There is a growing trend in business towards ‘customer retention’ programmes, which will only work if we replace the word ‘retention’ with ‘development’. If a company’s aim is to develop business with a customer, then the company may earn the right to retain that customer’s business. On the other hand, when a company’s aim is to retain business, then there is a suggestion that the company will try to hang on to what it possesses, and so its future will become dependent on its past.
The point is that no matter how much faith suppliers may place in ‘service’, their customers have little or no interest in the issue at all! Service, to customers, is no more than an entitlement. Once they receive service at a certain level, no matter how impressed they are with it at first, customers very quickly grow to see such service as being quite commonplace. Indeed, to customers the definition of ‘service pleasure’ is freedom from pain.
The real issue of interest to all customers is ‘future success’, usually concerning their organisation’s performance (e.g. sales, cost control, profit, etc.) in the short to medium term. The majority of incumbent suppliers do not address the issue of future performance, because they are content to be serving the customer’s current needs. The incumbent suppliers may well be searching for new business with prime prospects, but rarely do they engage in a search for new business with established customers. Many of us are guilty in this area, but we have to wake up to the dangers and opportunities at stake.
If we win business and then service that business effectively, we are not likely to hear complaints from the customers we serve. However, knowing that the customer’s key concern is future success and not the management of today’s business, what will happen if a competitor turns up and offers a service that relates to improved performance for the customer? In my experience, if the competitor plays his cards right, then he will win new business and then put himself in line to compete for the ‘current business’ too!
An example involves a customer who had a print company ‘serving’ his current business. The printer did a good job, he was responsive and the service offered was generally regarded as being ‘spot on’. However one day a competitive print company executive called the customer and said ‘We are a printing company, however I take it that your printing needs are being taken care of, is that correct?’ The customer confirmed this and the print man continued, ‘Well I don’t want to talk about replacing your current suppliers, but I would like to discuss how we can generate ideas to help achieve growth in areas that mean the most to you at this time.’ With this approach he gained an interview, one thing led to another and after two more visits he secured a small order in respect of an idea he had submitted - an idea designed to help the customer reach higher ground with a new project. The customer felt no sense of disloyalty towards his current supplier, and indeed the current supplier never even knew that a competitor had entered the fray!
The new supplier gained more ‘new’ business with ideas, and then he offered to quote on ‘current printing needs’ too, for now as a supplier to this customer he was in a strong position to attack the incumbent service provider. Attack he did and ultimately he won all of the customer’s printing business, and the silly part of all this is that the losing supplier had thought that the downturn in ‘orders’ was due to the customer’s business going sour!
The incumbent supplier’s level of involvement with the customer had been from the distance of a service provider, and not a success contributor. He did a good job and lost the business because that is all he did. Customers want more than good service, however they will rarely ask for more help - mainly because they have been conditioned to see suppliers as ‘administrators’ of current business, and not architects of ‘new business’.
Another example involved me as the customer, at a time when I was buying drinks from a liquor store. I had a long list of items to buy, to cater for my daughter’s engagement party; I explained this to the young man that ‘served’ me and he was very helpful. He asked to look at the list and then he said ‘I can read this, if you have shopping to do or calls to make, come back in 30 minutes and I’ll have this ready for you.’ When I returned he said ‘If you drive to the back of the building you will see our sign, I have two men there who will help put the order into your car. Very good service! Then on the night of the party, as the host I was asking people what they wanted to drink and I soon found we had failed to buy items like Guinness and the new ready-mixed drinks favoured by young people. I was a very unhappy host. I had succeeded in the store and failed in my home. The young man in the liquor store could have solved the problem, by doing more than just serve me. He didn’t and so he failed to sell more and his store has lost my future business! This is not the fault of the young man of course; he works for a company that is probably big on budgets but small on selling standards.
The lesson is to use the excellent service you provide as the platform for creating future success for customers. If you do, the opportunity is that business will improve. If you don’t the only thing you may retain is a memory of having once had the customer’s business!
Service Wins Business, Then Loses it! - To learn more about this author, visit John Lees's Website.
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John Lees
(Visit John's Website)
Former director of marketing & sales for
Schwarzkopf in Australia and NZ, achieving
market leadership (against the giants
'L'Oreal and Wella) and best operations
internationally for the organisation. Then
worked as a consultant to the German
company in the US, Canada, the UK, South
Africa and leading Western European
markets. These days operates as a speaker,
trainer and consultant...specialising in
sales & marketing. Author of 10 books on
business development and a member of the
Institiute of management consultants.
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