3 reasons your customers leave by mastersofclientretention

MASTERS OF CLIENT RETENTION

THE 3 KEY REASONS CUSTOMERS LEAVE & WHAT TO DO ABOUT IT! MASTERS OF CLIENT RETENTION

Greg Smith

Masters Of Client Retention Phone: 0429 872 386 Email : greg@mastersofclientretention.com.au Website: www.mastersofclientretention.com.au

MASTERS OF CLIENT RETENTION

THE 3 KEY REASONS CUSTOMERS LEAVE & WHAT TO DO ABOUT IT! ABOUT MASTERS OF CLIENT RETENTION The sole purpose of the Masters

Client

Retention is to help

businesses like yours create authentic and meaningful relationships with their customers. This helps increase customer retention, improve profit margins and makes your business much harder for a competitor to copy or compete against.

Greg Smith Masters of Client Retention

MASTERS OF CLIENT RETENTION

Thank You

For Downloading This Report Inside you will discover the three key reasons your customers leave and what you can do to keep them.

“ Greg really is a master of relationship

marketing and the art of retaining clients. For twenty years Greg’s experiential education business has been creating extraordinary results for us. We always feel like we are going home when using his services - like we belong. I became an enthusiastic advocate because he genuinely cares and engages so professionally. - Michael Hewitt

“

The report is perfect for business owners or managers who want to stop competing on price, who want to increase their profitability and who want to provide exceptional customer experiences.

For clarification on any of the information in this report please contact us – we’d be glad to help.

If you’d like help with your own client retention strategies, just like the other Australian businesses in these industries have, please contact us today.

Industries servicing people who value their prized possessions •

cars

•

pets

•

boats

•

health

•

real estate

Industries servicing people who value their growth opportunities, education, personal development etc.

Greg Smith

Masters Of Client Retention

Web: www.mastersofclientretention.com.au

MASTERS OF CLIENT RETENTION

KEY REASON ONE: FACTORS OUTSIDE OF YOUR CONTROL APPROXIMATELY 20% OF CUSTOMERS LEAVE DUE TO YOUR COMPETITION, MOVING HOUSE OR DEATH While it seems there is not much you can do to change those circumstances it does not mean that all is lost, even in death

KEY POINTS

COMPETITION

MOVING HOUSE

DEATH

Online bargain hunting has become the new norm

Will new door to door parcel

Intergenerational marketing -

in an increasingly digital and disloyal world.

delivery services save

meeting family needs

Retail Think Tank (KPMG). Beware the race to the

the day?

across generations.

bottom on price discounting.

MASTERS OF CLIENT RETENTION

COMPETITION THE RACE TO THE BOTTOM The competition reduces their prices. You match their price reduction. They drop prices further. Without a circuit breaker the pattern of falling prices continues. Customers may enjoy short-term savings, but the survivor may be the business with deeper pockets. Are you in business to endure the pain of a race to the bottom? Are there alternatives?

Real World Example: A colleague tells the story of a barber (Max) who for years charged $10 for a man’s haircut. Unexpectedly a new barber shop opens across the street advertising $5 haircuts. The mathematics of $5 haircuts meant that neither business could survive very long. The solution? A new sandwich board outside Max’s shop. It read, ‘We fix $5 haircuts’. The challenger soon left town.

MOVING HOUSE ‘BUYING ON APPRO’ Customers move house and for some brick and mortar businesses the opportunity to stay in contact is lost. Not always though. Online sales, mobile communications, courier and postal services and other forms of connection may assist

Real World Example:

My wife grew up in a small country town where her mother

owned a fabric and dress shop. Accessing that town is now an 8 hour drive. The shop was sold 20 years ago but to this day my wife continues to buy some of her clothes there over the phone! There is a magic phrase that helps. ‘Buying on appro’, which means you can have clothes posted to your home, try them on and only pay for what you decide to keep. Unwanted items are simply returned at the shop’s expense. Dresses, tops and pants regularly arrive and depart. Consider the familiarity the shop staff have of my wife’s preferences and the mutual trust that is required. Yet it works! Of course I’m notified of purchases on a need to know basis….

MASTERS OF CLIENT RETENTION

EVEN IN DEATH? In the sad event of a death, the relationship with your business is understandably thought to be lost, but this isn’t always the case. Even after death experiences with your business can long effect those around this person and influence their opinion of you and your business for better or worse.

Real World Example: A recent interaction with a funeral business raised my awareness of what might be considered, ‘intergenerational marketing’. A middle-aged lady (generation A) passed away. Ten days after the funeral, the children (generation B) had returned to normal life. A heartfelt greeting card from the funeral home appears in the mail of both generation A and B. The front of the card displays a high quality picture of the deceased in her prime of life, some heartfelt reflective words and appreciation for choosing that funeral home. A surprise gift reads: ‘We know grief takes time so we simply wanted to check in. If the going is tough at present we are connected with professional grief counselors, estate planners and other services that might help. No cost to the family for the first 2-hours of appointments with those services. Simply call to learn more.’ The real message being sent is that the funeral home cares. Such an authentic offer and connection may well help those grieving, encourage other family members of generation A to plan and pay for their funeral now. Perhaps generation B feels like someone locally has their back in looking after Dad when they live so far away. Choosing an alternate funeral home when Dad passes is less likely now, even after death!

