You Will Increase Your Bottom Line Take Home Profits by 25-95% When You Stop 5% of Your Customers from Leaving You and Going to a Competitor

So 82% of people who leave one business and go to another do so because of a customer service issue!

Have you ever wondered why customers leave and never come back?

Most people think it’s because of price, the person moved, the person died, etc… Well you don’t have to look far to find out the REAL reason that customers leave.

A US News and World Report study found that the average American business loses 15% of its customer base each year:

  • 68% of customers who stop buying from one business and go to another do so because of poor or indifferent service.
  • 14% leave because of an unsatisfactorily resolved dispute or complaint.
  • 9% leave because of price.
  • 5% go elsewhere based on a recommendation.
  • 1% die.

The Harvard Business Review reported that if you can prevent 5% of your customers from leaving, you can increase your bottom line profit by 25–95%.

See Ya Later!But what’s really sad for you and me, is that most of those customers who leave don’t bother to complain.  They just leave and don’t come back. Then you’re stuck spending a bunch of time, money, and resources trying to get new customers when with some consistent and persistent messages and training to both your team members and customers, they would never have left in the first place.

It’s been shown time and time again that getting new customers is one of the most expensive things you can do to grow your business.  Once we get a new customer, we simply can’t afford to lose them.

Getting New Customers

But this is great news for you!

Every business category is seeing more and more competition every year.  Just about every category has a version of national chain competition, competition from discount franchises, price competition, and competition from the internet, all making it harder and harder for you to thrive.

But the great news is that in this most important area, the reason most customers leave one business and go to another, you can not only beat the competition – you can crush them. 

To illustrate this, lets talk about mindset for just a bit. Have you ever been asked the following question…

“What do you do for work?”

It comes up all the time, especially when you meet someone new. It’s a natural question, and most people answer almost without thinking. What would you say?

Well, if you’re like most people, you’re going to say something about the product or service you work with. You’re going to focus on the deliverable and there’s nothing wrong with that. But here’s the thing…

That is a large part of what you do at work, but that’s not necessarily the business you are in.

In just a bit, I’ll give you the powerful 2-step strategy to creating happy customers, but I need to go over something else first…

Before you start implementing these strategies in your business, it’s critical to understand that half the battle is getting in the right mindset. You can do all of the right things when it comes to customer service, but truly exceptional customer service  first comes from a way of thinking that is far to rare these days.

Let me explain a little bit…

I used to tell people that we were in the business of selling retailers everything they needed to operate their stores. But I was wrong. Dead wrong.

Make People Happy

In the early 1980’s I watched Tom Peters and Robert Waterman’s video In Search of Excellence.  The video shows first day employee training at Disney World. The trainer at Disney asks the new cast members, “What business are we in?  We know that GMC makes cars, and Whirlpool makes refrigerators.  What do we make at Disney?” The answer is, We Make People Happy.”

From that moment on I knew what business we were in: We Make People Happy. That’s why we call the customer service we provide and teach, Make-You-Happy Customer Service.

By the way, I explain this and more in detail in by newest customer service book. You can get a free copy of my book The Happy Customer Handbook by clicking here.

I’m often asked, “What is the #1 thing business owners can do to improve their customer service?” Another question I get is, “Why is customer service so poor?”

The answer to both questions is the same. To illustrate this, let me tell you about some results we get when talking to actual business owners. When I speak to live audiences I often ask this question…

“What SHOULD you be doing when it comes to customer service training in your business?”

Customer Service Survey

With every audience almost all hands go up for answer (E).

Sounds great right? Everyone knows that their team should have customer service training up front and also reinforce it. But there’s a catch…

We’ve surveyed thousands of business owners about customer service as well.  We ask them the exact same question, but we flip one word. We ask:

“What ARE you doing when it comes to customer service training in your business?”

Only 2% answer (E)!

Why is it that everyone knows their team should have customer service training up front and consistent reminders, but almost no one does it?

Here’s what happens in most businesses.  With the best of intentions, the business owner has a “rah, rah” meeting about customer service, and the service improves for a few weeks, and then without reminders you’re back where you started.

And it’s simple, the reminders don’t come because you’re a busy business owner and you have lots of other things to do.

But this may be even more amazing.  More than 75% of all businesses have no upfront consistent customer service training for new employees.

