A Startup Guy

Have you ever heard the term “Fair Weather Fan”? Those are the sports fans who love a team when they’re up and turn on them when they’re down. Funny thing! You often see the same thing in business. My grandmother was a loyal JC Penney customer for decades. Once she was on an extended trip to visit family (4 weeks) and during that time her Penney’s credit card bill came due. She didn’t get the bill because she was away. It was all of $3.50. Just before returning home she went shopping at Penney’s and learned they had cut off her account. She had spent thousands with them over the years and they cut off her card for a mere $3.50 that was just a couple of weeks overdue. I’ve even had a utility turned off because I mistakenly underpaid my bill by $2.00. I’ve heard of banks charging customers $35 NSF fees for $0.30 overdrafts.

I’m not suggesting that businesses should let customers run roughshod over them. And I’m not suggesting that customers should shirk their agreements. But sometimes, life happens and customers have a problem. And a little flexibility and loyalty on the part of a business could go a long way to earning long-term customer loyalty. And in this day and age, customer loyalty is getting harder and harder to find. In part, because it’s not returned by companies. I’ve heard the phrase “customer loyalty” used in business discussions for years. I can probably count on one hand the number of times I’ve heard businesses discuss loyalty to their customers.

So, how do you institute loyalty to customers? Here are a few ideas:
1. Love your customers: This one sounds a bit silly, but there are actually many businesses out there who don’t really love their customers. They realize they need customers, but they could care less if you walk through the door or if it’s someone else; just so long as a warm body comes in. I’d rather go somewhere they’re genuinely happy to see ME. In my town there is a great store just off the downtown square named The Country Gourmet. They LOVE their customers. They know us by name and they even save bubble wrap for my 4-year-old son who loves the stuff. I visit them often just to say hello… and I almost always spend money, no matter if I was planning to or not. I just love them!

2. Allow team members to use their judgement: If you can’t trust your team’s judgement, why did you hire them? Allow them to determine (at least in reasonable cases) if something should be handled a different way. “Uh, boss, are you sure we want to cut this long-time customer’s credit line off over $3.50?” Most of these issues arise due to strict corporate policies. “Company policy is….” If this statement comes up in your business frequently, you have a problem. Some company policies are necessary. Many are simply a crutch to give employees an excuse to not make a decision.

3. Figure out what your break even point is and don’t haggle about money below that: I used to work customer service for a major national book distributor. We had a standing rule there, if the customer is resquesting a credit under $5, just give it to them. The hassle factor, time needed to research issues and aggravation factor for customers cost way more than five bucks. It was cheaper for the company to just resolve the issue immediately, removed a workload that would bottleneck more serious issues and simply made the customer happier to just handle it. “You got a defective paperback in your shipment? Nah. Don’t waste money returning it. I’ll just send you a credit.” Problem solved. Compare that to my utility issue. I made a small error, and over $2 they cut off my utility, made me go through the aggrivation of aruging with them over it, made me wait to have it turned back on, then charged me a $40 reconnect fee. If utilities weren’t a monopoly, I’d have fired them that day.

How does your company practice loyalty to customers? Share your tips and ideas in the comments section.

Going Out of Business courtesy of reinvented via Flickr

I remember several years ago reading an article reporting on the results of a study showing that consumers will put up with poor customer service almost as much as they will good customer service. I was appalled at that assertion. Why in the world would people put up with bad service? Surely good service wins the day every time. Turns out – no, it doesn’t.

After years of watching people in retail settings, I’ve discovered that they actually will put up with bad customer service. We’ve all seen restaurants with terrible service, but doing a booming business because they’re trendy. What people won’t put up with is inconsistent service. Good one time and bad the next will quickly lose you customers. Customers might deal with it for a short while, but not long.

I used to be a manager at a fast food restaurant. I remember once deciding that I wanted to deliver service so good for customers that they would want to tip our workers (voluntarily), just as they do at a full-service restaurant. For weeks I busted my tail, delivering great service at the counters and even going to table offering to get refills and take trays. People were impressed with the service, but I didn’t see them coming back more than usual. Now, I’m older and wiser and realize that what I was doing was terrible. I was probably inadvertantly hurting the restaurant. Why? Customers weren’t getting consistent service. They were used to a certain level of service, and I was confusing them with something different. Worse yet, a customer could come get great service from me one evening, then come that for lunch the next day and get mediocre service. They couldn’t know what to expect.

I still believe that good service is better and than bad service. All things being equal, I think good service wins the day. However, inconsistent service will kill your business faster than either.