Tag Archives: Customer service

October 8, 2015 · 9:31 am

Beyond The Data

If you’ve been reading along this week, it must seem as if I’m obsessing with data. While my inner nerd is peeking through a bit, that’s not my real obsession. The data I’ve been writing about is only one aspect of what is a primary business obsession of mine: customer retention. It ought to be one of yours too.

Simply put, the only two things that should be a primary focus of your business thinking are making great products (or services) and providing great service to customers. Why? Because those are the two keys to customer retention and customer retention is the key to a successful business.

There is lots of research on the value of keeping a customer versus acquiring a new one. According to research by Market Metrics, your success rate selling something to an existing customer is around 65 percent. The probability of converting a new prospect, on the other hand, is only 5 percent to 20 percent. If you’ve been servicing those customers well and providing great products, that’s a very believable finding since the folks that know you, love you. They spend more too: research says about a third more.

So why aren’t you spending more time thinking about customer retention and about how to cut down the churn rate? Probably because the data points you’re reporting as KPI’s are emphasizing customer base growth. There is a place in the dataset for acquisition information and an important one at that. But, for example. when Google reports that 25% of new app users leave after the first day they install an app, obviously new users can only take you so far. Are you looking at retention rates by acquisition channel? Didn’t think so.

Data is a tool, not a crutch.  The business is about growing and retaining customers.  There are lots of ways to do that but at the core of every one of them are a great product and even better service.  Is that what you can honestly say you have?

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October 1, 2015 · 11:12 am

Rusty Tanks And Being Ripped Off

20 or so years ago, we installed two large propane tanks to power our cooktop and a new furnace. Since they have an expected lifespan of about 15 years, we asked someone from our propane company to come take a look at them. We had noticed they were rusting a little, so better safe than sorry, right? Sure enough, they need replacing. How this leads to us replacing the propane supplier as well is a tale from which any business can learn.

English: 2 larger propane tanks, one with a re...

(Photo credit: Wikipedia)

We have been very happy with this company. Service has always been prompt, they deliver on a regular schedule and we’ve never run out of propane. That was the case when we called this time to come have a look at the tanks – they were there the next day and came back to us with a proposal to replace the tanks. We made an appointment for later this week to have the work done.

Just out of curiosity, we made a couple of phone calls to other suppliers. What we found out enraged us. Not only was what our supplier proposing to charge us to remove and dispose of the tanks way out of line with the market, but what they had been charging us for propane over the last decade was substantially higher as well. I’m talking about higher to the tune of over $1 a gallon, and when you’re using several hundred gallons a year, that’s a big difference.

In addition, these guys never offered us the ability to “lock in” a price for a heating season. Our oil supplier, as an example, sends us a letter every year with three different lock in options. It shouldn’t surprise you that when our supplier called to confirm the appointment, we cancelled it, informing them that we’re talking to other suppliers and had discovered that we were being ripped off for years.

10 minutes later, the phone rang. Suddenly, the cost to remove the tanks had vanished. Our rate for propane had dropped a lot, and we could lock it in for the year if we so chose.  While we still might stay with them, our opinion of them has changed substantially.  Customer service isn’t just about answering the phone and handling issues when they arise.  It is caring for your customer even when they don’t know that they need care.  Would we pay a little more for great service?  Probably.  The propane is a commodity so the difference is service.  That needs to have transparency, and now that we see what that service has been costing us, we are angry.

There are no secrets anymore.  Yes, it’s our fault for not asking about pricing and plans, I suppose.  That, however, demonstrates the value in keeping customers happy.  We didn’t ask because we were happy with them.  Now that we have asked and have realized that this has meant the overpayment of thousands of dollars over the years, we are far less content.  If you’re keeping customers happy by keeping them in the dark, you had better be damn sure there isn’t a rusty tank out there waiting to expose the issue.  Is there?

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September 11, 2015 · 11:02 am

Disparaging Non-disparagement

More silliness from the restaurant world this Foodie Friday.  Today we have the tale of Grill 225 in Charleston, which is a well-reviewed steak and seafood place.  They do many things right.  According to most of what I can find,  the food is delicious and the service is attentive.  They are the #8 restaurant in Charleston, according to Trip Advisor, which is no small feat in a very competitive restaurant town.

In addition to being good at what they do in the restaurant, the management appears to be very good at social and other media.  Many of the Trip Advisor comments have a reply from the restaurant in the thread.  Not only does the writer thank the customer but they manage to turn each of their posts into a subtle commercial for some aspect of the restaurant (our USDA Prime steaks, so glad you enjoyed your famous Nitrotini).  Smart!  Which is why I was surprised to read about them doing something seriously dumb that has blown up and is instructive to the rest of us.

Like many popular places, Grill 225 asks for a credit card when you make a reservation.  If you are making a reservation for a party of 5 or more, they send you a “dining contract” which notifies you that should you cancel all or some of the requested seats within 24 hours of the party’s arrival, they will hit you with a $50 per seat fee.  If someone gets sick and doesn’t show, the same fee applies (so if your party of 8 becomes a party of 7 because your pal got hung up at the office, you’re out $50).  Many restaurants have a similar policy, although most will tell you they never actually charge the fee.

Where Grill 225 failed is what else they added to the agreement.  As the local paper reported it:

The terms set out by Grill 225 aren’t unusual. To curb the costs associated with empty tables, an increasing number of restaurants are threatening to charge miscreants. But Grill 225’s contract includes an additional clause: “By agreeing to these terms and conditions, the guest(s) and their party agree that they may be held legally liable for generating any potential negative, verbal or written defamation against Grill 225.” In other words, if someone in your group kvetches online about the restaurant enforcing its stated rules, a lawsuit may follow.

 

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