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Marketing is the art of attracting potential
customers to your business. It plays a pivotal role in any
enterprise, there is something more important - the way people
are dealt with once they have given you their custom. We are
all customers, and should all understand the importance of
this point - yet the fact that we all have a range of 'bad
service' tales to tell shows that it is not a lesson that
has been universally understood.
The way we all feel and behave after
a bad experience as a customer makes it easy to understand
the following research findings:
- Most businesses will only hear
from 4 percent of dissatisfied customers. The others quietly
depart, many never to return.
- When asked why they had switched
allegiance from one supplier to an alternative, 68 percent
of customers said it was because of indifference to their
concerns by the owner, manager or an employee.
- The typical seriously dissatisfied
customer will tell ten people about their problem. It takes
up to 12 positive experiences to make up for one negative
incident.
- If their problem is resolved
on the spot, 95 percent of complaining customers will do
business with you again. And it costs the average business
six times more to attract new customers than to keep existing
ones.
There's no question of it: the most valuable
resource your business can have is a satisfied customer -
one that will recommend you to others, and will return to
buy again. It is easy to recognise this fact in the early
days of the Iife of a business - but all too often complacency
can set in.
This can be caused by 'success syndrome'.
Dan Scoggin, a former president of restaurant chain TGI Friday's
has described what can happen.
When a new business starts, everyone
is nervous. Will the venture succeed? The cost of failure
is so great that the business owners and staff can't do enough
to look after the customers. All efforts are focused on rewarding
each customer and this works - they come back.
Once the business has been trading successfully
for a year or so everyone's efforts are paying off. People
gain in confidence; they have all the business they can handle.
OK - maybe you did upset that last customer but no matter:
another one will be along soon...the success syndrome is up
and running!
The next stage of the process sees service
quality falling and the managers will probably be the last
to notice. Repeat custom falls, sales are harder to win. The
temptation is to blame it on new competition, the weather,
the recession - any respectable-sounding explanation will
do. It's time to start controlling costs - lay off some staff,
cut costs on the product.
Finally stunned into action by plummeting
figures, the managers try some costly advertising, cut price
specials and all the traditional lures of the marketer - but
the customers who had a bad experience just won't come back.
This syndrome hit TGI Friday's in its
early days. They opened seven restaurants in quick succession:
they were hugely successful launches with people queueing
out of the door, yet within six months, in each outlet business
had fallen by 50 percent.
The problem was that they had not been
looking after the customers - flushed with the arrogance of
success, they had failed to reward them. The prosperity of
a business arises from the behaviour of customers, and this
is dependent on how the individuals in the business treat
them. Look after them properly and they'll come back fo more.
Don't, and you're out of business.
Can it really be that simple?
It's easy to measure the success of
an enterprise by today's management reports - look at the
sales, the margir the net profit we're making! Yet those are
often the result of efforts initiated months or years earlier.
If the product and service quality that brought you all the
custom deteriorates, it will not be evident in the numbers
at once, but without satisfied customers you will soon be
out of business.
Francis Rogers, former head of marketing
at IBM has said 'the secret is to understand the customer's
problems and provide solutions so as to help that customer
be profitable and feel good about the transaction'. Or, don't
aim at making sales, focus on meeting people's needs. This
is not a Utopian dream. It is the only way to guarantee continuing
business success.
Go to
part five
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