MASTERS OF CLIENT RETENTION

KEY REASON TWO: OPERATIONAL ISSUES. OUTSIDE IN OR INSIDE OUT? APPROXIMATELY 15% OF CUSTOMERS LEAVE DUE TO YOUR OPERATIONAL ISSUES It’s here you need to ask yourself: Are you thinking about things from the customer’s perspective (outside in) or from your operational perspective (inside out)

KEY POINTS

OUTSIDE YOUR CONTROL

WITHIN YOUR CONTROL

CONSISTENCY THE DOUBLE-EDGED SWORD

Realities of living and doing

Business systems built to protect

Customers enjoy consistency and

business on this planet

– do they always serve?

surprises – what to do when across generations.

OUT OF YOUR CONTROL The reality of living on our planet brings some unavoidable realities that we accept. If you plant corn today you cannot harvest it next Monday no matter how much a customer demands a quick turnaround. Although we plan for it, no one complains about how long it takes to grow corn. You never hear a customer complaint about gravity. You cannot change it, touch it or feel it or influence gravity in any way so people do not complain. It’s out of your control.

So identify the reasons that are in fact out of your control. Perhaps this may be transport times, government regulations or it may be weather. Note these unavoidable realities and accept that you cannot change them, and your customers will more than likely accept them as such too. Which means you can now focus on things that are in your control and which you can make a difference to.

MASTERS OF CLIENT RETENTION

SEEMINGLY IN YOUR CONTROL Business systems give you control over how your service is delivered. Wonderful outcomes are the result. Safety is exemplary, staff are well trained, there is a solid depth of operational experience, finances are professionally controlled, HR processes are efficient and the sales team is successful. You win industry awards and it’s difficult to fault your operation, yet something is not right.

Complaints are on the rise, new competitors and technologies are entering the market. You remain operationally focused because you know what’s best. Kodak, Nokia and Blackberry did not fare too well despite their wonderful products, history and operational efficiencies. Remember, your customers want you to help fix their new problem, meet their need or provide them with an opportunity. Additionally, they want to know that you care. If you are listening they point out that competitors have introduced new technology, they want speedier and simpler processes, the lack of car park lighting makes them feel unsafe, calls are not returned or frontline staff are grumpy.

It turns out that your team members are demanding more than just fair pay and conditions. They want to be included, inspired, recognised, and connected with the ‘why’ of the company. There is a desire to do meaningful work. If staff turnover increases too fast then the consistency you are so proud of suffers, efficiency falters, suppliers payment cycles extend, and your speed of delivery is slowed. Prices now rise to cover the inefficiencies and your once engaged client base deteriorates.

So ask yourself again:

‘Are you thinking about things from the customer’s perspective (outside-in) or from your operational perspective (inside-out)?’ The customer does not care what your operational challenges are.

CONSISTENCY IS PROFITABLE - UNTIL IT’S NOT No matter where you go on the planet, an experience of a MacDonald’s restaurant is consistent, right down to the tiny yet usually clean toilets. Regardless of your opinion of the food, this is a wildly successful business system built on consistency and the ‘known’. I suspect that complaints in any given McDonald’s store relates to the food not being the same as expected, and served in the period anticipated, rather than the quality of customer service.

If your business is consistent, which it should be, an interruption to that consistency may well be the reason for complaints from your returning customers. You need to keep up the good work you’ve already done in creating excellent systems to avoid potential disappointment. From that foundation though, unexpected surprises have spectacular potential.

MASTERS OF CLIENT RETENTION

REAL WORLD EXAMPLE SUPRISES DELIGHT Small investments recognizing preferences (the customer perspective) can be profitable For 15 years I owned and directed a

rushed 30 minutes each way to the

school and consequently many oth-

large, tent based school camp and

nearest town for new ingredients.

ers still put their request for sticky

education centre. Clients returned

In the nick of time and to huge

date pudding in writing before they

year on year for numerous reasons

fanfare and surprise, 4 huge trays

arrive each year.

including our restaurant-standard

of sticky date pudding appeared

catering. One afternoon mid-camp,

at dessert time with ice cream and

The quality of food and dedication

a long term client asked for some-

warm butterscotch sauce. It was

to listening to the client was con-

thing different for dessert for her

truly of amazing quality and second

sistent but it came in a responsive,

students that night. She admitted

helpings meant delighted

surprising package.

that after many visits, the chocolate

customers!

self saucing pudding was amazing but she wanted a sticky date

For years afterwards that customer

puddingâ&#x20AC;Ś.for 100 people!!

told dozens of colleagues about that surprise dessert. We ended up

The chef checked his watch, com-

with more schools on our client list

mitted to the new pudding and

as a result. Over 10 years later that

MASTERS OF CLIENT RETENTION

KEY REASON THREE CARE FACTOR: ZERO APPROXIMATELY 65% OF CLIENT LOSS IS DUE TO CUSTOMER PERCEPTION THAT THE BUSINESS DOES NOT CARE.

