I have, for the past several weeks, had the occasion to purchase some outdoor plants for a landscaping job I am having done. In some cases a visit to a general retailer has been sufficient for my needs, but there are a number of less common plants that required a visit to a higher-end nursery.
One of these nurseries is very close to my home, and another is not nearly as convenient. Yet all things being equal, specifically choice and price, I am willing to drive out of my way to purchase my shrubs from the nursery many miles further from my home.
Both have about the same selection, so what is it? Why would I waste the time and expense to go out of my way to buy something that is available much closer to me?
The answer: the closer nursery has a terrible customer experience. They act as though they are doing you a favor by selling you anything on their lot. Perhaps, over time, they have tired of answering questions and then watched as the customer left and filled their need somewhere else, like one of the many discounters in the area. Perhaps over time they have just gotten lazy and forgotten what customer service is all about. Or, maybe it comes from management who just doesn’t emphasize how important customer service is.
Store two is quite the opposite. Everyone is willing to spend as much time as needed to answer questions and make sure that your experience is over the top, whether you buy anything or not. They make you feel as though you are their only customer! Everyone is knowledgeable and seems to have a mandate to make sure you have a great experience while on their property.
Many business owners give plenty of lip service to the notion of customer service but don’t make it a part of their culture. They either don’t really believe in the idea or they just haven’t placed enough emphasis on making the customer king. If you fit into either category, the following list will be of significant interest to you. Perhaps it will cause you to do what it takes to provide an over the top experience for everyone who chooses to do business with you.
- Price is not the main reason for customer churn; it is actually due to the overall poor quality of customer service – Accenture global customer satisfaction report 2008.
- A customer is 4 times more likely to defect to a competitor if the problem is service-related than price- or product-related – Bain & Company.
- The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics.
- For every customer complaint there are 26 other unhappy customers who have remained silent –Lee Resource.
- A 2% increase in customer retention has the same effect as decreasing costs by 10% –Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.
- 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1Financial Training services.
- A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs.
- Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affairs.
- 70% of buying experiences are based on how the customer feels they are being treated –McKinsey.
- 55% of customers would pay extra to guarantee a better service – Defaqto research.
- Customers who rate you 5 on a scale from 1 to 5 are six times more likely to buy from you again, compared to ‘only’ giving you a score of 4.8. – TeleFaction data research.
- It takes 12 positive experiences to make up for one unresolved negative experience –“Understanding Customers” by Ruby Newell-Legner.
- A 5% reduction in the customer defection rate can increase profits by 5 – 95% – Bain & Company.
- It costs 6–7 times more to acquire a new customer than retain an existing one – Bain & Company.
- eCommerce spending for new customers is on average $24.50, compared to $52.50 for repeat customers – McKinsey.
With this weight of evidence, why do businesses still not focus on improving the customer experience? You might ask yourself the same question.
“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.” – Henry Ford