So the answer to both questions, “What can business owners do to improve their customer service?” and “Why is customer service so poor?” is the same, and it’s all contained in the 2-step process below:

Keith Lee's Free Book

 

The 2 Step Formula to Customer Service Success

1.  Train your entire team to deliver exceptional customer service.

At the very beginning, your entire team needs to get trained with your exceptional customer service expectations. This is the “rah, rah” training I talked about above.  But it can’t stop there.  You need to consistently and persistently reinforce those expectations.

Zig Ziglar says, “Repetition is the mother of all learning.”

Repetition

But learning something doesn’t necessarily lead to behavior change, so when it comes to customer service in your business I tweak Zig’s quotation to,

“When it comes to customer service, repetition is the mother of all learning and permanent behavior change.”

Let’s take a second at this point and look at the bigger picture. Why is customer service so important in today’s business world?

I own four businesses, and all of them are dependent upon small independent businesses for their survival and growth. My businesses can only thrive when their business thrives, so I’m dedicated to seeing that independent small businesses not only survive, but thrive.

At our American Retail Supply 35th Anniversary customer Appreciation Conference and EXPO, one of the speakers asked all 800 people in attendance if they had a unique product that people couldn’t get anywhere else. In the entire room, only two hands went up, and I’m betting their competitors think there is a substitute product.

Almost no one has unique products or services that people can’t get elsewhere, so we need to give them a reason to do business with us rather than someone else. 

The one area you can do that with the biggest return for your effort and money is with Make-You-Happy Customer Service.

I’m not talking about customer service in a box.

Customer Service In A Box This isn’t about the canned, ‘Thanks for shopping at Mega-Mart, have a nice day’ kind of customer service.

We’re talking about Make-You-Happy Customer Service in which, even if you mess up, the customer is going to come back because they like and believe in you and your staff!

We’re talking about the kind of customer service in which customers are not just satisfied, but loyal.  Customer service in which customers not only come back time and time again, but enthusiastically tell others about you.

Another great reason to give Make-You-Happy Customer Service is, it’s fun.

People love getting Make-You-Happy Customer Service.  But people also love, and have a huge amount of pride, when they give Make-You-Happy Customer Service. Make-You-Happy Customer Service is fun for you!  It’s fun for your team!  Your customers love it!  And the day goes much faster when everyone has fun.

Make-You-Happy Customer Service is not just great customer service when you’re watching, but all of the time. In the following video, I explain a few of the reasons exceptional Customer Service is critical to small businesses. After watching it, continue reading to find out the 2nd ingredient in creating exceptional customer service…

2.  Consistently and persistently reinforce your customer service expectations with your team.

First, lets go over consistency:

I spent eight years working in the grocery business.  I thought the company headquarters had consistent customer service messages and expectations, but those expectations were totally undermined when, in the break room, the business manager made fun of customers and joked about how stupid they were – even to the point of making fun of their appearance.

Is it any wonder, that with a few exceptions, our customer service was indifferent?

It’s also no wonder that when a new manager came in with respect for everyone, team members and customers alike, our customer service level improved dramatically along with the business sales.

You must never put down a customer in front of your team members.

Be sure that your signs respect your customers and are positive rather than negative.  Good Signs

Rather than, ‘No returns without sales receipt,’ how about ‘Returns gladly accepted with sales receipt.’  Or ‘Cash Refunds allowed with your sales receipt’ instead of ‘No cash refunds without sales receipt.’  Or ‘Checks gladly accepted with two forms of ID’ instead of ‘You must have two forms of ID to pay with a check.’

So we know we have to be consistent in our customer service messages. But what about persistence?

One day a newspaper reporter asked Zig Ziglar about the “motivation stuff” he was talking about.  The reporter asked, “If someone attends this seminar, would they be set for life when it came to motivation?”  In other words, they were asking, ‘Is motivation permanent?’

Zig’s reply, ‘No, motivation is not permanent, but then again, neither is bathing.  In fact I recommend that people bathe daily, and get a dose of motivation daily.’

The same is true of customer service; I recommend and in fact, Make-You-Happy Customer Service requires that you – company management – are persistent with your customer service message.

You must find as many ways as you can to reinforce your customer service message persistently to both your customers and your team members.

