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Archive for September, 2009

Is focusing on customers worth it? Just do the math.

Monday, September 28th, 2009

Sometimes it’s worth your while to take a step back and rethink what your company is spending its time and money focusing on. For most businesses, sales and marketing garner a lot of attention, and for good reason. For you to succeed, your organization must build awareness and acquire new customers.

But it seems that often the focus on acquisition pulls attention away from efforts that are usually even more important: those designed to keep the customers you already have. For instance:

Research shows that increasing customer retention by just 2 %, you can decrease your overall costs by 10%. 10%! Think what that does to your bottom line, even without the accompanying increase in customers and revenue.

Speaking of customers, if you can increase your retention by 5% – for most companies, not an unrealistic goal – the financial impact is staggering. Over five years, your customer base will have grown by over 25%, with no increase in your sales growth! Over ten years, you’ll have over 56% more customers.

So, let’s ask again: is it worth it to focus on customer retention? What do you think?

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Psst…your customers make you money

Thursday, September 17th, 2009

I’ve been in a few networking gatherings in the last week. When I hear other professionals describe their companies and talk about their issues, it’s amazing how rarely the words “customer” or “client” come out of their mouths. I hear “sales” and “marketing” and “product” and “pricing” but not “customer.”

As the late great Marshall Field said, “Your customers are your only profit center.” Yet most businesses are not set up with that as a core part of their philosophy. The businesses that do focus on the customer relationship, and build processes, product and service around it, seem to also be the companies that continue to succeed in down economies, which, last I checked, we were in right now.

Something to think about.

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Good, bad and ugly customer experience on the road

Tuesday, September 8th, 2009

Just got back from driving to the east coast to drop my son at college – Northeastern University in Boston. What a great town! We drove, with my wife and 3 kids so there were plenty of opportunities for laughs, bickering and mini-adventures.

We stopped in Cooperstown, NY, for a visit to the Baseball Hall of Fame for my 12 year-old’s birthday. I know I’m an irrational customer (of course, we all are), but my overall impression of the Hall and Cooperstown in general is a 10 our of 10. If there is a community that “gets” the concept that an experience is made up of all the little moments, it’s Cooperstown.

There are no chain hotels in the town; we stayed at the Inn of Cooperstown, a three-story 100-year old former mansion, with a long front porch that accommodated a line of rocking chairs, and a series of unique well-kept rooms (no TVs necessary). We stayed up playing Sorry and Trivial Pursuit, laughing the evening away in the game room. Then in the morning, we enjoyed a relaxed breakfast in the dining room, complete with homemade banana-nut muffins. The staff was friendly and helpful, and we could stroll down the main street to the Hall.

There, my son Griffin received special treatment since it was his birthday, with a special card, discounts, birthday buttons and a photo in the Hall Gallery in front of Babe Ruth’s plaque. Overall, it was a big warm and fuzzy.

Then, off to Boston where we stayed in a larger downtown hotel. As I was nearing our room, a member of the cleaning staff eyed me warily and said, “Oh, no. They did not already check you into this room.”
Chagrined, I said, “They did indeed.”

“Well,” she uttered, shaking her head, “it’s not clean yet. I still have to vacuum.” She then stared at me, wondering how I was going to fix the problem.

Not a big deal, but a glitch in the process that became a little “moment” in my experience. Things got better, but it reminded me of the importance to creating a full customer experience, one that keeps in mind how much it all matters. A cold word, or a warm homemade muffin, are enough to color customer perception, and determine if and when customers will come back.

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Once again, thanks, US Bank! (sarcasm)

Tuesday, September 1st, 2009

The primary reason customers defect is “employee indifference.” I have to say, that’s the reason we eventually pulled both our commercial and personal accounts from US Bank. In fact, indifference isn’t really enough. I would say it was “egregious indifference,” if that’s possible. I won’t bore you with the details. Suffice to say, I’m not a fan.

So – given that we were no longer customers – I didn’t think I’d have reason to complain about US Bank again. I was wrong.

My wife used a US Bank drive-thru ATM and, amid the typical chaos of our lives, sufferered a brain…burp and drove off without waiting for her card to be dispensed. The next day she realized the mistake and went back to US Bank to inquire about the card.

“Oh, no problem,” the employee stated. “They’ll look up your customer information and it will automatically get sent back to you.”

“That’s great,” my relieved spouse responded. “Though I’m not sure how you’d know my address, since I’m not a customer. Could I give you my address.”

“Oh,” the employee muttered, her tone darkening. “If you’re not a US Bank customer, the company that services our ATMs will just destroy it.”

“But,” my wife protested. “Could I contact the company and…”

“We don’t have their number,” the employee said, already having mentally exited the conversation.

“You don’t have the number of the company that services your ATMs?” my wife asked incredulously, but to no avail. She gave up and left.

So…thanks, US Bank! I don’t know how you do it, but way to stay consistent!

I believe you offer a “5 star promise” for customer service. All I know is that, in my experience, getting close to the 5 stars causes me to get very hot.