Prevent the Silent Client Escape Customer Dis-Service, Failure to Deliver
Feeling pretty great about how much your customers love you and your company? Well, here’s a bubble-buster: Even when customers would kill for your brand, they will walk away after a couple of bad experiences. The kicker is that in most cases, they won’t even tell you they’re unhappy. In fact, only about 4% actually complain. The rest just silently slip out your back door.
And it’s adios, marketing and sales investment. Buh-bye, life time value.
In the words of investment sage Warren Buffet: “It takes 20 years to build a reputation and five minutes to ruin it.”
I know this from a few recent personal horrors I’ll share in a bit. But before I go there, if you are lucky enough to hear from an unhappy customer, you better try your darndest to turn their grudge into a grin or face the costly consequences.
Consequence #1: Spreading Negativity Like Wildfire
Unhappy customers typically tell up to 15 friends and family members about how they were wronged. Who knows for sure how many others those people relate the tale to? And just as disturbing, if not more, one study found that an astounding 67% switch brands after a bad experience.
Disgruntled customers aren’t one bit shy about venting their displeasure in negative online reviews and social media posts, further tainting your reputation. Since nine out of 10 people read online reviews before buying, even the largest sales and marketing budgets are no match for this reputation nemesis.
Consequence #2: Cost of Churn
When a customer churns because of a failed customer experience, they switch to a competitor, or otherwise sever ties with your brand. Churn is a big deal, especially for companies who need recurring revenue to meet budget or even stay afloat.
Inextricably tied to customer lifetime value (LTV) and the cost of acquiring a new customer, higher churn rate slashes LTV and escalates sales and marketing costs. Since acquiring a new customer can cost five times more than retaining an old one, poor customer experiences force you to spend more money to outpace customers leaving.
Drumroll Please
Now for those personal victim accounts of a maligned customer I promised you.
#1: Leaving Las Vegas
While at the airport, my husband was on a business call negotiating the sale of a car in line at a casual dining restaurant. He told the person at the register that he had 10 minutes before he had to head to the gate, and asked what food could be ready the fastest. The hot dog was immediately available — so juggling food, phone and briefcase, he took a seat at the counter. Then the scene quickly went south. “You can’t sit here, because you were in the takeout line,” an employee said. “I’m leaving in five minutes,” my husband replied. Then the manager repeated the evacuation order. “If you don’t leave, we’ll call the police.”
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- Mistake: Rigid Policy
Sticking to a policy without accounting for circumstances is a recipe for failure, whether it’s a complex return policy or sales requirement. Rigid policies are typically based on historical precedent that the company has been complacent about. Absent discretion at the front line, such rigidity can harm your brand’s customer experience. - Remedy: Flexibility
Empowering the front line with the authority to make decisions that deviate from policy can avoid customer confrontations that cause negative feelings. Examine each policy’s purpose and current relevance to the best interests of your customers. Give your people permission and the autonomy to adapt the rules if needed to preserve the customer relationship.
- Mistake: Rigid Policy
#2: Gotcha
Before my husband went to pick up the car he was negotiating while at the Las Vegas airport (a full circle experience), we noticed that the purchase agreement we had Docu-signed contained an expense for an antitheft device subscription that the dealer had paid for but failed to tell us about. We called our salesperson to ask about why it hadn’t been discussed with us prior to emailing the documents and asked if the manager would be in when we would be in to pick up the car. When we arrived, we pressed the manager about this lack of communication and the feeling we were misled; after a direct and rather distasteful conversation, the manager finally removed the charge.
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- Mistake: Lack of Empathy
Customer care requires connecting with feelings. Creating a positive customer experience is all about communication—listening to and understanding your customer, the situation, and how it is making the customer feel. Research shows that 52 percent of customers stop buying from a brand due to poor communication, with 17 percent citing an insensitive engagement as the primary reason. - Remedy: Lead with Empathy
Employees follow the lead of managers who are customer-focused and empathetic. Create a culture in which listening and putting yourself in the customer’s shoes are valued.
- Mistake: Lack of Empathy
All about Emotions
As I revisited these experiences, the negative emotions surrounding them rushed back to me. And that’s the point: Making buying decisions are based 70% on emotions, not rationality.
Think back to your last rideshare ride. Do you recall how much you paid or how you felt about the driver? Think about recent restaurant experiences. If the food was great but the service was poor, would you return? If the food was good but the service was great, how likely are you to return?
Treat Your Customer Like You Mean It
There are many more examples of poor customer experiences, including shunning responsibility, blame shifting, slow- to non-responsiveness, etc. But I like ending on a high note. Every good customer experience fills the loyalty bucket. It says, “I care about you and your business.” It’s good for business. It’s good for you.
To do that, be proactive year-round even if your customer traditionally buys only during one month. Be predictive, anticipating your customers’ needs to stay ahead of trends, the economic environment, etc. When you’re standing still, you’re falling behind.
Looking for help in how to keep moving? Let’s start a conversation.
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