Here are a few ways we’re persistent with our customer service message:

Every contact with a customer that comes from me ends with the sign off, ‘Only Happy Customers Come Back.’ 

Whether it’s a letter, an email, the Retail Tip of the Week, invoice stuffers, or a message to customers in our monthly newsletter, I always sign off with ‘Remember, Only Happy Customers Come Back.’

On eight walls throughout our offices, we have a stenciled quotation from Walt Disney that says, ‘ Do What You Do So Well That People Can’t Help Telling Others About You.’  In addition, we have over thirty Disney prints throughout the office to remind people of the Disney quotation and that our job is to Make-People-Happy.

Disney Quote

On the mirror above each sink in each bathroom, we have a small sign that says,

‘The next person using this sink may be the person who makes your mortgage payment… OUR CUSTOMER. Show him the pride you have in serving him by leaving this restroom spotless.”

We have eight different versions of this with different colors and different sayings.  For instance, a red one says, ‘The next person using this sink may be the person who puts your kids through college – our customer…’  A blue one says, ‘The person who will buy you your next car…’

They are in different colors so that when changed, our team members are more likely to see and read them.  In addition, to ensure our team members see them, we periodically move the sign to a different spot on the mirror.

This not only reinforces our customer service philosophy with our team members and our customers who use our restrooms, but the restrooms are actually kept cleaner.

Here are just a few other ways to be persistent with your Make-You-Happy Customer Service message:

  • Your on-hold phone message
  • Signage throughout your business
  • In your advertising
  • On your web site
  • In emails

So that’s the two step process:

1.  Train your entire team to deliver exceptional customer service.

2.  Consistently and persistently reinforce your customer service expectations with your team.

“So that’s great,” you might say, “but how do I do that? Where do I start?”

It all starts with the little things. In my book, The Happy Customer Handbook, I give 59 secrets to creating happy customers who come back time and time again and enthusiastically tell others about you. These tips are a great way to get started implementing customer service in your business right now.

 

Keith Lee's Free Book

 

So there you have it. You have the 2-Step Process for Customer Service Success and 5 action tips that will help you start this in your business RIGHT AWAY.

Remember, Only Happy Customers Come Back
Keith Lee
keith 2012 shoulders up
www.keithlee.com

P.S. If you want to see the other 54 secrets, you can get them in my book The Happy Customer Handbook. And you can get the book for FREE by clicking here.

How to Work With an Upset Client

Train All Team Members Who Come Into Contact With Clients How to Work With an Upset Client

By Keith Lee

We’ve used this system to take care of upset clients in all my businesses since 1991.

I suggest you train your front line people to implement the LEAR Principle and the “Make-You-Happy Guarantee” (which I’ll explain later).  You don’t need to advertise this new guarantee when you start.  Simply implement it and see how it goes.  If it works, go with it.  If it doesn’t work, go back to what you have now.

Here is the LEAR Principle

L is for Listen

Listen and don’t interrupt.  There are a lot of reasons we don’t interrupt upset clients.  We don’t interrupt because, number one, it’s rude.  Another reason is that when we’re upset, you and I and everyone else do the exact same thing: We practice what we’re going to say.  And we practice what we’re going to say from the beginning.  So if you interrupt, you’re probably just going to have to listen to the whole thing all over again from the beginning.  Then of course we listen to the client because we respect the client and know that they are, in fact, the boss.  They pay all of our bills.  They give us every raise we’ll ever get.  They pay for our kids’ education and for everything we own.

E is for Emphasize

Empathize means to put ourselves in their shoes.  Say something like, “Wow.  I understand why you’re upset.  I’d be upset, too” or, “I’m sure glad you told me that so we can do something about it.”  Or simply, “Thanks for telling me.”

A is for Ask

Ask, “What can I do to make you happy?”  Now, most of the time you don’t actually have to ask.  Often times it is obvious.  But, sometimes you will want to ask.  The main thing though, is the idea and your attitude of “What can I do to Make You Happy?”  It’s your job to make the client happy.

R is for Resolve

You will want to give your team members guidelines as to what they can and can’t do right then and there to make the client happy.  If what the client wants is reasonable, and it is within the guidelines you give, your team member needs to make the client happy.  Train them to take care of the client right then and there.

