Monday, February 9, 2009

Client Retention: What Keeps Your Customers Coming Back?

Written by: Mike Tafoya

What keeps your customers coming back? An important aspect of Customer Service (CS) that all successful companies address is Client Retention. Remember, client retention is growth, and without it, you are forever replacing customers. A well-thought-out plan that defines how to keep your customer’s business is vital to the long-term success of your business.

Discipline: Client Retention
You may offer excellent products, but if the process of dealing with your business is an unpleasant one, your clients are likely to begin looking elsewhere. This is especially true if you are in a highly competitive field, and who isn’t these days. If you have a competitor whose product is equal to yours and the CS experience clients have with your company is a poor one, what’s to keep them from checking out the competition? Not much!

Creating a high quality customer experience

CEO Rule #1: “Customers remember the experience, not the product.”

That’s why good companies place a great deal of emphasis on making sure that their CS representatives provide clients with a high quality customer experience that covers these important areas:
1. New/Existing customer expectations/orientation. Do you know what your new and existing customers expect from your business, and does your CS staff properly orient them to know what to expect from you?
2. New order verification. Does your company have a clear process to verify orders for your products, especially from new clients?
3. Communication. When it comes to this important (and oft’ neglected) subject, your CS department needs to be pro-active, initiating frequent, open and honest contact. Sometimes they need to just call a client to ask how they’re doing!
4. Customer contact. A warm greeting, genuine friendliness and an intimate knowledge of their history with your company should characterize every interaction a client has with your business. 5. Timeframes for order fulfillment. Do your customers know all the steps required when ordering a product from your business, as well as the timelines involved for shipping, delivery and payment? Keep these matters as simple and clear as possible.
6. Knowledge of the customer—the company and the person. Don’t require your CS reps to merely know about the company they’re dealing with, insist that they get to know your clients on a personal level in order to build a strong relationship with them.

Assessing Your Company’s Performance
To begin assessing your business in terms of Client Retention, make a list of the things your Customer Service department currently does well, particularly in the above-mentioned categories.
1. When greeting prospective clients, does your staff connect on a personal level? This is very important when building trust with new contacts.
2. During client meetings, does your staff listen and record what the prospect is really saying: their wants and needs?
3. During the order process, does your staff acknowledge the order formally in writing? This is very important. Clients often feel forgotten once the order is placed. Order acknowledgement should be done in writing and in person or over the phone.
4. Once the order is acknowledged, does your staff explain the process for order fulfillment? The process review meeting will help the client to understand the procedure and manage expectations. If you don’t explain the process, the client sets all the rules for engagement—and you might not be able to satisfy them.
5. Once the order is filled, does your staff make contact to identify any problems with the order or the product? Order follow-up creates an avenue for the client to express their satisfaction or lack there of. Remember, a client’s unspoken complaint leads to a lost client.
6. When there is a problem, does your staff take care of the problem, or do they avoid the issue? Don’t ask the client if they are satisfied if you are not willing to fix the problem.
7. After the order is completed, and the client is satisfied, does your staff stay in touch with the client? Occasional messages sent to your clients keeps you at the forefront of their minds. When they need more of your service or product, you will be the one they call.

Some Practical Examples
Now, let’s take a look at a three CS scenarios for your consideration:
1. We once worked with a mortgage company that was fielding up to 30 calls per day from potential new customers. The business was losing many of these prospects simply due to the length of time it took to process the application and obtain approval. Their receptionist (CS rep) was spending a tremendous amount of time taking calls, forwarding messages from customers to other company personnel and ultimately having to deal with unhappy customers, complaining about the same issue multiple times. Upon investigation, we determined that there were three key contributors to the customer’s frustration: 1) The customer was not providing the necessary information to complete the process. In other words, they weren’t oriented well enough to the business to know the process, and weren’t being prompted by the CS rep to provide the required info. 2) The customer did not know the timeframes needed to move through the process. Again, the company was failing to provide this vital information to their clients. 3) The mortgage business was not keeping the customer informed about their loan status. Another failure of communication. Imagine the feelings (experience) you would have, if you didn’t know that status of your loan when attempting to purchase a house or other property!

CEO Rule #2: “An unfulfilled request is an unspoken complaint.”

2. We once worked with a company in the service industry that had over 3,000 active customers. One client had four full-time CS employees who spent 100% of their time taking incoming calls. We discovered that this business was losing 32% of their client base annually, and that the entire CS department was blaming the industry for their losses. Upon close analysis, we discovered the following three issues: 1) Each CS rep was fielding 25 customer request calls per day. There was greater emphasis on speed than providing a quality client experience. 2) 65% of all the calls were customer “call backs” on previous inquires—i.e., the subject of their original call had not been addressed, and/or no one was calling them back. 3) 100% of customer inquiries were sent to a Sale Representative to handle, when only 10% of them were sales related—a majority of the calls were about billing, production, service or general information.

CEO Rule #3: “Responding to a request is as important as fulfilling the request.”

3. A company had 32% to 35% customer losses per year. The owner committed to decreasing their losses to less than 5% over a two-year period. In an effort to do so, the owner implemented good CS systems, A/R systems and was working on implementing client appreciation systems. However, his efforts were undermined by the fact that his department managers all blamed each other for the client losses, and could not see (or admit) how the failures in their particular department contributed to the company’s losses. While it is, of course, primarily the CS rep’s job to ensure that a firm’s customers have a positive experience that leads to their continuing business, everyone in the company needs to contribute to the process.

CEO Rule #4: “Client retention is EVERYONE’S job.”

Retaining clients is a vital part of any business. It is far less about the product(s) you offer than it is about producing a positive and high quality customer experience with your company. The way that everyone in your organization—especially your Customer Service people—communicates with those who purchase your merchandise is especially important to keeping them coming back to you, instead of a competitor. Regularly assessing your business’s performance in this area is a wise practice. It is also useful to think about the good and bad customer service experiences you have had. What impressed you, and what didn’t? In many ways it comes down to the Golden Rule: Do unto others, as you would have them do to you. It’s really about building a strong relationship with those with whom you do business. So, how is your company doing when it comes to client retention?

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