Most people, if they were asked, would probably agree that the standards of customer care have fallen over the last decade. There are many reasons behind this trend, ranging from suppliers taking what they perceive to be unnecessary costs out of their business to advances in technology.
There is no doubt that the increased use of technology has helped many companies to save money and reduce staffing levels. Many processes that required their customers to interact with a member of staff have now been automated and made impersonal. Suppliers have lost the points of interaction they had with their customers, the ones that were used to gauge satisfaction levels and explore additional sales opportunities.
For example, an insurance company will now provide an automated service to produce quotes and accept orders. It saves them employing front-line staff but they miss the opportunity to sell other insurance products. All insurance companies try to do this via their websites but their customers find it easy to reject such offers.
Had the quoting process still be handled via personal contact, the seller could ask questions to find out why other insurances are rejected by customers. The knowledge built up from this level of interaction would enable the insurance company to offer other policies at just the right time, with the most relevant benefits being highlighted.
Customer care is viewed with some cynicism by many purchasers, who feel suppliers provide only minimal levels of interest in their existing customers. It is easy to recall examples of bad customer care, where suppliers just don’t seem interested in looking after their existing customers.
For some reason, the concept of the lifetime value of customers seems to have fallen out of focus. This is odd because it remains true that making follow on sales to an existing customer is easier (and therefore faster) than selling the same items to a new customer. In the past, it was also much cheaper to sell to existing customers so this was another reason to retain customers for the long-term. Now, this differential is closing.
Providing high levels of customer care is costly. It is inevitable that these costs come under intense scrutiny whenever a business encounters difficult trading conditions and underlying profitability falls. There are many benefits in having a bunch of happy customers. Some are mentioned above. Others include the likelihood your customers will recommend you to people they know who might also buy from you. These referrals save you the time and cost of lead generation.
If you can get sufficient referrals to deliver your growth plans, it takes lots of pressure off your marketing function.
Having lamented at the drop of customer care standards, there are still some companies who deliver exceptional customer care and create masses of long-term loyal customers as a result.
A good industry in which to find the full spectrum of customer care levels (from excellent to rubbish) is the car industry. Retail outlets and service centres have ample opportunities to interact with existing customers. Some car manufacturers understand how customer care can result in steady revenues and profits long after the sale of a vehicle. They provide a good experience to customers knowing that when it is time for them to trade-in their car, these customers will buy from them again.
I have, over the past 30 years, bought several cars from Volvo dealers. I switched to Volvo after having some poor experiences with Ford dealers. Without a doubt, these experiences meant that I never bought another Ford vehicle – all the revenue and profit from these lost car sales and the ongoing servicing and repairs was lost through poor customer care.
The Volvo dealers haven’t been faultless but they have been good enough to retain my loyalty and they have been rewarded with a steady number of sales.
Closer to home, let’s imagine you need to have your boundary fences replaced because the existing ones are rotting. This is a common problem for all home owners. For fencing contractors, everyone in a given neighbourhood will be a prospect for their services at some time.
For most home owners, replacing their boundary fences is a significant expense. The potential disruption and damage to prized plants nearby is a big concern. As a result, they ask around their neighbours for recommendations – which fencing contracts did they use and how was the experience?
I did the same. I asked around to identify fencing contractors who were sensibly priced, did a good job and left the garden afterwards in a tidy state. Several people I spoke to were quite open and said they used xyz company but would never go back because of the hassle / mess / disruption.
It helped me to identify a company, certainly not the cheapest, which had a number of happy customers in my neighbourhood. Again, they weren’t perfect but my fences were replaced with no collateral damage to plants and the job was completed promptly.
I have never heard from them since. Perhaps they noted that with all my fences replaced, I wouldn’t be a prospect for them for another 10 – 15 years. This is true. However, a couple of telephone calls after (say) 3 months and 6 months to check everything was satisfactory would have cost them little. They could have used these calls to ask for referrals and obtain new introductions.
They were a good company and with a little more attention to their customers, they could probably gain a steady stream of referrals, allowing them to grow their business more easily than finding all their new customers the “cold” way.
- Decide on how you could improve your customer care processes to give existing customers a better experience and encourage them to offer you referrals and introductions.
- Ask your customers to give you some honest feedback about your customer care processes. What do they like? What do they dislike? What could you do better?