8 Steps to Satisfy Your Current Customers and Re-Charge Growth

In a previous blog, Things to Start Doing Today to Re-charge Growth, I described the first stage in re-charging growth:

The business leader needs to …

  1. Get personally involved in sales, marketing and customer service on a daily basis
  2. Talk to customers
  3. Talk to the sales team

As entrepreneur Ken Morse says: “if your business leader does not love customers and is not committed to delivering value to them, your venture will fail.”

The second stage in re-charging growth is to satisfy your current customers.

In general, tremendous attention is dedicated to the “sexy” business of finding new customers and markets. Yes, that is vitally important and is the third stage in re-charging growth. However, much of that effort is wasted if the success in finding new customers and markets only replaces the revenue that was lost as your current customers stopped buying from you.

In short, to re-charge growth, you first need to master the “mundane” task of holding on to your current customers by satisfying them and keeping them buying. Winning businesses are built inside outward; you expand on the shoulders of your satisfied and thankful current customers.

To highlight the importance of customer satisfaction, I relate a story from my own experience.

A few years ago, a $10M operation became part of my division. As a way to re-charge growth, I began working with the General Manager and the team to re-establish the importance of the customer and customer service. I asked the General Manager to go out and start talking to customers (both current and former). A few weeks later, the General Manager called to tell me about a meeting that he had just had with one of their former customers. The General Manager had met with the President of the customer company. This company, which was one of the 2 – 3 largest potential customers in the market, had done business exclusively with our operation until about 5 years before.

In precise detail, the customer President told the General Manager the story of why they stopped buying from us. Our company had let the customer down on a critical and time-sensitive job. Our product was late; we then lied directly to the President about the shipping status of the product costing the customer more money and delays; we never followed up; and we certainly did not apologize for our mistake.

It was no surprise that that was the last order that our company had gotten from that customer. In our discussion, my General Manager and I determined that this atrocious customer service and lack of follow-up had cost this $10M operation about $7.5M in revenue over the previous five years.

My question is as follows:

  1. How much time and effort went into getting new customers to replace the revenue lost by this one customer’s dissatisfaction?

Customer satisfaction does matter.

 

Some Fun Facts about Customer Satisfaction

A survey conducted in the early 2000’s about customer satisfaction had the following results:

 

  1. It costs 5 times more to attract new customers vs. keeping old ones
  2. 68 percent of the customers who walk away, do so because of lack of attention
  3. The average customer tells 9 to 10 other people about a poor service experience
  4. But, most customers will repeat buy if they feel that their customer service issue was resolved satisfactorily
    1. And they will tell 5 – 8 people about the good service that they received

 

 Satisfy Your Current Customers in 8 Steps

 

  1. Measure your churn over the last few years
    1. How many customers have you lost over this time?
    2. How many customers are buying less and less from you?

     

  2. Act on the churn data
    1. Don’t accept the answer that your customer’s business is smaller
    2. Follow up with them and ask why they stopped buying or are buying less

     

  3. Institute a very simple customer satisfaction survey
    1. GE and others have used this one:
      1. On a scale of 0 – 10, how likely are you to recommend this supplier to other people
        1. 0 – 3: Negatives
        2. 4 – 7: Neutrals
        3. 8 – 10: Positives
      2. Do you have any comments or suggestions for ways that we can serve you better?
    2. Make it easy to respond to
      1. Stick it in an E-Mail and ask them to answer the questions and hit the Reply button
      2. It is important that it be as easy as possible for the customer to respond, even if that makes it more difficult for you to collate the data
        1. Personally, I am glad to respond to a survey like that. It takes me two minutes and I get a chance to share my thoughts.
          1. But, I rarely click on a hyperlink to take me to a survey. It takes too much time, and I dread that the survey is going to be 30 questions long.

