Dan Kennedy conducted a study to discover why clients leave their vendors. His findings were dramatic.
Sixty eight percent of clients who leave do so because they feel unappreciated, unimportant, and taken for granted.
Remarkable. So while you are working on the quality of your product, your pricing, and performance, give some thought to your customer service.
You know they say it costs less to keep a client than to gain a new one. What do you think it costs to lose 68% of your client base? And what can you do about it? I find this information invaluable for any business owner. It not only tells you how to keep clients, it tells you how you can gain clients.
So what can you do to be sure you keep that 68 percent? Make sure they feel valued. Appreciate them and communicate that appreciation. Don’t assume your clients know that you value them. You have to tell them. Communication is a huge part of customer service. Too often we are so focused on gaining new clients that we forget to pay attention to our current clients.
It doesn’t take a lot of work or money to create an environment of appreciation. You don’t have to give them gifts and take them out to lunch on a regular basis. That’s not their expectation. Simple things like sending a thank you note or asking your clients for input work well; making sure that you are communicating with them on a regular basis has value as well. Another method is to get to know your clients as businesses and as people. What’s going on in their business? What’s going on in their life? Showing real interest will not only let them know that you care about their business but it will also provide you with valuable information; information you can use to increase the loyalty factor.
What does this study tell us about gaining clients? It tells me that consistently caring for your clients and making sure they know they are valued is attractive and a great selling point.
The other day I was conducting a workshop on selling and we were talking about differentiators and marketing messages. What a wonderful differentiator appreciation is! When you practice appreciation regularly and include it as an anchor to your company’s culture, it gives you a wonderful platform for your marketing message. You are speaking to an issue that apparently is important to the majority of people. Not only the majority – 68 %!
In addition you can use appreciation in the selling process. By consistently and effectively communicating with your prospect you let them know that you value them. When you prospect you should do it in a way that shows you’ve done your homework and believe you can help that prospect. When you are in the meeting phase you should be asking questions and listening to the answers. When you quote you should only respond to what the prospect told you. All of these behaviors let the prospect know that you value them.
When I do sales training I spend a significant amount of time on the idea that the prospect wants to know that you want to do business with them – not everyone. They want to feel valued even at that stage. So, as you navigate the prospecting stage you do yourself a favor by being sure that you are communicating with your prospect.
I submit that this desire to feel appreciated never goes away. So the way that we conduct ourselves from the prospecting phase through the client/vendor phase matters greatly. When you start out making someone feel valued you win them over. When you continue to let them know that you value them you deepen the relationship and increase the odds that they’ll stay with you.
What can you implement today to secure your 68% and chip away at your competitions?
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Thank you so much for this post. It’s an important one.
If you’re not showing the folks who are putting money into your bank account some love, and appreciation, they may just end up moving on.
There’s one thing that has made it a little easier to do, though;
Why not do it publicly, like on your Facebook Fan Page, for instance?
The Franchise King
I couldn’t agree more. I think small businesses experience this because they put so much intense energy into getting the sale. Perhaps they burn out a little. More likely, they are so focused on getting the next sale that they forget just how valuable that current customer is.
I recently read an excellent book on this topic called Exceptional Service, Exceptional Profit. I reviewed it here – http://tinyurl.com/esepreview. The book stresses just how important exceptional service is in taking customers from merely happy to intensely loyal.
I want to mention that while I agree with the premise, the numbers are presented unfairly and are inexcusably wrong. In the first sentence is states that 68% of those who leave (that is the key, those who leave) do so for the above stated reasons. That is not 68% of your total customer base. Who knows what percentage it is, but I assure you that you are not going to survive if it is 68% of your customer base. You would not last long if it was 10% of your total customer base, unless you are too big to fail and get government intervention. So 68% of those who will leave you will do so because you let them down. Our jobs rely on trying to keep that total number of defectors down, the easiest way is to try to keep this group from feeling that we did not try hard enough or that they were not important enough to us.
Has customer service taken such a backseat? If you’re suffering from a retention problem, start by looking inward.
II work in customer service training and have used a similar set of figures in class. I’ll ask the class what percentage of customers cease to do business with them because they move away, don’t like the product, die, are influenced by competition or feel the company is indifferent to them. The wake up moment is the percentage figure for indifference. 68% gets people’s attention especially in industries in which the churn rate is high.
We must be in tune some how, I just wrote a blog post called Four Ways to Show You Value Your Customers that takes about showing gratitude and proactively letting them know you care. http://www.impactlearning.com/blog/author/monica/
Thanks for your post!
Sorry for my delay in responding to these great comments. Matt you make a great point that it is not 68% of your customer base. It is that of those people who leave, 68% leave because they feel unappreciated.
For me this is a staggering figure. And something that is completely in our control. It isn’t a quality problem, or a product issue. It is simply how we choose to treat our clients.