Customer service and customer care

Estimates vary but most agree that it costs between five and six times as much to gain a new customer than to retain an existing one, so having invested so much in winning the customer, for heaven’s sake look after him!

As you win more customers you will see the 80/20 rule come into play: Often 20% of your customers provide 80% of your business. (You need to be aware of numbers as well as percentages here to ensure that your customer base is large enough and that your business remains profitable should one (or more) big customer defect to the competition or go out of business).

There can be a natural but dangerous tendency to concentrate the majority of your time and resources on keeping your key customers happy whilst ignoring the smaller ones (and not going after new ones at all). However, it takes time to develop a relationship with each customer so it may not be immediately obvious which ones have the most potential over time.

A startling potential result of this can be found in a book called “Keeping Customers For Life”, by Richard F Gershon. In it he states the reasons why companies lose customers as the following:

• 68% are upset with the treatment they received
• 14% are dissatisfied with the product or service
• 9% start to deal with the competition
• 5% seek alternatives or develop other business relationships
• 3% move away
• 1% die

Don’t you find it frightening that nearly five times as many customers go away because of the way they are treated rather than being dissatisfied with the actual product or service on offer?

You don’t necessarily need expensive software or systems to manage your customer relationships. Just give them that extra little bit of professional, polite attention and see how well you are rewarded!

Don’t forget to add your comments – or you may have a story you’d like to share that illustrates or refutes my thoughts…