     

  4. Lead by example on customer service
    1. Get actively involved in customer problems and issues to understand and resolve these problems and issues
      1. In his effort to transform IBM into an integrated, customer-friendly organization, Lou Gerstner required his top 200 executives to make face-to-face problem-solving visits to at least five customers each, and then get personally involved in every visit report.
    2. Teach and preach customer service
    3. Autopsy customer service failures
    4. Share and praise customer satisfaction success stories

     

  5. Treat your customers well
    1. Respect the customer
      1. Repeat after me: there are no irrational customers, only lazy and arrogant suppliers
      2. Even when the profit on a sale is low, the customer expects and deserves good service
      3. Return their phone calls and respond to their E-Mails
        1. Even if you do not have the answer, tell them that you received their message and will get back to them by a specific date
    2. Communicate with the customer
      1. Tell them the truth
      2. If there may be problems, give the customer a “flashing yellow light” as a heads up
        1. As one customer once told me: “Had all parties known of the delays, we may not have been happy but at least we would have had an opportunity to make planned adjustments.”

     

  6. Perform
    1. Performance is very simple: do what you say you are going to do
      1. Especially deliver on the customer’s hot buttons
    2. Ensure that what you are providing matches the expectations of the customer and solves the customer’s problem.
      1. Note: the customer’s expectation may be different from what the PO or the contract says. Find out what their expectations really are and manage them.

     

  7. Maintain a sustainable presence with the customer and in the marketplace
    1. Consistent and intelligent customer contact and follow-up
      1. But, don’t waste the customer’s time
      2. If the customer does not buy during a sales call, try to give them a little quid pro quo – perspective, advice, industry overview, leads, something
    2. Listen to the customer
      1. In a survey by Harvard Business Review, it was determined that what customers most wanted was salespeople that understood the customer’s problems and understood how the salesperson’s product and services could help the customer resolve these problems
      2. How do you understand the customer’s problems? Ask and listen.
      3. As has often been said, all customers are turned to radio station WII-FM
        1. What’s In It For Me!!

     

  8. Ask about other needs and requirements that your company can address with the customer
    1. Opportunity for additional sales
    2. Opportunity for new ideas
    3. Opportunity for a partnership with the customer potentially tying you in closer with them

 Summary

 Think about it.

Your current customers already have a habit of giving you money. If you continue to earn their trust on a daily, weekly, monthly, yearly basis by doing what you said that you were going to do, they will remain loyal.

With loyal current customers, all the work to win new customers and penetrate new markets will be an add-on to your current revenue stream allowing you to re-charge growth.

 

Until Next Time.

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About David Shedd

David has been a President - CEO - COO of an up to $350M group of manufacturing, distribution, specialty retail and services companies, having led 22 different businesses from turnarounds to start-ups to fast growth companies.
This entry was posted in Growth and Strategy, Perform / Execution, Sales and Marketing and tagged , , , . Bookmark the permalink.

4 Responses to 8 Steps to Satisfy Your Current Customers and Re-Charge Growth

  1. Jim Howey says:

    David,

    Thanks for posting this. I have a local delivery company. We are a small company compared to most, but then again, many of the bigger players have gone out of business in the last 2 years. That’s given us an opportunity to provide services again for customers that have used us in the past. As I’ve gone out talking to customers, I experienced some of the very things your mention in your post. Good opportunity for us to correct mistakes of the past, and build a stronger company as a result of it.

    Thanks again,
    Jim

  2. David Shedd says:

    Jim,

    Thank you for your reply. As you wrote, this is the perfect time to get back in with your current and former customers. Many competitors are either out of business or have reined in their salespeople to just focus on processing current orders. That leaves a huge opportunity to re-develop customer relationships that have been lost, and, as you wrote, “to correct mistakes of the past.” Best of luck with your business.

  3. Pingback: How to Grow Your Business in Five Steps | David Shedd's Blog

  4. Mankind says:

    Thanks alot for that blog, i really felt relief after going through this.
    My business grows and i felt like she is over powering my ability to control. But with your tips, i felt like i have seen my errors.
    God bless you.

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