Wednesday, January 26, 2011

How I find the RIGHT type of Customers for my Business

Sorry, this blog update has moved.

>> Please click here to read this article <<

Australian Consumers Demand Better Service
(but grant second chances)

When it comes to customer service, it turns out that we Australians are some of the the least tolerant customers in the world - second only to Mexicans. In fact, almost 9 out of 10 Australians say they would stop using a business if they receive bad service! Just the punch in the face you needed? Don't worry, it's not (quite) as bad as it sounds...

A recent survey(1) explored preferences and attitudes of customers from Australia and eleven other countries. The findings show that 28% of Australian customers are only willing to excuse one service lapse before blacklisting the company. However, a large portion of Australians (48%) will allow two poor customer service experiences before deciding to end their relationship with the business altogether.

This prospect of a ‘second-chance’ provides businesses with a great opportunity to improve the service and provide more value to their customers. Most reasonable customers understand that there are occasional lapses in the level of service delivered, but if customers realise that a bad experience is an exception rather than the rule, they will be much more understanding and inclined to give the business another go.

The research also found that customers are more forgiving of poor service if they've generally experienced good service with the company over time. This finding highlights the importance of building lasting relationships with each customer and understanding the value of each customer rather than just the transaction.

The Barometer also shows that contrary to popular opinion, a good service experience has a greater impact on customers than a negative one. Consumers are more likely to give a company repeat business and to speak positively about the company after a good service experience (96%), than they are to never do business with a company again (88%) or speak negatively about the company (89%) after a poor experience.

This brings us back to the importance of collecting feedback. Your satisfied customers are usually very happy to refer your business to others (either verbally or online) for nothing more than the gesture of goodwill towards their friends and the business. This feedback then not only brings new customers to the business, but also reduces the impact of a poor customer experience.

Surprisingly, the study found that when bad service is received, Australians are unlikely to provide direct feedback to the business. In fact, compared to the other countries, Australians are among those who are most unlikely to speak to the business’s owner or manager about the incident and even less inclined to write a letter or an email to the company. So you can't rely on customers proactively telling you they're unhappy, you need a system for collecting their feedback.

After experiencing poor service, 35% of Australians say they will post a comment online such as a blog or social networking site. Although is not such a high proportion, it is incredibly influencial when you consider that 90% of people go to the internet first when they need a product or service! It’s therefore extremely important for businesses to have a great track-record online.

When things do go wrong, the study found that the most important thing a business can do is to acknowledge the mistake. In fact, more than half of Australians rate financial compensation second to that of an apology. An apology can go a long way in making a customer feel that their problems are being addressed and that they are valued and appreciated.
So, to make amends for a poor customer experience:
  • Acknowledge the poor service and provide an apology. Ideally, this should be done by the person at fault, or by the manager / owner.

  • Plan, plan, plan. Have a plan to deal with unsatisfied customers. This should be something the business owner or manager discusses with all employees. It only takes one employee to turn a good experience into a bad one and vice versa. Every employee has the power to build or destroy relationships.

  • Resolve the issue speedily, effortlessly and courteously. Consider the value of the customer rather than the transaction.
Yes, we're a picky bunch but let's face it, it's not that hard to get right most of the time and make amends when we do slip up. Come on businesses - let's rise to the challenge of servicing a nation of hard-to-please consumers!

Find out more about promoting your business with word-of-mouth.

(1) Conducted by the American Express Global Customer Service Barometer

Friday, January 14, 2011