Transcript Reasons for Lost (non returning) Customers

Service Quote

Closing a sale is like getting a single in
baseball. All it does is put you on first base.
The only way to advance and score in the
game of selling is to give service.
Sales Upbeat, Nov 10, ‘94
Service Quotes
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We are in business to exceed customer
expectations (West Central Co-op mission
statement).
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People are loyal to people who meet their
expectations. This is true not only in
business but also in our personal lives. (Jim
Magnuson)
Not Coming Back?
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According to Reece and Manning (Selling
Today), which of the following is the most
common reason for ‘lost’ (non returning)
customers?
a)
b)
c)
d)
e)
Too high of a price
Poor product performance
Poor customer service
Customer retirement or death
None of the above
Don’t Complain About Complaints?
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Joan, a new sales rep for Agri King, has
been told during a sales training session that
she should welcome customer complaints.
She always thought customer complaints
were a ‘bad’ thing. Why does her supervisor
view complaints differently?
Sell It or Bag It?

Randy, the meat department manager at a
HyVee grocery store, has just complained to
Amanda, the Hormel sales rep for that store.
His complaint suggests a relatively new
Hormel product introduced to him by Amanda
is not selling as well as he thinks it should.
How should Amanda respond to Randy?
What Do Farmers Want?
According to recent
survey results by a
prominent crop input
supplier, rank the
following from least
important to most
important to crop
farmers in determining
their level of satisfaction
with their supplier.
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Agronomic knowledge
Billing/invoicing
Deliver what was promised
Delivery of products
Earns your personal trust
East of doing business
Range of products offered
Responsiveness to my service needs
Quality of custom application
Value for price paid
I Remember a Time When . . .

Think about a time when you received either
excellent or very bad customer service
treatment. What were the specifics of the
incident? What did you do shortly after the
incident, if anything? Do you believe the way
you reacted was typical?
Don’t Be ‘Chicken’?

What is company policy for handling a
customer complaint about product quality for
the Perdue Company (large national chicken
selling company)?
The Key to Profit?

According to a prominent Harvard Business
Review article (“Putting the Service-Profit
Chain to Work”) what is the key to profitability
for most companies?
Until Death Do Us Part?

