Are You Making Customer Retention a Top Priority?

Nearly two-thirds (64 percent) of consumers say they have “stomped out” of stores and 67 percent say they have hung up on hold because of poor customer service, according to a new Consumer Reports survey.

I was astounded at the lack of priority and vision those statistics reveal when it comes to businesses not only attracting new customers but also retaining the ones we already have. In today’s marketplace, except for a few standout brands that have done an amazing job at being “indispensable,” competiting for consumers’ loyalty doesn’t seem to be a major priority for businesses. Big mistake.

Check out the diagram below about the cycle of customer acquisition, retention and referrals from inside Flip the Funnel by Joseph Jaffe. Getting new customers, retaining them and then getting more customers from the ones you already have is the perfect business ecosystem — but it is only possible if retention is a priority.

Flip the Funnel Graph

This week I had another run-in with my now big, fat, out-of-touch cable provider. What shocked me was:

  • The package I had signed onto was not the package they had me on.
  • My service had to get interrupted so that I could call and ask what was up.
  • The service people I reached on the phone ranged from clueless and disinterested to flat-out rude and inconvenienced.

I also went to a very popular, usually consistent restaurant this week that was a service and quality disaster that night. They got hit with a big party of people that had their kitchen and servers scrambling. I don’t care. Schedule more people that night to handle it. We waited 45 minutes for our main dish, and when it came, it was bad. I called over the manager, who was polite, accommodating and took the dish off the bill. They will see me another time for that.

bad dinner

I am a consumer who pays dearly for my credit card, media, phone and communications services. If a company is not treating me like gold, a diva, special, appreciated, respectfully, I am going to dump them immediately. Loyalty and longevity are built on the highest commitment to customer service and retention.

There are far too few companies I could list here that “get it” and are doing it, but here are the customer service elite according to a Bloomberg Business survey. What are they doing that got them on this list?

Indispensable, standout, unexpected service today is as essential and important as air, water and food are for the survival of human beings. Make this a priority, and you and your company have a chance for success and longevity. Ignore this and you and your company are headed for Jurassic Park!

If a company is not:

  • consistent
  • responsive
  • knowledgeable
  • relevant
  • pleasant

. . . they will be gone from my world pronto!

Whew, I feel better now. What’s your take? Who is treating you right out there? What can you learn from them?

40 Comments ▼

Deborah Shane


Deborah Shane Deborah Shane is a Top 100 Small Business Champion, career transition consultant, personal branding strategist and social media catalyst. Deborah hosts her Deborah Shane Toolbox blog and her Top 100 Small Business Podcast 2013, Deborah Shane Metropolis. She writes for national sites including Forbes, Monster, Personal Branding Blog and Small Business Trends. Her book, "Career Transition: Make the Shift" is available through all major book sellers.

40 Reactions

  1. My philosophy on customer retention through over-the-top customer service is “do it or die!”

    Great blend of facts, 3rd party credibility and warm personal stories for a readable and valuable article. Way to go, Deborah. I’m seeing you all over the place! Love it.

  2. Beverly, thanks for your response and your mission statement. The focus on new business is always important but keeping the customers we worked so hard to get is to me more important becuase you not ony have them but now their potential referrals. Always a please hearing from you.

  3. I only wish that companies with systematically poor customer service would disappear. Then I wouldn’t have to deal with Comcast screwing up my cable every time and the phone support hell they put you through every time.

    Heck, even Google AdWords has terrible tier 1 customer support. They can’t fix anything but the most pedestrian issues and 90% of the time I get transferred to a “specialist team” or “engineer” so they can put me on a 24 hour stall.

  4. I, too, am passionate about customer service, not only as a business owner, but as a consumer! We have reached a ridiculous low as far as prioritizing customer retention. One example, is that if you are a new customer for a credit card, bank or cable/internet/mobile company, you are sent to the top of the phone queue. When you owe them money, again, you are answered right away. However, if you have a problem with their service and it is not working as they have promised and billed you for, you are forced to wait on hold, while their voice-on-hold system tells you it is better to go to the website, or just leave a message. They don’t want to talk to you. I am flabbergasted at this system. That’s just an example. There are many more examples out there. Again, it’s a ridiculous new low.

