Connect with your customers
If you are going to make a New Year’s resolution for your business this year, decide to get
to know your customers better so you can be on their wavelength. Most of us are so out of touch with
our customers, it is laughable.
For example, the other day, while driving to Taupo to give a speech, I heard an advertisement on the
radio for an Auckland car dealership. According to the advertisement, this dealership does not have
customer parking, they have guest parking because they treat their customers as guests. Consequently, “when
you come to see us, you will have comfortable chairs to sit in, magazines and newspapers to read and
coffee and tea to drink while you wait.”
Unfortunately customers do not want to wait. Research shows customers want fast service. Do you wake
up on a Saturday morning and say to your partner, “Let’s go down to the car dealership for
a cup of coffee?” Of course not, when you go to a car dealer you want to be served right away.
Perhaps this disconnect explains why 96% of consumers in America had at least one bad customer experience
last year. These bad experiences have serious negative consequences for both the customers and the business.
In another study, 85% of the people surveyed said they had had a customer experience so bad it had caused
them to shout, swear, throw something, break something, have a headache, experience chest pains or cry!
In the first study, 80% of those having the bad experience stopped doing business with that supplier
as a result.
Research also suggests that we are so disconnected with our customers we think we are doing a good
job. In one study, 80% of business owners and managers said they believed they were treating their customers
well. Unfortunately, only 8% of their customers agreed!
Why are we so out of touch? One reason is we are not in contact with our customers. A recent global
survey found that 67% of senior managers admitted they did not have regular customer contact. Consequently,
they are likely to make decisions that make sense to them but not to the customer.
I experienced this when I went into my local Warehouse two weeks before Christmas. I wanted to buy
two small bedside tables for the guest room since we had guests coming for the holidays. There was only
one on the shelf so I asked a staff member if they had any more. He went to check and came back five
minutes later saying they had six more in stock. He went to fetch one and returned 10 minutes later
empty handed. It seems there were six more in stock but not in that building. “They have been
removed from the store to make room for Christmas merchandise and are now being stored off-site,” he
announced. “They will be back in the store after Christmas.” Given we were in the furniture
section where there was not a Christmas item within 20 meters and there was lots of room on the empty
shelves under the display item, none of this made any sense to me but I must assume it does to someone
within the Warehouse organization.
Admittedly, the owners of smaller businesses have more contact with their customers, but I suspect
most of the time this contact is focused on selling something, which means talking to the customer rather
than listening to them. In the latest issue of the Harvard Business Review, businesspeople were asked
to name the “biggest mistake’ salesmen make. Not listening was the second most common mistake.
The first mistake, by the way, was not following the customer’s company’s buying process,
which is another example of being disconnected with the customer.
The real problem is that we do not understand the financial consequences of being disconnected with
our customers. A recent global survey found that 90% of business leaders did not know the cost of a
complaint, acquiring a new customer and of losing an existing customer. This is at the heart of the
matter, I believe. Until business owners know the cost of creating a bad customer experience, they will
remain disconnected with their customers because spending time getting to know their customers will
be seen as a cost, not as an investment.
What can you do to make your resolve to get to know your customers better a reality? First, do the
maths and understand what it costs you to have an unhappy customer (they stop doing business with you
and also deter a lot of others), to acquire a customer (cost of advertising, promotional offers, sales
staff salaries and a share of the overhead) and the cost of losing an existing customer (what they spend
each year times 15, 20 or 25 years = their lifetime value to you). You will find these figures to be
very motivating!
Secondly, spend a little bit of time with your customers understanding how they want to be treated
and what would make the customer experience great for them. Also, find out how well you are doing right
now so you can keep doing the things that are working well, improve those that are not and add in those
things that would make a good experience great.
Customers are your business. They provide you with 100% of your profits. In this crowded market, the
only way to get a competitive advantage is to know more about your customers and turn what you know
into action faster than your competitors.
|
