When you think about customer retention, you must work your butt off to get “top box” results on your structured feedback, i.e., surveys. And when you get verbatim feedback (unstructured comments), you must try and earn comments like “best,” “greatest,” “amazing,” and “outstanding.” In both cases, you must earn these accolades; no matter how good you think you are, you are not entitled to these results.
You will only enjoy the highest praise as a reward for consistent hard work by you and everyone in your business. Without these extremely outstanding results, your business is vulnerable to losing customers and the referrals that come along with them.
Why are we vulnerable?
Unless your customers are truly loyal, they are always open to a sales pitch promising something more than they currently get. We know they can get more because they are not telling you that your business performance is the ultimate they can imaging; they are not rating your business “top box”. Of course, people don’t always tell the truth and sometimes don’t know how well off they are when dealing with you. But they are willing to find out and you will then have to lose a customer, try and replace her, and possibly win her back with mutual feelings of uncertainty about the damage that may exist in your relationship.
How do we measure loyalty?
We can ask the following questions, which are usually considered strong indicators of loyalty:
- On a 0 to 10 scale, how likely are you to recommend XXX to friends and associates?
- On a 0 to 10 scale, how likely are you to continue doing business with XXX?
- On a 0 to 10 scale, how likely are you to increase your purchases from XXX?
- On a 0 to 10 scale, how likely are you to switch from XXX to another supplier? (In this case, a low number is good).
How good do we have to be to generate high levels of loyalty?
Let’s answer this question with an example. I think that on average I start my car 5 times per day, 365 days a year. Some days I run errands, the number is very large, and some days the car is parked in my garage because I am traveling. I think I turn the ignition key (its an aging car) about 1825 times per year. If the reliability is 99% (a historically “good” number), then 18 times per year it will fail to start on the initial attempt. If that were my experience, I would paint the car yellow and name it LEMON and tweet like crazy about my piece of junk. Since I cannot remember when it failed to start on the first attempt, I obviously enjoy much greater that 99% reliability.
The following table has three additional examples demonstrating that 99%, or even 99.5%, reliability does not come close to what we experience and need. Therefore, 99.5% reliability is still below our expectations!
This all means that your business must strive for perfection! I know it is a never ending quest, but anything less will fail to meet some customer’s expectations. This lesson has to be constantly, and positively, communicated to everyone in your company as well as key business partners.
And thus, the title of this post; good enough is no longer good enough!