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Why a Satisfied Customer is Bad News for Your Brand

Written by: Ed Delia

Article Overview: According to a recent seminar I attended called “Attrition Busters,” a “Satisfied Customer” is eight times more likely to switch to a competitor than a “Delighted Customer.”

Why a Satisfied Customer is Bad News for Your Brand

According to a recent seminar I attended called “Attrition Busters,” a “Satisfied Customer” is eight times more likely to switch to a competitor than a “Delighted Customer.” When one of these “Satisfied Customers” leaves, you’ve just lost recurring revenue. You can make excuses about why that customer left: they were always difficult, they weren’t a growth account, or it was only a matter of time. Or you can face facts: replacing customers is very expensive.

According to Bob Harris, president of Attrition Busters, the cost to replace $1.00 of recurring revenue in the average service business is approximately $33.00. In the insurance/finance services business, that cost is estimated to be $57.00. And in the telecommunications business, replacing $1.00 of recurring revenue costs approximately $84.00.

Most unhappy customers will never come forward and indicate that they are less than satisfied with their service. Mr. Harris noted that about 96% will never say a word. They’ll literally just disappear and move on to the next service provider.

And when one from the small but vocal 4% comes forward with a complaint, on average, says Mr. Harris, “An additional 26 silent customers have the same complaint.” The flaw in our thinking with regard to this vocal minority is that most of us consider them to be isolated cases. “Oh, it’s Bob Jones again. What the heck does he want now?”

These “bad” customers, however, are in truth our best friends. Instead of complaining about them, we should thank them with the utmost sincerity. They’re giving your business the greatest gift of all–honest feedback on what’s wrong. As Mr. Harris rightly noted in his presentation, “The customers we lose hold the information we need to succeed.”

So, when that complaint comes in, jump all over it. Ask lots of questions, and really listen. Show them with decisive action that you got their message loud and clear. This is how you delight a customer and turn your worst complainer into your most loyal advocate. And this is why being relentlessly brand conscious is so important.

Branding tactics help to remind customers why they are doing business with you in the first place. Without that reinforcement, they will eventually find excuses to drift off to the competition. This is why I believe branding is more valuable in retaining the customers you already have, than in attracting new ones. Just like customer acquisition versus customer retention, brand loyalty is easier to maintain than it is to create.

Every now and again, I hear a lot of tough talk about firing customers. And it does seem justified when a customer is bringing down the morale of your company in some way. But it’s flat out wrong.

Customers are too valuable, especially the ones that push you to be better. Why on earth would we ever want to fire one? Oh sure, sometimes a customer just isn’t a good fit for your company. You just aren’t structured to efficiently provide what they need. But that’s not a service problem. That’s a sales problem. You probably took on their business without thinking through your ability to keep them happy. You didn’t listen to that little voice in your head that said, “Walk away from this one. You’ll never get along.”

There are other “walk away” scenarios–like when a personnel change within a company brings in a contact that wants you out and his supplier in. But barring this type of scenario, a bird in hand is always worth two in the bush. It’s always easier to improve upon a customer relationship than it is to establish a brand new one.

So how can your brand delight customers? First, remember that your brand is not just a name. Your brand is your company's personality. It's your core identity and the way you are perceived. So the way to delight customers is to leverage your unique brand identity at every point of contact. Stand for something your customer truly values, and always reinforce the reasons they are doing business with you in the first place.

How are you delighting your customers? How are your branding tactics contributing to heightened levels of customer loyalty? Go to www.eddelia.com and let’s have some exchange. First, however, set aside whatever you’re doing, pick up the phone, and reinforce your brand identity right now. Call a customer and thank him or her for the opportunity to be of service. I guarantee you’ll be glad you did.

About the Author: Ed Delia is President of Delia Associates, a Whitehouse, NJ-based firm that helps sales and marketing executives from mid-market companies leverage brand awareness and technology to achieve market leadership. He is also the author of Brand Matters, a monthly e-newsletter featuring current commentary on brand-related topics. Ed is a frequent speaker on the subject, and has delivered numerous talks on branding, creative thinking, and technology-driven marketing communications. To request Ed as a speaker, go to http://www.delianet.com/speaker.html.

Links:
Delia Associates: www.delianet.com
Articles http: www.delianet.com/newsletter.htm
Ed Delia's Blog: www.eddelia.com

For additional information, please see contact:
Delia Associates
295 Route 22 East, Suite 102w
Whitehouse, NJ 08888
T. 908-534-9044
edelia@delianet.com

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