Author: Tim Luscombe

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What are the best ways to keep your customers?

It’s much easier to sell to an existing customer than it is to a new one, but many businesses don’t have a formal program to retain their customers.

When you measure all the effort that goes into winning a new customer, all the money and management time you spend acquiring those new customers, compare that to the amount of time, money and effort you devote to keeping your existing customers.

If there is no formal program or incentive, or if you are not measuring your customer retention, the chances are that no one is focused on it. What’s measured is managed.

If you compare that to the pay TV industry, businesses like Sky have separate departments devoted to customer retention. They don’t call them that – it would be a bit too obvious – but if you want to negotiate your contract and reduce your fees, tell Sky you are thinking of leaving and you will probably end up talking to the disconnection team. They have the authority to offer you special deals to keep your business!

Giving an existing customer a special deal is a great way of hanging on to them, but the special deal doesn’t have to be money!

You might offer early access to a new product or service (that’s a great way of testing something new as well, by the way) or perhaps you’ll invite them to join your dedicated knowledge area, where they can learn more about your business.

If you can foster a sense of community among your customers, that will help. People love to belong to a club.

Probably the most important part of keeping customers is communication. If you don’t keep your customer informed, you are saying that you don’t care about them. If all you do is transact with them, they will never be a fan or an advocate for your business.

Whatever else you do, communicate!

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It can be lonely at the top

The more responsibility you have in whatever field, the fewer people you can share with.

If you are leading a business, the people in that business look to you for advice and guidance. You are supposed to have the answers – because if you haven’t got them, who has?

In the workplace, you are bound up with all the emotion that comes with leading a team.

You’ll be feeling responsible for the team, and for the business.

That can make your position a lonely place. You can’t talk about your problems to your colleagues, your customers, your suppliers or your service providers – all the people you come into contact with on a daily basis. Some business leaders are lucky enough to have an understanding partner, who will at least listen!

There are two strategies to deploy to help you avoid the worst effects of this trap.

Firstly, surround yourself with trusted advisors. These are people you must be able to trust and discuss issues with, and who can bring dispassionate objectivity to bear on your problems. They could be independent business advisors (I know one of them!) or perhaps other business leaders who operate in a different sector. There are many peer groups to facilitate such support.

Secondly, be more open with your colleagues at work. There’s nothing wrong with being human, and indeed if you are more open you will build stronger relationships with the people around you. The stronger those relationships, the greater the trust and honesty will be and the easier you will find things.

There will always be those areas where you cannot discuss the issues, but they are probably far fewer than you think they are. Just make sure you are not spreading loads of FUD (Fear, Uncertainty and Doubt)

Business Leaders are people too!

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Pick the right moment

A great challenge in business is to do things at the right time whereas doing the right thing at the wrong time can easily lead to failure.

This is clearly apparent in sales, where asking for the business at the wrong moment can damage the emergent relationship. You are seen as pushy and / or desperate!

It is less obvious but no less true in other areas. Perhaps there is a project that will add to the short-term workload of a department. Launching the project in the department’s busy period may not be the best idea! The blowback from such a decision might include the conclusion that you don’t know what is going on and are out of touch – or worse, that you knew and didn’t care.

Timing plays a big part in negotiation when you are busying as well as selling. If you can pick the right moment to ask for the extras, you will find the vendor more receptive. The chances are that if you wait until the day before you are due to take delivery you will get short shrift.

The best time to buy a new car is when the dealer hasn’t quite reached their target and is running out of time – at the end of the month, quarter or year.

The best time to ask for a testimonial is when the buyer is ecstatic with you and your service. Capture it on video, in the heat of the moment, for maximum effectiveness.

So the things that are on your urgent to-do list may have to wait for the appropriate moment, but don’t let that become an opportunity for procrastination.

There are two relevant sayings

“one who hesitates is lost”

adapted from Joseph Addison’s 1712 play Cato

and

“fools rush in where angels fear to tread”

Alexander Pope “An Essay on Criticism”

Somewhere between the two is the sweet spot. Think about your timing and be patient!

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Breaking down the silo walls

Many businesses are structured into departments which have objectives and targets. There’s a common failure when cross-departmental links are not as strong as they could be, and instead departmental managers and their teams focus on their individual objectives and neglect the greater good of the organisation as a whole.

There’s an extreme example in my own career history. Many years ago my appointment as Managing Director of a division was announced and shortly after the announcement a colleague who was the MD of a different division rang me. Steve congratulated me, and then said “let battle commence” I was somewhat shocked – after all, we both worked for the same parent company. I’d have expected the friendly rivalry to see who could get the best scorecard for the year, but not an all-out battle!

Steve didn’t stay in his role very long, but when you looked at the measurement used to assess his (and my) performance, there was nothing to encourage mutual cooperation.

