 per hour, or when you discuss how to shrink receivables. What sort of effort do you invest to retain existing customers?

If you have convinced your customers that you aren’t thinking about them & that you’re more concerned about getting new customers – why should they feel differently about you? You’re advertising for new clients everywhere. While those ads are out there chasing down more new customers to fill the leaky customer bucket, are your long-time loyal customers (and the rest of your customers) being ignored?

All the single ladies

Look at it this way: If you’re someone’s steady “significant other” and they are constantly out chasing down new “others”, most of you wouldn’t take that so well.

Why should your customers feel any different when they aren’t being wooed, cared for, thanked, communicated with, or given any special attention? They only seem to get attention when they call to report (or complain) about a service, delivery, or product failure. Once the initial sale is concluded, is the only time you connect with your clients when they contact you, or something has broken or otherwise gone wrong?

“That’s what everyone else does.”

You might be thinking “That’s what everyone else does. Why should I behave differently?

You are, or have been, a customer of car dealers, cable companies, dry cleaners, restaurants, various repair shops, handyman services, plumbers, sewage tank pumpers, electricians, hair salons, clothing stores, hardware stores, quick lube shops, etc. Almost all of them are advertising for new customers this week. How many of them are ALSO communicating with you to keep you, to bring you back, to make you feel good about being a customer, and/or encourage you to refer them to someone you respect and/or care about?

Very few.

They’ll likely continue appearing to take you for granted for weeks, months, or years – all while chasing new customers, all while grumbling about churn as they slowly lose customers to someone else’s $29 new customer offer. Don’t be that business.

Doing only one of these (looking for new, caring for existing) is not sustainable. Yes, I know it’s more work to do both. Most places need to get new customers, but most of those same places spend a lot more money & effort to get a new customer than they do to keep and care for an existing customer. Doing both means making an effort to protect the asset you paid for – yes, customers are an asset. Perhaps not in accounting terms, but in the real world where customers don’t grow on trees, we’d all rather have more long-time customers and others begging to do business with us.

Don’t spend $12 to get a customer this month, only to ignore them hereafter and hope they stick around, and then go spend $12 to get another one. That assumes you know how much it costs to get a customer (and it’s always more than you think).

Recycling customers is expensive.

Take better care of your existing clientele. Well cared for clients tend to buy more, buy more often, & for a longer period of time. They refer their friends & colleagues because they finally found someone who gets it. Be that someone.

Photo by martin.mutch

Categories
customer retention Management

Where is the friction in your business?

What do you repeatedly force your clients to do that they simply shouldn’t have to do? Put another way, how does your business frustrate your clients? When dealing with your business, what drives them crazy?

What’s friction?

Can’t open the package without a Jedi sword? Can’t read your boarding pass printed in that microscopic font? Have to do this and this and this and that to buy or pickup a purchase, only to have to start over again? Can’t find out when something will be delivered? Have an appointment window that stretches from sunrise to sundown? Press one because your call is important to us and will be answered by the next available agent?

Yes, those kinds of things. They aren’t the sole domain of the cable company or that big company that’s easy to despise. Small businesses do these things as well, so we have to be vigilant and chase these things out of the building.

Sometimes these things are simple and inexpensive to fix, yet failing to address them creates a point of aggravation between you and your customers. These points of aggravation are often the tiniest of things. Like a grain of sand in your shoe, they could be the start of something much worse if allowed to fester.

Should it fester, you may lose a customer. Losing even one customer to one of these little things will transform that friction-creating “little thing” from inexpensive to very expensive. Remember, losing a customer usually isn’t losing a single sale – it’s losing all future sales from that customer. Friction is expensive.

How do I find these aggravating things?

Ask.

But what to ask? No matter who you’re talking to, poke around in their experiences with you regarding installation, deployment, service, customization, billing, paperwork, repairs, upgrades, financing, returns, shipping, etc. Ask questions about these things using different terms. Repeat yourself until you get the details you need. Using different terms in your questions will provoke different reactions and prod different memories from your customers.

Ask your best customers.

They’re the ones you’d hate to lose. The ones you know by name when they walk in the door. The ones whose names are familiar to your bookkeeper – and not because they don’t pay their bills. They’ll tell you different things than your newest customers, but that’s OK. There isn’t one frustration that fits everyone. Your business has many components. If you sell a number of products and services, you’ll need to ask the best customers of each. You’ll likely get different answers for each product and service.

Ask your newest customers.

