Customer Retention Programs, Relationships and Apologies
Customer retention programs are important to any large or small business. We all know
how much easier it is to sell something to an existing
customer than to acquire a new one. So why aren't we as successful as we
could be in retaining our customers?
The first thing we need to understand is that customer retention isn't built
exclusively on satisfaction; it's built primarily on relationshipsand like any successful
relationship, respect and trust are fundamentally crucial.
Respect and trust come from how we conduct and manage our daily business
relationships, especially in difficult circumstances, and from the customer service we provide.
Unfortunately, our first instinct when faced with a
customer complaint is to view the situation
negatively, which is usually the last thing we should do.
Instead, these 'crises' should almost always be viewed as an opportunitya positive step towards
customer retention. This is true not only for customers who voice these complaints but
even more so for the many customers who experience a problem but
don't complain. Many of them will still be looking to take their
business elsewhere but won't provide a warning. As Bill Gates once said "Your
most unhappy customers are your greatest source of learning".
Complaints should always be accepted, encouraged and welcomed as an opportunity to learn and build-on
existing and potential
business relationships. Unhappy customers should become part of a proactive customer-centric
business philosophya business strategy that develops and refines
recovery policies and successful customer retention programs.
In the broadest sense, service recovery is simply a series of measures to
ensure a quick and effective response to any negative situation and should
therefore become (and remain) an integral part of all customer retention programsand
perfect apologies need
to play a major role in that service recovery process.
Apologies can be pivotal in customer retention by immediately addressing customers'
while earning their respect and trust. The three primary elements of good
business apologies that speak directly to customer loyalty are:
ownership/responsibility for the mistake, some meaningful
compensation/restitution, and an explanation of how the problem will be
fixed to avoid any future recurrence.
Accepting full responsibility when apologizing for an error or inconvenience
is key, followed by a clear, credible and quick solution, and then some form
of restitution that lets the customer know they are valued.
The most important thing to keep in mind in terms of restitution is how it
is perceived by the customer. This might translate into a dollar value or a
more convenient way for your customer to patronize your business in the
future. Either way, it's critical to know how the
compensation is viewed by your customer.
A customer who feels valued is more likely to translate those positive
feelings into remaining a loyal customer and, more importantly will become
an advocate for your business which, in turn, will have an
ongoing positive impact on your bottom line.
Creating and developing customer retention programs that include a service
recovery process with detailed guidelines (especially for issuing apologies)
is one of the most effective means of building customer loyalty. The guidelines
should include, among other items, information on when and how to apologize; what wording to use
under various conditions; and what forms of restitution are available for specific types
of situations. Adequate training on the use and execution of the guidelines
should be part of the process.
These policies and related guidelines will also foster within your company a customer retention culture
that stakeholders (employees, partners, customers) will find very appealing. As a
result, customer retention strategies will be further entrenched throughout
the company through a
heightened awareness and appreciation of customer complaints that spans
the front desk clerk to the executive suites.
By welcoming customer
complaints, understanding their benefits, and having policies in place to
deal with them, you will optimize one of the most basic components of
effective customer retention programs.
Business Apologies from Customer