By Cathleen E. Rossiter, PCS
How often, as a client, have you experienced the sense of disconnection with the particular company you happen to be dealing with at a particular moment? How often do you become frustrated when you just can’t seem to get the company’s representative to deal with you on a personal level, to break away from the official script and listen to what you are asking? How often, as a business owner, do you apply these experiences to the way your company provides service to its clients?
More times than I care to mention, I have been in the same position and experienced the same frustrations. Oftentimes I just bear it (grinning never entering into the equation) thinking that there is no point in taking my business elsewhere as “they’re all the same”, biding my time until someone else comes along with a better offer that will make the lousy treatment somewhat worthwhile. I am no shrinking violet, however. I have no qualms about taking my business to a competitor who will treat me properly; with the respect I deserve (reporting my dissatisfaction to the Better Business Bureau, et al). I am the client who silently slips away, because experience has taught me that if someone will not listen when they have my attention, they will not listen when they’ve lost it. A company that will not treat me with the respect I deserve 1.) will not notice that I have taken my business elsewhere, and 2.) will not care why.
Experiences such as these have made me keenly aware of the level of service I provide to everyone I meet. As business owners, it is ever more critical to pay close attention to the service provided by one’s company. It is critical that, as business owners, we place ourselves continually in the shoes of our clients in order to keep a loyal client base by paying attention to, and meeting, their individual needs. As noted in an article in Spoken Communication (http://blog.spoken.com/2010/10/cost-of-acquiring-a-new-customer-6-to-7-times-more-than-keeping-exisiting.html), the financial benefits alone are incentive enough to build strong, working relationships with each client. The most staggering statistic of the bunch was the phenomenal increase in profits that come from increasing client retention by as little as five percent – a five to ninety-five percent increase in profits.
According to the article referenced above, it costs up to seven times more to attract a new client than it does simply to embrace a current client. Client Acquisition Cost = Total Acquisition Expenses /Total New Clients. In order for you to get a clear picture of how valuable your current clients are to you, look at your Client Acquisition Costs in relation to how much revenue each new client brings in and how long new clients generally stay with your company. Now compare that to the revenue your existing clients bring in (not forgetting the value of their Word of Mouth advertising and referrals) as well as their longevity with your company and the amount of money spent on retaining them. In today’s economic environment, how much sense does it make to throw money out the window chasing possibilities rather than keeping the same money in the bank maintaining tangible assets? This is not to say that attracting new clients is unnecessary, as that would be foolish. This is merely to demonstrate how easy it is to overlook the true value of the clients your company has already acquired. Look at your own numbers and see how much you could actually be doing to build your business with the savings.
A key to superior client relationships is the motivation behind the relationship. If the motivation is strictly financial (and, clearly, this is a strong motivator), the authenticity of the relationship will be lost and the lack thereof will be immediately noticeable to one’s clients. Another critical factor in establishing and maintaining superior client relationships is that the motivation, desire, and initiative in doing so comes from the very heights of the company and filters down through every person in every department. In this way, the authenticity of the relationship is maintained at every point of contact, building confidence and trust with each client. Confidence and trust are key components of client loyalty, which as we have just learned, is a truly valuable asset.
Copyright © 2012, Cathleen E. Rossiter, PCS
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