Poor customer service will do the trick every time.

Just in time for the holidays, you can call me the Marketing Grinch. Yet within the not-so-cheery headline above is a sizeable gift.

The 82 percent loss has nothing to do with the economy, joblessness or the weather. Plus, it’s within yourimmediatecontrol.

And the evidence is irrefutable. You can look the other way, point fingers or say, “That doesn’t apply to me.” But be assured, none of us are immune to this silent, stealthy business killer. First, a hint or three…

Sales Drain: True Stories

1.A friend in a large metro area e-mails me for a contractor recommendation. Says he wants in on the tax credits. His water heater is too small for his busy household and his largish 23-year-old home still has its original furnace. He calls my hand-picked referral, literally ready to buy.

The CSR abruptly says she’s “real busy” and asks if HE can call back later. After this customer-repelling treatment, he actually does call back, gives his info to the same CSR (who never asked the lead source).

He politely requests a call from the owner/manager about another matter. After four days with zero re-contact, my friend calls Company No. 2. He spends $9,200 on a furnace, air-conditioner and a tankless water system. Company No. 1 eventually calls and says he “just got the message.” That’s not the only message he got. He had no idea my friend manages the district for a home renovation lender.

2.I had a high-pressure hose made for one of my old automobiles. Thankful to find this company, I pay for the hose and have it installed. It leaked. Paid to have it removed. Without complaint, I return to the parts builder for replacement or refund, didn’t matter to me. Very angrily, he pops open the cash drawer, hands me 25 wadded dollars, scowls and says, “You can take your money and lose my address.” (That’s an exact quote.) Remarkably, I was speechless. He has no idea that I’m in a local club of 80 old-car owners, representing 140 cars, all needing his services.

3.A family moves into a home after an eight-month renovation. The wife is a very astute buyer, very vocal, very active locally. She’s in need of full insulation plus higher-end fixtures for her gourmet kitchen to replace the “quickie” ones installed to pass inspection. She finds a company to quote on both and tells them the story. Plumbing tech arrives and says, “I can’t believe somebody would put this ‘crap’ in a kitchen this nice. Hope you didn’t pay too much for ‘em.”

Shocked and insulted, she’s handed a quote she’ll never use and covers her disappointment with, “Let me get back with you.” (Ever heard that one before?)

At her next week’s “New Old House” dinner party, she humorously explains the “crap” fixtures comment from the “plumbing company she’ll never call again” to a dozen or so wives. Presumably, most in that crowd will never call that company either, nor will the ones who follow her Facebook page with near-rabid fervor.

What’s the common denominator? Note there wasn’t one technical glitch, no price issues, no marketing problems. None of that “obvious” stuff that gets our attention.

The cause was rotten customer service.

Rudeness, shortness and the inability to show concern killed these sales. Yet the lost sales were magnifiedseveral timesby two additional factors:
  • Each person represented dozens more. The lender friend actually keeps a very short list of approved contractors. This could’ve been a six-figure phone call.
  • The owners probably still don’t know “why” these jobs didn’t come in, and will never know the untold fortune that walked away, never to return.

    In case you were wondering, these sales disasters are not alone.

  • Numbers You May Not Want To See

    According to the year-longCustomer Experience Impact2010 report from Right Now Technologies, poor customer service may be killing you from the inside. Consumers have less patience for rudeness, and they have more options and more ability to turn crowds than ever before. Do not take this lightly.

    The report shows that 82 percent of consumers have terminated business with a company due to poor customer service. The reasons are very basic: rude staff (73 percent) or inability to resolve problems in a timely manner (55 percent).

    Are you and I any different? Be aware, the sales drops are not limited to the economy. In fact, 79 percent of customers shared their negative customer experience in public and among friends. This is up sharply from 54 percent just five years ago, largely due to online reviews and “instant” ranting power available.

    In the “old days” (like 10 years ago!) a customer may tell his immediate circle and it would die a month later. Today, your rudeness gets reported instantly, with a life as long as the flames allow.

    Expectedly, this reduces your lead acquisition rate, driving that cost up as well.

    Any Good News, Grinch Man?

    Of course. The inverse is also true,especiallyfor plumbing. Why? Though bad customer service repels customers, it doesn’t make them quit using their plumbing. So great customer service companies are enjoying banner sales, even in this economy.

    Our top clients, setting sales recordsnow, have one marketing element in common: a commitment to customer retention, which is directly linked to customer service. Hard to have one without the other.

    It gets better. TheCustomer Experience Impactalso reports that 85 percent of customers will pay 10 percent more for a better customer experience. And 45 percent are willing to pay up to 15 percent more.

    Wait! I thought all customers were chiseling cheapskates who don’t know the value of good service? Guess I was wrong. In fact, 55 percent of customers are attracted to a company’s “good customer service reputation.” 

    Bad customer service silently kills sales, referrals and response rates. Plus, it multiplies in the night. In truth, not investing in good customer service costs much more than paying for it. Numbers don’t lie.

    Now, back to the cheapskates. Guess how many customers resulted from “actual or perceived lowest prices?” A lowly 7 percent. Good. We collectively ask that group to please call the competition.

    Quick Customer Service Improvement Plan

    1. Communicate.Service begins with, “How may I help you?” It’s two-way; listeningthenresponding. Don’t say everything you think (called “editorializing” among customer-service trainers). Get a negative comment? Address it positively. Confirm resolution. A smile and friendly demeanor should start and finish every conversation.

    2. Commit.“Meeting expectations” is minimal; exceeding them gets remembered. From CSRs, to sales, to billing, to techs - all must commit to customer service. Three quick requirements: pride in work; ownership of problemandsolution; and learning from experiences and sharing with your team. Make customer service a culture in your company.

    3. Differentiation.Great customer service instantly separates you from the pack. Force differentiation in your marketing: how you answer the phone; appointment confirmation; thank-you card; newsletters; Facebook accolades; gift after service; and referral program. Any and all add up to a “different” experience for customers that they will remember.

    So please, don’t let the silent killer of bad customer service create a recession in your business. Follow unclosed sales and find out “why.” Be a student of good customer service, recognizing good from bad and implementing only the best. Your payoff comes as “good” is repaid with “more.” I hope this information serves you, my customer, well.