KEY POINT

CARE ABOUT YOUR CUSTOMER! Engagement with and loyalty to your customer demonstrates you care

MASTERS OF CLIENT RETENTION

THIS IS YOUR INVITATION TO TAKE 2 ACTIONS. (YEP, YOU THE READER, NOW IF YOU HAVE TIME)

ACTION ONE

ACTION TWO

Take a blank sheet of paper and make a list of instances

Elsewhere on a sheet of paper make a list of instances

in the last 12 months when you recall interacting with

a business, government department, health service,

education provider, service organisation or club where

your reaction was, ‘WOW, that was delightful!’ Your self-

your reaction was, ‘Agghhh! Please let me out of this

talk was something like, ‘I’m looking forward to telling

situation’. Your self-talk was something like, ‘I’m going

my friends and family about what I just experienced.

to tell my friends and family how awful that experience

They would love this! This has been amazing’.

was. My friends really need to avoid this person, experience, business etc. This has been terrible. I hate

My hope is that your sheet of paper does not remain

these guys’.

blank. I suspect that this list will be longer than the first.

MASTERS OF CLIENT RETENTION

IN HIS BOOK, “THE DNA OF CUSTOMER: HOW EMOTIONS DRIVE VALUE”, COLIN SHAW FROM BEYOND PHILOSOPHY GROUPS CUSTOMER EMOTIONS INTO FOUR CATEGORIES.

THE DESTROYING CLUSTER

THE ATTENTION CLUSTER

In this category customers feel stressed, irritated,

Customers experiencing these emotions are more

hurried, disappointed, unsatisfied and unhappy. At a

likely to increase their spend with you over the

minimum, the destructive impact of these reactions

short term. Emotions experienced within this

needs to be controlled as they have the potential to

cluster include stimulated, energetic, exploratory,

destroy businesses.

adventurous, indulgent and interested.

THE RECOMMENDATION CLUSTER

THE ADVOCACY CLUSTER This is where delight happens. Customers feel

This where long-term loyalty is built. These customers

happy, pleased, engaged. Without prompting from

will be loyal and will recommend your business when

you they take the time to advocate for your busi-

others ask for a recommendation. Customers feel

ness among friends, family and colleagues. Your

cared for, trusted, safe, honoured, valued and even

business becomes a ‘water cooler topic’ at the

that they belong.

office.

MASTERS OF CLIENT RETENTION

REAL WORLD EXAMPLE When businesses you are competing with are operating at the lower end of these clusters then disappointed customers are easier to source from competitors.

Some years ago my small, emerging, experiential education business found itself in competition with the proverbial ‘10 ton gorilla’ that was cashed up and aggressive. I discovered that their extraordinary spend on facilities, equipment and marketing could not match our more nimble, responsive and customer focused operation. Our team was carefully selected for their empathetic and engaging personalities (technical skills could be taught), our catering was of restaurant quality when far less was expected and the personalized, bespoke programming met the clients wants and needs precisely.

Our systems were built as a result of our careful listening to the voice of the customer, the mood of the marketplace and the enthusiasm & dedication of our team. We proceeded to successfully pick clients off the gorilla one at a time until there were literally none left. In fact the gorilla became and remains a client of that business to this day!

As a result of our focus on the ‘Recommendation and Advocacy Cluster’ emotions we proved that size really does not matter!

Would you like similar results for your business?

MASTERS OF CLIENT RETENTION

TO RECAP, THE 3 MAIN REASONS CUSTOMERS LEAVE ARE: What you can do about it even when it seems that customers are leaving due to factors

FACTORS OUTSIDE YOUR CONTROL.

outside of your control is to consider the human being at the other end of the transaction. Remember that whether it is B2B or B2C, people make purchasing decisions irrationally and then justify rationally so where possible apply some creativity and authentically engage and delight. Surprise in ways that over deliver and very

OPERATIONAL ISSUES

clearly say, “we appreciate you”. If you would like guidance on how your business

WITHIN YOUR CONTROL TO WHICH YOU MAY HAVE

could retain more of your customers, including the three most common reasons here plus many more, please contact us using the details below. Mention that you have read this guide and not only will you be entitled to a free strategy call

BECOME ‘STORE BLIND’.

but you will also qualify for one of our current massive incentive offers as a way of us saying we appreciate you! Of course there is no obligation to continue.

THE FEELING OR BELIEF THAT THE BUSINESS DOES NOT CARE.

We do guarantee that you will leave the meeting with some new retention tools that will help you be even more authentic and profitable.

MASTERS OF CLIENT RETENTION

GREG SMITH

CHIEF CUSTOMER OFFICER

MASTERS OF CLIENT RETENTION

Phone: 0429 872 386 email: greg@mastersofclientretention.com.au