This approach is often known as operating in silos. Everything is contained within the silo, nothing in the outside world impacts on the silo.

What you actually need is cross-departmental functionality, and one methodology to break down any barriers is to have teams comprised of members from different departments with a cross-business remit. The team is responsible for something that affects everyone – perhaps organising a social event, or looking after the canteen, or making some minor improvements to the working environment. They’ll need a budget, and be empowered to get on and make changes.

You can help prevent the barriers coming into existence if you are careful with departmental objectives but also by reminding managers that they have internal customers, and if you don’t meet the needs of the internal customer the business won’t meet the needs of its external customers.

Finally, if you have an area of friction between two departments it can help if there is a “bridge” position between the two – someone employed to carry out duties that straddle both. That position has reporting lines to the two departmental managers in what is known as a matrix structure.

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What’s your key strength?

There’s a fascinating case of a business transformation, following and adapting to changing market conditions, in the history of Whitbread.

I grew up knowing Whitbread as a traditional brewer and pub operator, back in the days when almost every street had a local public house. The company had been in brewing since 1742.

That business model was one of vertical integration. The company made its own products – in this case, beer – and then sold them through its own outlets – the pubs. The great benefit of such a model is that all the margin from the end user sale right back to the manufacture flows to the business.

Whitbread were faced with intense competition in the brewing market and decided to sell that part of the business. The market forces that drove the sale of the brewing business left in question the operation of the pubs and they too were sold a couple of years later.

At that point, Whitbread recognised their strength was in the hospitality industry. It wasn’t really anything to do with beer!

They’ve leveraged that strength with two brands that you will know today in Costa Coffee and Premier Inn (the name of the latter is undoubtedly a nod to the history of its owner) and the business is going from strength to strength.

Both Costa and Premier were businesses acquired as part of the transformation strategy, but the key word is strategy. The acquired businesses were elements of the overall plan, tools to enable the company to deliver the hospitality services it had identified as a key strength.

In a different world, St Ives Press was a very successful commercial printing business that invested in new print technology. The business moved into publishing services and acquired a book printing company. The key acquisitions were direct response printing companies – producing flyers and direct mail pieces. St Ives is now a digital marketing services company – oh, and they still do print things!

St Ives recognised that they were in the communications business, and specifically in helping their customers communicate their messages.

What’s your key strength? What is it that you do for your customers?

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Put your problems in context

It is really easy to become very concerned with a problem that in the end is just a little problem.

You uncover the issue, and it nags at you. There’s a voice inside your head crying “fix me” and you find it difficult to focus on other things and get things done.

My son has been living and working in Tanzania for a few years now. He’s Head of Physics in a private school and it is a very different world to the one we know. There is very limited internet, restricted water supply during the dry season and frequent power cuts. On the more positive front, he is on the doorstep of some of the most famous safari parks in the world and occasionally has monkeys in the garden!

One phrase that has come from his experience is “first world problem” which is used as a response to a complaint about something minor. We might say “there’s nothing worth watching on TV tonight” and the response would be “first world problem. You have a TV, power supply….!”

So does the problem you are obsessed with really matter?

Is the coffee machine broken? Perhaps the printer is not working as it should be.
There’s a problem with the sandwiches? (That was always my favourite. A business I ran provided subsidized lunches. They were the subject of so many complaints it was almost a relief to get rid of the perk when we had to save some money)

Is it affecting your customers?

If the answer is no, that makes it a bit like a “first world problem.” It might be an irritation, perhaps it is hampering your efficiency but in the end, you are working around it and the customer never knows.

If the answer is yes, then you are right to obsess over it and get it fixed. It affects your customer – so it really matters.

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How do you talk to your customers and prospects?

Not that long ago we were all getting lots of promotional material through the post – junk mail. Now, we get lots of promotional emails – so many in fact that Google have introduced a filter in their email system so they are pre-sorted into a folder labelled promotions.

Guess how many of those you would actually read?

We are told we have to use social media to promote our businesses, but the variety of platforms is amazing. It’s not just Facebook, LinkedIn and Twitter but Google plus, Instagram, You Tube, Xing….I could go on and on.

Some marketing gurus are advocating a return to physical mail to stand out from the crowd.

Often, you’ll see a “chat” system available on a website. Click here to “chat” to us and you can exchange a series of messages with an operator.

You might also consider mobile messaging. I know some of my contacts prefer a text message to any other form of communication!

Finally, or course, there is the other use of a telephone – to actually make calls!

The questions should not be “Which method do I choose?” but rather “Which method does my customer / prospect choose?”

There is no point sending emails to someone who doesn’t read or respond to them. You may have a wonderful Facebook presence, but if your target audience doesn’t use Facebook, so what?