  5. Jen, I am with you on this! Corporate v small business. It’s up to the company and who they put in charge as to how important that is going to be. Managing ‘biggness’ in corporate or focusing on your small business community..It’s a choice..I have had some of the best and worst experiences in big and small companies. I make a choice and I can choose who to reward! Thanks for your comment.

  6. Robert, thanks for chiming in. I say it’s a choice. I choose to be the exception and I will ultimately win. We need more competition in some industries so companies can make a decision to make it a priority. When you grow too fast you can’t keep up unless you put the systems in place that help you do that. Comcast has a social media CS team that I only use now and get answers in 60 seconds.
    @comcastwill, try it!

  7. Susan Oakes

    The one I see with large and some small businesses is they overlook the little things that can retain customers. One is the offering of discounts for new customers but nothing for current and loyal customers.

    I also think that small business owners who sell services are perhaps missing out on an opportunity to retain customers. Many offer their services on a one off project base rather than looking at how they can package up the services and provide them throughout the year. This would allow them to have a more consistent presence with their customers as well as make more sales.

  8. The lack of customer service both internal and external truly amazes me. It’s as if all the managers that studied Edward Deming have retired. For example with all the modes of communication available I have to contact my brokerage by phone, then I get a voice mail full message! I hope this new generation recognizes the relationship between employment and customer service before its too late.

  9. Susan, it really makes no sense does it? Finding new customers are the life of any company, but keeping them and making them multiply through referral is the key. There are so many things companies can do today to reward and motivate customers. Thanks for your take.

  10. David, the bigger and more active our business world gets, the more companies and businesses are falling behind and losing focus on the simple, fundamental old school process. You find a customer, build a relationship, and use that relationship to grow more? It’s up to me, and the company to put this back on top! Thanks for your comment.

  11. Deborah. GREAT article! At first I thought you were referring to the big, out-of-touch cable provider I am considering dumping after being a “loyal” customer for 20+ years or the popular upscale ‘breakfast’ restaurant I visited this morning. Then I realized that you are in the US and I am in Canada.

    I am being held ransom for cable, internet, and cell services based on a loyalty-incentive contract that penalizes ME if I leave even if the provider is not fulfilling its contract for consistent, quality service and competent staff. The restaurant I took a colleague to this morning served our food cold on a cold plate. What happened to best practices such as warming the plate and serving the food while it is hot? Food was returned and then replaced by another cold plate and cold food with a lame explanation and an offer of a complimentary beverage to buffer my disappointment.

    Rather than focusing on doing-it-right-the-first-time and providing a great customer experience, discounts have become the norm for addressing customer disappointment and complaints. I don’t want discounts, points, and other loyalty incentives (bribes) – that’s manipulated loyalty. I want consistent good service and fair exchange of value at the very least. I am on a mission to patronize only those businesses that are making customer retention a top priority – in an authentic way.

  12. Smart and timely post,

    Unfortunately so much energy and systems are built around new customer acquisition when we should be “dancing with the date who brought us to the dance.”

    Once trust is broken, very rarely, if ever can you win it back.

    Great post

    Mark Allen Roberts

  13. Patricia, attention to details can have a big impact. Thanks for venting!

    Mark, way to get a plug in there for that great article!

  14. Deborah-

    Thank you for a fantastic post. As an advisor to many small businesses, I often remind them that “There Is No Marketing Cure For Sucking.” Some people laugh when I say this, but I am being bold because, well, it’s true. In today’s highly connected world, businesses have limited control over their brand. Today everyone has the ability to influence, whether it be on Facebook or around the water cooler; what your customer says about you has greater impact on your reputation and ability to attract new customers than anything you can say about yourself.

    That means providing an excellent customer experience should be your top priority. If you serve your customers well, social media will reward you with positive reviews and referrals that yield organic customer acquisition. However, if you provide a poor experience (ie: you sucked), social media will let you know. That’s not such bad thing; so long as you use that feedback to improve and you take the time to reach out and engage the unhappy customer (you may be surprised how easy it is to turn that unsatisfied customer into your biggest advocate).