I know if is easy for me to say without an angry person in front of me to implement this LEAR Principle.  It’s a lot more difficult to implement calmly and rationally when someone is possibly screaming at you or showing a huge amount of disfavor towards you.  You need to train your team members to understand that the client is upset at the situation and not with them.  Teammates need to be trained to not take it personally.  They need to understand that the client is upset with the situation and not them personally.  Train your team members to take a deep breath, and tell themselves, “This is not me. It’s the situation.”  Train them to talk to themselves and make sure that they are the person who stays calm and collected.  Train them that there is never an excuse ot get angry or short.

If the client is terribly abusive with swearing or something like that, your team member needs to be trained to say, “Sir, if you could watch your language I’m sure I can help you,” or, “Ma’am, if you want to watch your language I’m sure I can help you.”

Now, what if what the client asks for is above your guidelines or is completely unreasonable?  In this case you simply say to the client something like, “I’m going to have to get a manager to see if we can do that.”  Or, “Let me see if my manager can take care of that for you.”  Or, “You know, we don’t have a manager here at the moment who can approve that right now, but can I get your phone number and I can have them get back to you tomorrow morning or whenever is most conventient for you?”

In order to use the LEAR Principle effectively I suggest you empower your front line people with your “Make-You-Happy Guarantee.”  I believe “Make-You-Happy” is the best and least costly guarantee for your business.

Here’s our Make-You-Happy Guarantee:  “When a client has a problem, American Retail Supply team members are trained to ask, ‘What can I do to make you happy?’  In 43 years we have never refused a client’s request to make it right.”

Does this mean we’ll do anything?  Just about.  We’ve never refused a client’s request to make it right yet.  But my guess is that someday someone will ask for something so outrageous that we don’t do it.  Then I won’t be able to say, “In 43 years we’ve never refused a client’s request to make it right.”

I’ve given my seminar, “How to Compete with the Mass Merchandisers” to many different organizations.  Each time I ask retailers if any have a guarantee similar to ours.  In every seminar a few people raise their hands.  Then I ask them how the guarantee works.  Every person, every time answers, “Great!”

Then I ask each of these retailers with the What Can I Do To Make You Happy Guarantee, “How often do people ask for more than what you would be willing to give them?”  The answer is “Almost never,” or “Never!”

If people never, or almost never ask for more than you would be willing to give them, why ask them to jump through hoops, or talk to a manager to give them what they want?

This guarantee will most likely cost you less than a guarantee in which you make an offer to the client.  More often than not the client will ask for much less than you would have offered.  This savings will more than make up for the few times that clients are unreasonable.

You certainly will want to give your staff some guidelines.  Give them a limit as to what they can do without a manager’s approval.  Then, unless the request is ridiculous, train them to take care of the client on the spot!

Again, if the request is ridiculous or over their limit, train them to say something like, “I’m sorry, but I’m not authorized to do that, but if I can get your name and phone number I’ll be sure that our owner gives you a call tomorrow.”

So What Happens When Someone Asks for Something Really Unreasonable?

In my next blog post, I’ll go over some tips on what to do in the rare event that someone asks for something really unreasonable. Stay tuned…

In the meantime, are you wondering where these guidelines come from? And how do you handle other things like greeting customers, talking with customers on the phone and working together as a team to deliver better-than-average customer service? Click here to find out more about how we do this in our businesses.

For a limited time, you can also get a free copy of my book – The Happy Customer Handbook.

Customer Service Expectations

Remember, Your Customers Need To Know Your Customer Service Expectations

by Keith Lee

I get a few phone calls each year from customers who think they are not getting Make-You-Happy Customer Service from us.  Almost all of these calls start with, “I read in your newsletter that customer service is important to you, and I just wanted you to know…” or “A few months ago when I was on hold I heard that you wanted me to call you if I had a problem that wasn’t being taken care of.”

Sure, nobody likes getting calls like this, but in another way I LOVE GETTING THEM!

What’s the alternative?  For most businesses it’s a customer who really doesn’t want the hassle of complaining.  A customer who doesn’t care enough about you to say anything.  The customer who goes to the competition and not only doesn’t recommend you to others, but maybe even bad mouths you.  I love customers who give us the opportunity to MAKE THEM HAPPY.

