Can you think of any better uses for the $312,500?
About 75% will do business again if the problem is resolved to their satisfaction.
90 to 95% will do business again if the problem is resolved on the spot.
Since mistakes are guaranteed to happen, how you recover from these mistakes will significantly impact on whether the customer will do business with you again. It is important to note that research suggests that if you recover well, your customers will stay with you. The faster you recover, if you can resolve the issue “on the spot”, your customers will be impressed and in all likely-hood reward you with their continued business.
Customers are willing to pay for quality service.
In a series of polls we conducted last year with about 1000 course participants, we asked where would they would prefer to spend their money.
Here’s what they said;
Where would you prefer to spend your money?
High Quality, Excellent Service, High Price 34%
High Quality, Excellent Service, Low Price 36%
Average Quality, Average Service, Average Price 2%
Low Quality, Poor Service, Low Price 15%
Non-committed 13%
These results compare very favorably with research we have reviewed that suggests that the vast majority -70%, of customers are willing to pay for high quality service. Obviously price is a variable, but service is a constant.
An increase in customer loyalty will have a direct positive impact on your bottom line.
Harvard Business Review conducted research which reveals that a 5% increase in customer loyalty can result in a return of 25% to 125% directly to the bottom line depending on your industry. It is safe to assume that investing time and resources to retain even a small number of your clients would pay for itself. You can do the math. Be conservative and take your gross profit and increase it by 25%.
The cost of poor service has a direct, negative impact on your bottom line.
Consider the time and expense associated with fixing problems, dealing with customer concerns, replacing product, re-working reports, and so on. Research from TARP (Technical Assistance Research Programs) indicates that, based on your industry, the cost can be significant.
The Cost of Poor Quality Service
Manufacturing Industry 20% - 25% of sales revenue
Service Industry 30% - 35% of overhead costs
Pick one of these two and do the calculation.
Wouldn’t you like to have this as profit, rather than as an expense?
The financial gains associated with creating a customer-focused organization can be substantial and well worth the effort.
To quote our friend Hamlet once again
To sleep: perchance to dream: ay, there's the rub;
In today’s highly competitive market place we really cannot afford to take the easy way out. Creating customer focus takes commitment, at all levels of your organization, a comprehensive strategy which targets leveraged actions which will positively impact customer perception, and the will, fortitude and financial support to make the changes necessary to be truly Customer-Focused.
Your customers will reward you if you choose to become a truly customer-focused organization.
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