If your customer prefers to communicate using a text message, that’s what you do.

If they’d rather talk to someone, pick up the phone.

Make sure you have enough capacity to provide a prompt service. No one will be impressed by a long wait for an operator – either on the telephone or on the web, and unanswered messages on social media will just do more harm than good.

Whatever channel your customer chooses, that is where you go.

 

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Actions have consequences

 

“What’s the use you learning to do right when it’s troublesome to do right and ain’t no trouble to do wrong, and the wages is just the same?” Mark Twain, the Adventures of Huckleberry Finn

We all want to do the right thing, but from time to time the temptation is there to take a shortcut, because we are feeling under pressure., or because it is just easier.

Perhaps it is the quality department, who are being pressured to get stuff out to the customer. They can do it if they take a short cut and inspect fewer widgets – it is just this time, and it won’t matter.

Perhaps it is that proposal you are writing – it is easier just to cut and paste some content than do the hard work of creating the original content.

Maybe it is in sales, when the customer asks “Can I have it by this date?”

Or is it in customer support, where the documentation from the last version will do just fine.

The trouble is that shortcuts have a nasty way of coming back to bite you.

The extra inspection might have found the problem, but instead the customer found the problem and suddenly you are no longer a supplier.

That proposal didn’t meet the requirement, and you lost the opportunity

We didn’t meet the delivery date the sales team promised, and the customer is very unhappy.

The customer found a problem and the solution in the documentation doesn’t work – it did in the last version, but there’s been a change.

These shortcuts can appear to be nothing more than a quick fix, sometimes it doesn’t even feel like you are making a decision but actually it is a positive decision not to do something.

Like any action, consequences flow.

 

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Building trust

 

There’s a saying that people only buy from trusted sources, and if you combine that with the one “people do business with people” you begin to recognise just how important it is that your prospects and customers can trust you / your organisation / your people.

Establishing trust is difficult and can take a long time. Destroying it can take seconds. I know I have quoted this before, but it bears repetition:

Trust arrives on foot and departs in a Ferrari – Mark Carney, Governor of the Bank of England.

The rules for maintaining trust are actually very simple.

Be consistent. Trust requires certainty and inconsistency is the enemy of certainty.
Be very clear. Nothing destroys trust faster than disappointed expectations, and they often result from a lack of clarity. Who is going to do what by when?

Keep your promises

If you are going to fail to meet a promise, tell your customer early!
Be responsive. If you don’t answer questions or provide information when requested, your customer will think you have something to hide.

Building trust takes longer and is a little more complex.

Be visible. Your prospect has to know you first. If you know who your prospects are, and where they are, make sure you are visible there. That might be a trade magazine, a particular website or an exhibition. If your prospects are there, you should be too.

Be helpful / of value Your prospect has to like you. If you provide something for nothing or for very little (an email address) you are helping your prospect. We like people who help. What can you give away?

Make it easy. Your prospect will still be nervous and hesitant. What can you do to make the decision an easier one? Is there a trial version or a low cost “light” program they can experience?

Give guarantees. You are confident that you deliver value, so guarantee it to your prospect.

That’s it from a customer / prospect perspective, but what about building trust within your teams?

Similar principles apply – do what you said you would do, when you said you would do it. That will take you a very long way.

 

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Was the fault in the system or in the execution?

Every business has times when things don’t go according to plan. A customer was let down and made a fuss, you are embarrassed and have to take remedial action. All of this costs money and time.

It is really easy to jump to conclusions and decide it was the fault of an individual. You remonstrate with the individual and that makes you feel better.

It doesn’t make them feel better – and it may not make their colleagues feel any better!

Take a step back & consider if the fault was really with the individual, or was it with the “system” they are operating in?

Consistent performance comes from well-established processes and procedures that miniseries the amount of human input required to achieve the end result. In many respects that is the basis of a quality system.

Do you have a set of processes and procedures, or are you just relying upon the knowledge and skill of the individual? Is it a blend of the two? You have processes, but they only work because of the individual’s ability to interpret them and apply their experience?

The perfect system is one where you could put a new person on the job, give them the procedure and they achieve the right result. Ultimately you are trying to de-skill the operation, so that everything is easy.

One great advantage of getting the procedures right is that it allows you to assign more complex tasks to the people who were using all their skills and experience to get the result without the procedure. You can give the de-skilled process to less experienced or less capable people.

That allows you to recruit at lower levels, invest in training those new people to learn your systems and grow into the business. If you don’t de-skill the processes, you have to hire people with greater skill levels who are going to be more expensive.

Time invested in creating processes is never wasted – but be a little wary. If you create an “idiot proof” system, someone will prove themselves to be a better idiot!