Another thing you need to be sure to understand is that even though I consistently and persistently tell my clients over and over again to call us if they are ever disappointed and call ME if they are still not happy, just about every one of the people who call me to tell me that we’ve failed them, apologizes for calling.  That’s critical to understand.  You can’t just say this once and expect them to actually let you know when they’re disappointed; you need to tell them over and over and over again.

Find as many ways as you can to tell your customers that you want to know if they are not happy.

I stole an idea from Stu Leonard’s Dairy (which is a supermarket) in Connecticut.  He has a big sign with his picture that says, “What do you like?  What don’t you like?  I’d like to know!”  Every invoice we send out at American Retail Supply has a flyer that asks the same questions Stu Leonard asks: What do you like?  What don’t you like?  I’d like to know!  While it is redundant to send it out with every invoice, we do.  I want to be sure that every customer knows that they should expect Make-You-Happy Customer Service and that I want to know if they don’t get it.

But then, if you’re going to ask for input from customers, you need to act when you get it.  Every customer who writes to us at American Retail Supply, whether it’s a good comment or a complaint, gets a response.

Again, every chance you have, tell your customer you want to hear from them if they’re not totally happy.  Tell them when they are on hold.  Tell them with signs in your store.  Tell them in your advertising. Tell them any way you can think of.

Of course another reason you want to ask for those complaints is so you can fix the things that went wrong in the first place…

But there’s yet another great reason.  Your team members aren’t likely to forget your customer service expectations when they know that your customers know them and that you want your customers to tell you when they don’t get exceptional customer service.

Click here to see more about how we meet and exceed customer service expectations in our businesses.

Bury Your Ego

Bury Your Ego

by Keith Lee

 

I recently invested in myself and my company by attending a Glazer Kennedy Inner Circle event. While there, I went to lunch at an independent fast food style Mexican restaurant. The food was so good, I ate there 2 of the 4 days I was at the event.

While I was waiting for my order, a lady came up and said, “I ordered beans and got rice instead.” The clerk replied, “You ordered #1 with rice and salad, and two #3s beans and rice.” The lady replied, “Well, I wanted beans.” To which the clerk said, “I can give you a side of beans.”

In this exchange, it was obvious the cost of the beans was totally irrelevant – it was a tiny cup of refried beans for crying out loud! The clerk’s EGO was the issue. Why did she need to tell the client that she was wrong?… EGO.

A more timid client would have likely turned around without reiterating that she wanted beans, ate, left, and never come back. Who knows, in fact this client may not come back after being “put in her place” by the clerk. Remember, 68% of clients who leave one business and take their business somewhere else do so because they were treated with indifference.

There is a huge chance that this client will go somewhere else after being treated rudely. Anyone who works with your clients needs to be trained to put their ego aside. In this case, just say, “Oh, I’m sorry, let me get you a side of beans.” No EGO, no “putting someone in their place”, no chance for an upset client, no blame, just fix the problem.   Most client problems are just this simple. It just doesn’t matter. And it sure as heck is not worth embarrassing a client or making a client look bad.

So what was I doing at the Glazer Kennedy Inner Circle Event I talked about at the beginning of this article? I was practicing the quotation  from Jim Rohn, “Rich People Have Big Libraries, Poor People Have Big TVs.” Let me tell you how true that was for me at this event, and how true it can be for you when you spend your time and money increasing the size of your library.

While attending the seminar itself didn’t physically increase the size of my library, just attending the event and taking notes was a huge addition to my Mental Library and extensive library of notes and ideas. The tuition for this conference was $1497. Airfare, hotel, and food added well over $1000 to the cost. So my total investment for the conference was at least $2,500 plus a few days away from work.

One of the many incredibly exciting results of these three days happened at breakfast the first morning. I ran into a guy I had met at a previous conference so we had breakfast together. While talking with him at breakfast, before the conference even began, I got one idea that returned me at least 10 times the $2500 investment I made to go to the conference.

This newsletter is an example of investing in your library. The act of reading this blog post alone shows your team members that you are serious about client service.

I suggest you share this, “Bury Your Ego”, article with your team. It’s likely that teaching your team to do something to stop just one customer from leaving you and going to your competition will pay you big dividends.

