A recent study by the Tempkin Group found that it takes an average of five clients giving positive referrals for your business in order to get one new client. Yet it takes only two disgruntled customers speaking negatively about your business for you to lose one customer.
You do the math…that means it’s twice as important to ensure that you don’t have unhappy customers than it is to maintain good relations with your happy customers. This doesn’t mean you shouldn’t focus on the latter—of course you should. But it also means that if you don’t have a system that empowers or motivates your employees to solve customer problems, you may be feeling the negative impact on your business.
Most people don’t set out to dislike or become a detractor for a business. The reason this happens is when a satisfied or neutral customer encounters a problem or an issue that isn’t resolved. At that point there is an immediate decline in loyalty. However, if the problem is handled well, the customer’s loyalty increases above his or her original loyalty level.
The biggest determining factor as to whether a customer becomes or remains loyal after a problem is whether that problem has been resolved. Unfortunately, many times employees believe that they are resolving a problem, when in fact they aren’t.
This happens more often than you might think. Employees jump to a solution for the customer; quote company policy back to the customer; or go for the easiest solution, which is often a discount. The end result is an unsolved problem and a frustrated customer.
To ensure that your customers feel like their problems are resolved in a satisfactory manner, be sure that every employee follows an established process for customer complaint resolution. These steps should include acknowledging the problem, taking down facts, taking ownership of the problem, ensuring the customer receives a resolution to the problem and following up to make sure they are happy with the resolution. If one or more employees don’t follow this process, make sure there are consequences so that next time they will be motivated to follow the process.
It only takes two detractors to undo all the hard work and effort you put into building a positive image that results in one new business referral. You may want to consider spending as much time training employees in customer complaint resolution as you do in coaching them how to get referrals.
How does your business build a positive image?
What can you do if you notice a decline in customer loyalty?
What steps does your business take when resolving a customer problem?