The Cost of Keeping a Customer

Experts estimate that we spend hundreds, if not thousands, of dollars acquiring new customers. When you think of all the money we spend on marketing, advertising, trade shows, websites, salespeople, travel expenses, and other expenses, you know these experts are right. I’ve read that one single sales visit will cost over five hundred dollars! I have also calculated that in our business, the cost of adding a single customer to our customer list can cost well over five thousand dollars! Pretty amazing, isn’t it?

I’ll tell you something else that’s even more amazing. After we spend all that money, time, effort, sweat, and tears, we lose customers by the bucketful, and we are casual about it, saying things like, “Oh well, that’s the board business.” Many companies in our industry are losing customers as quickly, if not more quickly, as they are bringing them. Why is that? I know of one shop owner who has told me that his customer list is a mile long and an inch-thick, meaning that they have no real relationship with any of their customers. Certainly, the cost of keeping a customer is far less than acquiring one in the first place. Think about it. What do you have to do to keep a customer? How much money do you have to spend to retain your customers? Do you need to spend much or any money to keep a customer? Not really. All you have to do once you have acquired a customer is service him properly. So why are we losing them so easily? The answer to that question lies in the fact that we do not, as an industry, perform very well.

Think about what it takes to keep a customer. It’s not that complicated, because all it takes to keep a customer is doing what we are supposed to be doing anyway. To keep our customers happy, we have to give them a fair quote, make it easy for them to place their orders, and build and deliver Quality boards on time. All the while being courteous, helpful, and valuable. As I said, doing what we are supposed to be doing in the first place. That’s all we have to do. No company ever lost a customer by providing them with excellent service. An argument can even be made that there is no cost to keeping a customer. The formula for keeping a customer is the very same formula for making money. Just deliver a good product on time you make money right, and the bonus is you get to keep your customers as well. So, here is the one big dark secret to customer retention. Do what you’re supposed to do, and you will keep your customers.

And here’s another idea: treat your customers like the gold that they are. Bring great service into the picture Take your service to the highest levels possible. Deliver product early if it’s a quick turn order. Always give your customers more than they asked for or expect. Constantly show them how important they are to you and your company. Show them the respect, admiration, and yes, if it need be, the adoration they need to be happy.

Make sure your people are trained in customer service. Give them some leeway when dealing with their customers. Some smart-thinking companies give their customer service people a certain monetary allowance for giving customers refunds at their discretion when they feel that the situation warrants it. And the more thing your customer service team should be trained to do is always err on the customer's side.

And finally, here is a great way to keep customers, and that is to have a problem; that’s right, there is no better time to demonstrate great customer service than when you have a problem. Certainly, no customer is going to be happy that there is a problem with your product. But, the way you handle that problem, the way you treat your customer while having that problem, and the way you solve that problem, can make you legendary in the end. People love telling great customer service stories like the true story of the Nordstrom’s store that took back a set of snow tires, even though they did not sell snow tires. Or, the one about the Saturn dealer who personally delivered a new front seat to a customer…in Alaska, and he came from Tennessee! See what I mean? These stories took place over twenty years ago, and we are still talking about them!

I have worked with many companies, and the best customer relationships I’ve seen were forged in the adversity of having a problem in the initial stages of their relationship with those customers; here’s why: when people have to call to complain about something, they brace themselves for the worst. They expect at least rude behavior is not an out and our fight. They just know that it will be a terrible experience. So, when the person designated to handle that problem is polite and helpful and, most importantly, will go to any lengths to solve the problem, the customer is not only pleasantly surprised. She is over the moon with delight. In fact, she is so pleased that she will run out and tell everyone she knows about the great customer experience she received from your company. And you can bet your bottom dollar she will remain your customer for life.

It’s only common sense.