If you want to find more great tips like these, then click the link below to request my free book The Happy Customer Handbook. It’s chock full of secrets to creating happy clients who come back time and time again. Not only that, they tell others about you. Just click the link below to get the hard copy delivered to your front door:

I want a FREE copy of The Happy Customer Handbook.

Beating The Odds – Part 2

Beating The Odds – Part 2

We’re picking up our conversation on one of our great clients at American Retail Supply, McLendon’s Hardware, which has seven locations throughout the Seattle area.  To review part one, refer to the last blog post (Beating The Odds).

Competition Makes Them Better

I’ve done a lot of research over the years on how to compete with the national chains.  I’ve been sharing that information with my clients in my monthly newsletter for 21 years and my bi-weekly email retail tip since 2004.  In my research I found that those companies that survive and thrive look at the new competition as a challenge to get better themselves.  McLendon’s has done this also.

For years McLendon’s knew they should be looking into better automating their inventory and point-of-sale computer system.  When the retail giants came to town they made the investment in their future but also were sure to invest in new software that really helped them stay focused on their customers and not allowing the software to take away from their exceptional customer service.

Other areas in which McLendon feels the competition has made them better are display, advertising and pricing.  McLendon says, “We never really concentrated on end caps other than to put things on them.  Now we have a person in every store hire just to do that.”

McLendon’s realizes that with the big guys right down the street they need to be much more aware of price competition so they can be seen as having “good” prices.  Their advertising person consistently pushes to have “hot buys” in their ads.

What can you learn from the competition to make you better?

Variable Pricing Structure

McLendon refers to his variable pricing structure as A item, B item, C item pricing.  “A” items are very competitive, commodity items, that everyone uses and everyone knows the price.  McLendon knows his prices must be “good” on these items.  They don’t need to be the same or lower than the retail giants, but they need to be very close.  “B” and “C” items are not as competitively priced and the company can get better markups.  Sadly, too many independent retailers refuse to accept this type of pricing strategy.

Buy Right

McLendon’s, like many who compete well with the mass merchandisers, is a member of a buying group.  They buy a lot of their product though True Value.  With the exception of direct import items, McLendon feels their costs are in line with the retail giants.  But he believes the retail giants often get advertising allowances that he does not get.

Don’t Compete Directly With the Retail Giants

McLendon’s knows their niche-huge selection and great service.  In addition, McLendon’s now very carefully considers location as a niche when opening a new store.  When opening a new store McLendon asks, “Is it their market?”

The retail giants in the hardware business like to be near freeways and locations that attract large number of people.  McLendon’s looks for a niche that is not close to freeways, has a good population base, but isn’t a place that the retail giants are likely to put a store that requires a huge population to support.

This is huge.  How can you position your product and/or services to go where the competition ain’t?

Brand Names

A strategy retailers like to use to compete with the retail giants is to carry brands that the giants don’t carry.  In the past, McLendon’s tried to carry brands that the big guy didn’t carry.  With the number of competitors now in the market, and the huge popularity of a few brands in the hardware business, that strategy doesn’t really work.  As a whole, McLendon’s tends to carry quality brand products.

Hours of Operation

Historically hours of operation for McLendon’s shows the company’s long roots and reflect the work ethic in the community – early to bed, early to rise. The company has always opened early and closed early.  Today they’re finding they need to extend those hours.

Store used to close on Sundays.  Today, Sunday is the company’s second busiest day of the week.  McLendon’s stores used to close at 6:00 PM.  Now they close at 8:00.

Temporary Sales Decline

McLendon’s has found that retail giants moving into their market is a cause for concern and an opportunity to improve, but it is not a cause for panic.

Like retailers across the country, McLendon’s has found that stores sales drop somewhat when a retail giant opens a store close to McLendon’s.  but like many independents, McLendon finds that within nine months sales are back to where they were before and growing… maybe not growing as fast as they did before the big guys moved in, but growing.

You Can Thrive

Mike McLendon and McLendon’s Hardware have proven that yes, you can thrive in the shadow of the retail giants and compete with them, but not directly against them.  McLendon’s focuses on a broad product line, great customer service, and a niche location to not only survive, but thrive in the shadow of retail giants.

Discover more ways to improve your business by requesting one of my free books: How to Control Your Business and Your Life and The Happy Customer Handbook

by Keith Lee