Because everything is new, they’re quite likely to be more sensitive to oddities and more observant about every little thing your company does. Listen carefully to these folks. They may mention things that you’re vested in. You might get defensive. Fight that urge. There may be a perfectly valid reason for doing whatever it is. Brainstorm with the customer how you could accomplish this result in some other way.

Ask lost customers.

Did you lose a customer to another vendor? Give them a call, or see if they’ll set a time to visit in person. Make sure they understand that you aren’t there to sell them, but instead, you want to know what went wrong. What could you have done better? How did you frustrate or annoy them? This lost customer probably isn’t alone. Follow up with them once you’ve addressed the things they mentioned. A handwritten card thanking them and briefly describing what you’ve done to correct these things will both thank them and tempt them.

Preventing the growth of friction

Bear in mind that these things aren’t often created intentionally. Most of the time, “they just happen” and we miss them long enough that they become systemic. Once they become systemic, they seem normal and we have to battle a little harder to identify and evict them from how we do things.

Create a culture of ownership for finding and fixing these things. When your team has the permission to fix these things on the spot and bring the situation to your next process improvement discussion (ie: lunch), fixes don’t have to wait. Set boundaries as needed, but be careful to encourage improvement without waiting for seven signatures and a wax seal.

Photo by theilr

Categories
Advertising customer retention Lead generation Marketing

Personas – Like building Mr. Potato Head

The process of analyzing & building customer personas is not too much different from the process of selecting & placing body parts while creating your newest version of Mr. Potato Head. You must identify each persona, then build it out by figuring out what “parts” make each one unique. Of course, there will be aspects of some personas that are shared.

Who are your personas?

The first step to working on your personas is to identify them. For me, a mental walk-through of the business processes of a business tends to produce a fairly complete list.

Once I’ve worked through that process, I’ll assign them role-based names (such as junior astronaut, senior astronaut, or launch manager). Next, I’ll discuss the roles with someone intimate to dealing with the clientele in question. Sometimes you can talk to one person and get a good assessment of your persona list.

Discuss your persona list with front office / sales people, service / field techs / deployment teams, admins and managers at each level. When creating a list of personas, don’t assume that you know them all simply because you run the place.

Getting feedback from staffers who talk to / email with these folks on a daily basis is critical to proper identification of each persona. Your front line people in each area work with these folks every day. Their familiarity will help you accurately describe, critique, and reflect on the qualities / properties of the personas you’ve built. Multiple viewpoints across your staff will fine tune the mental sculpture of them that you’re creating.

Putting the lips on each persona

Selecting the lips to stick onto your Mr. Potato Head is fairly simple. The work to break down the different traits, habits, wants, needs, communication requirements and other aspects of each persona your business works with isn’t.

It’ll pay off when you write emails, phone scripts, letters, forms, ads and other communications intended to optimize your interaction with each persona. Optimization is really about achieving a “message to market match”.

I should clarify the “… to market” part of this. Normally when I mention message to market match, I’m referring to the market of people who buy what you sell. From that high level perspective, your market could be “people who want to buy or sell a home“. Personas drill down on that.

When producing a list of personas from your market, we focus on market subgroups. A persona like “empty nester couples between 50 and 62 who are downsizing” is a good example – and is a good bit narrower than “people who want to buy or sell a home”.

The group of people on the list of folks who want to buy or sell a home include:

  • the aforementioned empty nesters
  • millennials
  • newlywed couples
  • 25-35 couples with kids looking for room to grow
  • single folks who want an ownership experience at a waterfront property without the need to deal with yard work
  • aging couples who want a single story place that will be suitable for keeping them out of a retirement home for 10 more years
  • vacation home buyers
  • rental real estate investors

… and so on. If real estate is your thing, you can probably add to that list without much effort.

Why are personas necessary?

You want to break your customer / prospect base down to this level of detail soso that you don’t communicate with each group using the same message. A real estate ad with a couple of 50+ aged people in the photo might not attract a couple with young kids who are looking for their first home. Likewise, the reverse could also be true. The imagery *and* the words matter. It’s tough to attract anyone when you use a message they doesn’t concern them.

When you do the work to identify what is unique to each of these personas, then you can more easily decide how to communicate with them (Instagram, Facebook ad, postcard, etc) AND what to say when you do.

Winning at this almost never looks like “I created one ad and it attracted everyone.” Creating the right conversation with the right group is more work. The reward is that conversations with better context produce better results. Further, fine tuning your message will reduce the amount of time you waste on people your business / products / services aren’t a good match for.

Finally, don’t forget to use your personas to refine messaging to existing clients.

Photo by beeep