John is a sales manager for Central Iowa
Motors. He is trying to calculate how much
his company can afford to spend on
customer service in order to keep a
“customer for life”. How should John
calculate that? What suggestions could John
give his sales reps for providing excellent
service?
Customer Service and Expectations
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“All discontent is relative to expectations.”
Customers buy in expectation of receiving
benefits; if actual or perceived benefits fall
short of expectations, the customer is usually
unhappy.
The salesperson should make sure that the
customer’s expectations are not only met,
but also exceeded!
Promise a lot, but deliver more.
Service and Follow Up is . . .
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That part of the sales process that creates
the best opportunity for repeat business
Critically important to both new and
established customers
Becoming the primary value-added function
in selling
The best way to enhance a business
relationship
Service and Follow Up is . . .
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The main thing that makes the customer feel
he/she made a good purchase decision
Is the consummation of the deal
Is often a team effort (involving receptionist,
billing department, delivery staff, etc.)
What you and your company do for the
customer after the sale is made
Reasons for Lost (non returning)
Customers
Reason (concern)
%
Price
10-15
Product
12-15
Service
50-70
Source: Reece/Manning
Customer Service Research Results
Satisfied customers:
 good experience => they tell 6 others
 Excellent experience => they tell 12 others
Dissatisfied customers:
 Only about 1 of 25 complain to the company
 On average, tell 8-10 others
 About 95% will continue to buy if complaint handled
well
 On average, tell 5 others if complaint resolved well
 4-5x as costly to regain a lost customer as keeping a
current one
Customer Service Research Results
Conclusions ?
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Be thankful customers complain so you can fix the
problem and prevent ‘the cancer’ from spreading
If you don’t have repeat business, soon you won’t
have any business
An estimate of the importance of repeat business is
“customer lifetime value” = present value of expected
future profits from doing business with a customer
Providing Excellent Customer Service
is . . .
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Following through on all of your promises to
the customer
Delivering your product/service
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On time
At right place
In correct quantity and condition
Installing product properly
Interpreting warranty
Providing Excellent Customer Service
is . . .
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Assisting customer with payment/financing
arrangements
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Training customer on use of product
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Being available to answer any
questions/handle problems
Some Little (?) Things a Salesperson
Can Do to Provide Excellent Service
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Follow up visit (not to sell again, but to check
on previous sale)
Maintain positive, helpful, friendly attitude
Give customer something they didn’t expect
Make customer feel important and know
them by name
Some Little (?) Things a Salesperson
Can Do to Provide Excellent Service
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Be there at or shortly after delivery
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Sends message you stand behind your product and your
word
Makes sure you are instantly aware of any delivery
problems
Can clear up any customer confusion about product or
misunderstandings
Thank customer, commend them, and invite any
questions/feedback (via letter, card, e-mail, phone)
Dealing with Complaints
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Let customer explain without getting
defensive
Maintain positive attitude and listen
Do not offer excuses or alibis
Apologize and explain what happened (in
person is best)
Remedy problem/make it right
Remember customer perception is key
McDonald’s ten commandments for
customer treatment
1.
2.
3.
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5.
The Customer is the most important person in our
business.
The Customer is not dependent on us – we are
dependent on the customer.
The Customer is not an interruption of our work; but
the purpose of it.
The Customer does us an honor when calling on
us. We are not doing the customer a favor by
serving him/her.
The Customer is part of our business, not an
outsider. The Customer is our guest.
McDonald’s ten commandments for
customer treatment
6.
7.
8.
9.
10.
The Customer is not a cold statistic, but flesh and
blood: a human with feelings and emotions like our
own.
The Customer is not someone to argue with or
match wits with.
The Customer is one who brings us his/her wants.
Our job is to fill them.
The Customer is deserving of the most courteous
and attentive treatment we can provide.
The Customer has the right to expect an employee
to present a neat, clean appearance.
Perdue Policy
If a Customer Complains
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The customer:
1.
2.
3.
4.
Is mailed a letter of apology
Is asked to fill out a questionnaire with regard to
the problem
Is called by a corporate VP
Is given a coupon for a FREE chicken
“Putting the Service-Profit Chain to
Work”
A 5% increase in customer loyalty can boost profits
by 25% to 85%
Some companies (e.g. Xerox) have found very
satisfied customers are 6 times more likely to
repurchase with the company than satisfied ones.
Lifetime revenue streams can be:
$8,000 from a loyal pizza eater
$332,000 from a loyal Cadillac buyer
$ billions from a repeat aircraft purchaser
The Service-Profit Chain
Company profitability
Company loyalty
Customer satisfaction
Value & service
Employee productivity
Employee satisfaction
(Source: HBR,
March-April, 1994)
Customer Service – Summary
Comments
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Service is the last step for this sale, but it’s the first
step for getting the next sale
Sometimes the best offense is a great defense
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Offensive selling  pursuing new accounts
Defensive selling  providing excellent service to keep
current accounts
“Caveat Venditor” “Let the seller beware.”
Providing excellent service:
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Can be the most fun part of selling
Can be something that distinguishes your product
Is the one main thing over which you have total control
Service Quotes
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A salesperson should learn this from a sheep farmer:
you can shear a sheep many times, but you can skin it
only once.
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Caveat emptor → let the buyer beware.
Caveat venditor → let the seller beware.
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Delivery is more than unloading the truck. It’s carrying
through on your promises. (Personal Selling Power,
’92)
Service Quotes
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No sale is ever final. (Jim Reichart)
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Well done is better than well said. (Ben
Franklin)
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There are no traffic jams if you go the ‘extra
mile’. (Jim Cathcart)
Service Quotes
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If you don’t have repeat business, soon you
won’t have any business.
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All discontent is relative to expectations.
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Promise a lot, deliver more.
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Undersell, over deliver.