It is easier to lose business than to get it

Businesses are not philanthropic institutions: they exist to make money in the form of profit. To make money businesses have to anticipate and satisfy customer’s demands, so that customers provide the necessary income to the business in return for the goods or services that they require. Identifying enough potential customers who have the requirement for the goods and services on offer, is the primary problem for every business. Having identified the potential customers, the next difficulty is to convert them into customers that pay for their goods and services.

It often costs businesses more than they realize in order to gain a new customer – and considerably more than it does to retain them, so it is surprising how businesses can often take a casual attitude to their customer relations and to retaining customers for their repeat business. Gaining and retaining customers is a privilege not a right. Customers don’t have to give their business and they are not obliged to remain customers, especially if the marketplace is filled with competing offers for products and services.

Providing special offers may help to maintain customer loyalty in the short term. Money off vouchers and other incentives in the world of consumer sales may help to maintain repeat purchases, but it can be a two edged sword, especially if special offers, gifts and discounts are perpetuated. If incentives are perceived by the customer to have become the normal result of their purchase, it becomes difficult for a business to discontinue them without harming their image in the eyes of their customers. In that case the incentive has ceased to be a reward or encouragement, but has become part of the product/ service package, and must be costed and treated accordingly.

Maintaining customers depends largely on how the product or service is delivered. As a minimum standard customers should always receive their goods and services at the price agreed and delivered in the manner and time expected. This is certainly the case in business to business transactions, where delivery to price and specification have particular importance to companies involved in manufacturing, or where their supplies inventories work on “just in time” deliveries.

From time to time, mistakes will be made; – products may fail to meet their specification, deliveries are incorrect or are late, or perhaps there are mistakes in the invoicing.

When a customer complains, the customer is not always right. But customer complaints need initially to be treated in the first place, as if the customer were right. It is easy for some employees not directly involved with the customer to treat such complaints as a nuisance, but complaints are a valuable source of information about how customers perceive the product and service for which they are paying.

It is all too easy for employees not directly in contact with the customer to be unaware of how their actions can alienate both potential and existing customers; for example a delivery not being made on time, a credit level exceeded that prevents delivery, incomplete orders.

When such events occur, provided that customers are informed of the problem at the earliest opportunity and kept informed about progress to its resolution, the harm to customer relations will be minimized. The worst situation is to not inform the customer of any problem, but allow the customer to find out the hard way, which may create problems for the customer, and breaks the trust of reliability between the customer and supplier.

For managers responsible for getting and retaining business, it is important to ensure that all employees understand that however remote their jobs appear to be from a direct relationship with the customers, their actions can have a significant role in the acquisition, retention or loss of a customer’s business. Getting customers and retaining their custom is hard work which can easily be undone and negated by others who don’t appreciate the consequences foreseen or unforeseen of their activity or lack of it.

If a customer complains, and there is shown to be a problem, the first action is to admit it to the customer and apologise. It is the job of the manager responsible for getting and retaining business to investigate the complaint, its possible causes, and to provide a swift remedy for the problem. In doing so, managers should consider the following principals:

* Don’t assume that approved business procedures are followed, always check.

* Can procedures and policy it be verified?

* How do you know?

Managers who are responsible for getting and retaining business, must take ultimate responsibility when customers are lost through failings of company staff. Managers must check that the policies, procedures and results are maintained by their employees, and be ready to help when foreseen and unforeseen problems arise that effect the customers. All businesses make mistakes, but how those mistakes are handled may often decide whether the business retains or loses its customers.

© N.C.Watkis, Contract Marketing Service 06 Aug 11
Contract Marketing Service, (Marketing Performance Consultants)

August 15, 2011   Posted in: business development, business efficiency, Business Marketing, business performance indicators, business performance management, business performance measurement, marketing management

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