    With that in mind, it’s now more important than ever to be customer-centric. This is where small businesses have a big advantage. Unlike a big brand, a small business can actually respond to every customer without having to spend lots of time or resources managing social media. For most small businesses that don’t have the mega resources of a large brand, flipping the funnel is one way to gain a competitive advantage. As @jaffejuice says “Retention is the new Acquisition.”

    Mark Schmulen
    General Manager of Social Media
    Constant Contact

  15. Mark, This is an awesome line: “There Is No Marketing Cure For Sucking.”! I have been a big fan and user of your product since I launched my business in 2007. Building a personal relationship with customers is easier than ever now. Putting a dedicated person in charge of it, if you can or doing it yourself and being consistent goes a long way. Customers who become dedicated testimonial referrals because you have gotten to the know, like and TRUST place with are priceless. Thanks for taking the time to share your thoughts!

  16. Question, I made a comment a few days ago and it has not been posted, so does that mean I did something wrong. I really was trying to add value and apologize for comment errors.

    Thank you

    Sam Maropis

  17. Anita Campbell

    Hi Sam,

    Thanks for commenting.

    Sometimes Akismet filters out messages. I’m not sure why.

    Another possibility: if the comment was left with a business name or site name, instead of a person’s name, the Moderator team probably filtered it out.

    But your comments in the format you left this one are welcome and appreciated.

    - Anita Campbell, Editor in Chief

  18. My comment has to do with the cost of customer service. lets face it, it costs money to have someone answer the phone and help the customer. As a small business, pricing is always a major issue. I know that I have charged to little in the past and in may ways still do. But as a buyer, do you buy from the cheapest or best. They can not be the same. In a large company the cost of customer service is spread over a much larger pool of paying customers. For small companies, the spread is much thinner.

    There are always limits to customer service. what we can and can not afford drives so much.

    Sam

  19. Make sure that your employees are open to customer feedback, psychologically and logistically. Customer comments can give you insight into what’s working and what’s not working with your product or service if you are good about collecting and analyzing it. It may seem obvious, but make sure you have a way to collect complaints via phone, online support, or Twitter. And if you invite customers to contact you, you have an obligation to respond in a timely fashion.

  20. Sam, I certainly appreciate your comment and position. Costs as a business are super important to evaluate. I seriously think it comes down to prioritizing which costs are best spent and that they are an investment you make in why you are spending money on them. There are very affordable platforms and tools that make investing in customer service and retention atop priority! Don’t skimp on this! Small Business Trends has amazing resources for this. Thanks for chiming in!

  21. Steph,
    Survey’s, focus groups and consistently monitoring their comments and experience is invaluable. You are so right: “DON’T ASSUME YOU KNOW”. Thanks!

  22. I couldn’t agree with you more, Deborah — and treating your customers with respect and professionalism, which includes being honest about the misstep that took place — is paramount. In other words, if the business/company is wrong, was rude, insenstitive, etc., it should be admitted and the problem should be corrected immediately by the manager. I consider this to be a rather basic rule of business conduct, but I’ve witnessed horrendous behavior that has simply gone unchecked by the establishment in question. Many people call it a sign of the times, but I don’t accept that explanation – not if one expects to be successful in business.

  23. @Sam – while cost is an absolute driver, cost alone is no excuse for bad customer service. As a company (big or small), decide on the non-negotiables for customer service and make those a priority for investment (time, money, attention and effort). Trying to be ‘all things to all people’ is where small businesses in particular trip themselves up by spreading themselves too thin and giving their customers a schizophrenic ‘hit-and-miss’ customer experience.

  24. @Sharon I so agree with you. there is no excuse for bad customer service, big or small companies. I think rather a small business should decide what type of sale distribution channel they want to sell to. If a company sells to end ushers, there is a greater need of high quality customer service, if the business sells to a distribution channel then that channel assumes the cost and to a degree the quality of end customer, customer service.

    What I wanted to point out for the small business is to price the product correctly so that they are able to give the quality customer service they need to. sometimes it is better not to make a sale than make a bad sale.

    Thanks

    Sam

  25. Sharon and Debra, great comments. Thanks for being a part of this “struck a nerve” thread! Sam, some good things to think about here and your comment id well taken!

