The Real Boss

The American Marketing Association recently conducted a study of over 500 businesses in the United States from different industries and found some interesting results.

The study found that on average, for every 100 customers lost to a company, one is lost due to death; three are lost because the salesperson calling on the customer left the company; five are lost because they began buying from a friend or relative; nine left to buy at a lower price from a competitor; 14 are lost because their complaints were ignored; and 68 are lost because the of the company's indifference and lack of interest toward them.

That adds up to 82 customers out of 100 lost because of inefficiency on the part of ownership. I say on the part of ownership because that's where the blame belongs.

I have a client in small southern town who, has owned a hardware store for the past 25 years and is still going strong despite the competition from larger worldwide companies. What's his secret? The owner makes sure that no one who works for him ever forgets a customer.

Within a few days after a purchase of any item, the customer receives a handwritten thank you note. Then, the company stays in touch with customers on a regular basis by mail or email with a newsletter and specials going on at the store. They never forget a customer.

The world is full of nice people who will never tell you why they stopped doing business with you. They'll come into your place of business or visit your Web site, make a purchase quietly and leave. But if they're not treated the way they feel they should be treated, or it's too complicated to navigate around your Web site, they'll never come back.

This is the customer you lose without being aware that you're losing him or her. This type of loss can add up into thousands of dollars, and in the case of big companies, millions of dollars a year.

This is why in-company training must be a never-ending process. It's as important to keep a constant training and reminding program going on inside a business as it is to advertise to the consumer. It has been proven many times that those businesses that hold regular weekly or monthly training meetings for their employees have a much higher bottom line that those that do not.

I have another client who owns a phone survey and customer service company in Chicago. On the desk of every employee is very attractive framed verse which reminds them that it's the customer who pays their wages and, thus, pays for their homes, vacations, the education of their children and their medical bills. They are reminded to smile and be especially courteous to every person they talk to.

It's been proven many times that most employees feel their paychecks come from the company they work for, and that the customer is something of a bother, an infringement upon their time.

This is why training, endless training, is essential if you're going to stay in business in today's competitive global market.

So it seems that better than 80 customers out of 100 are lost because of indifference and complaints that are not dealt with. It's tragic, but it sure makes for a wonderful opportunity for those businesses with owners who care about their customers.