  26. Thanks for reinforcing the issue of customer retention. It’s really amazing that people will spend inordinate amounts of money to acquire new customers, but won’t spend a little bit of time or money on retaining the same customers that they spent so much time getting in the first place. Retention rates are a key metric in increasing the lifetime value of customers. The best ROI anyone will ever get for their marketing dollars is by retaining the customers that they acquire!

  27. @Sam – I see what you mean about taking the cost of customer service into account, depending on the level of customer service required. And I absolutely agree with you, with the small discalimer that even if you don’t sell to the final consumer, your retail channel is still your customer and also deserves a certain level of good service.

  28. Rohit, “The best ROI anyone will ever get for their marketing dollars is by retaining the customers that they acquire”! Well said and thanks for joining the conversation!

    Sharon, “even if you don’t sell to the final consumer, your retail channel is still your customer and also deserves a certain level of good service.” Right on. The customer is whoever the dealings and relationship is with. Great point.

  29. I only wish that companies with systematically poor customer service would disappear. Then I wouldn’t have to deal with Comcast screwing up my cable every time and the phone support hell they put you through every time.

    Heck, even Google AdWords has terrible tier 1 customer support. They can’t fix anything but the most pedestrian issues and 90% of the time I get transferred to a “specialist team” or “engineer” so they can put me on a 24 hour stall.

  30. I agree with Deborah and lots of great points have been made! Aside from the crucial personal attention, a lot of customer service and customer retention inadequacies also stem from a lack of proper infrastructure, systems or tools as well.

    Small businesses lacking up to date technology (or even adequate technology) regarding IT, online tools and support often find themselves disappointing customers even though they may have the best of intentions! In other words, you call Mr. Bob, the most amazing customer service rep in the world but the phones are down and you get an annoying beep instead. Or you email him only to discover their servers are down. No bueno.

  31. John, as competition heats up with companies that emerge and give their customers real people, others will indeed disappear, or step it up. Thanks for your comment.

  32. Dustin,technology is part of the solution and problem.It’s still the awareness and belief in real people talking to real people no matter how big or small you are and hiring people who are actually suited for this job.

  33. Deborah, I agree. I suppose the point at which technology actually interferes or attempts to replace human interaction is where the breakdown begins.

  34. I really like shopping at Whole Foods. Every time I go there someone asks if they can help me, and when I do ask someone on the floor to find something they almost always know where it is.

  35. This post is much needed. When reading your article most of the examples that came to mind were a slew of horrible customer service experiences I have had with companies I’ve done business with for quite sometime. There’s a lack of ownership and loyalty to customers out there… And it relates directly to customer retention. I’m glad to know many small business owners are honing in on this dilemma and making the experience of “doing business” richer for their clientele.

    I agree with Deborah and Dustin that technology is both the solution and the problem. Effective small business owners must know how to make it work for themselves and the relationships they have with their consumers.

    Thanks again for shedding light on this!
    -CareerKeri

  36. Dustin, so true. Sometimes sensing where that is or has become is challenging. Always good rule of thumb to commit to talking to 10 or more people weekly. Thanks for your comment.

  37. kim, ditto here. They are very natural about that. People who work there want to work there and take ownership of the culture.

  38. Keri, the ultimate success for me is not only finding new customers but keeping the ones I have. Attrition is staggering today,due to customer retention losing it’s priority. It’s up when it should be down!b Appreciate your comment.

  39. I agree with your post – and all of those commentators above, who stress the importance of excellent customer care.
    A good telephone manner and welcoming smile really CAN be expected, and, no doubt, are positive for all parties involved.
    However, when it comes to “sucking” I am not so sure. Of course it is paramount to take full responsibility for any mistakes we have made, yet, when customers try to negotiate prices down or ask for unreasonable free-bees, saying “So and So is giving me that.” – what is one to do? I have occassionally given into this and have seen many others bending over so much that they resented it and the customer usually did not return either, as they sensed that those who bend over too much don’t have enough confidence in their product, so it does not always pay off and usually leaves a bitter aftertaste.

  40. Very valuable thoughts! Thank you. I do fear poor customer-service is a world-wide phenomenon! Over here in Europe, we seem to be just as frustrated as those 64 percent of persons interviewed saying “that during the previous 12 months they had left a store because service was poor”. I even wonder whether frustrated customers would leave more than only one store during this period?

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