Wednesday, July 6, 2011

Renew your Customer Focus: New Financial Year Resolutions

While other businesses are focussing on finalising accounts, setting targets, and reviewing expenses, we suggest that you turn your main attention to something that matters more than any of this - YOUR CUSTOMERS. Remember why you went into business in the first place? Most likely to serve customers and contribute something to society. And did you realise that the strongest predictor of a business' future success is their customer satisfaction levels? (Not how orderly their books are!)

Here are 7 things to start doing right now...

Understand the Lifetime Value of Each Customer
Don't worry about perfection but get a rough understanding of the;
  • Avg Order Value x
    No. Times Per Year a Customer Orders x
    No. Years a Customer Stays with You x
    Average Gross Profit Margin x
    No. New Customers Each Customer Refers
Knowing this number will probably make your realise how important the other things are, as well as how much you can spend on customer acquisition.

Provide Awesome Service
This goes without saying and is obviously easier said than done! But it's amazing how many months (or years) can go by without us stopping to think - "what could we change to improve the customer experience?" Block out an hour to think about how your processes, facilities, products, or anything else that could be improved.

Get Reviews and/or Collect Feedback
Remember the saying, "what gets measured, gets managed". Ensure you're either collecting feedback internally, or preferrably encouraging online reviews (you get all the benefits of internal collection plus the SEO and marketing benefits). This creates a feedback loop and keeps your focus on customer satisfaction.

Improve the Way you Handle Feedback
When someone takes the time to review your business, call with a complaint, or mentions you online, please show them some respect and respond! Even if their feedback is negative, you can often turn the situation around and a lost customer can become one of your biggest advocates. See our tips for responding to negative and positive reviews here.

Build a Customer Service Culture
Let everyone in your organisation know that each customers' experience matters. Keep the focus high by congratulating staff when they provide good service, celebrating good feedback (print out and pin up your reviews), and make customer service part of everyone's KPI's (even if their customers are internal).

Track Customer Sources
Being smart about customers requires knowing where they're coming from. This is usually as simple as asking each new customer how they heard about your business. Set up a field in your computer system, a column in your bookings sheet, or some other simple method. If it's too difficult to do in an ongoing manner, decide to spend a just one week focussing on this question to get a reasonable snapshot. (When Misty's 1950's Diner did this, she found that one-third of her revenue came from customers that had found her on WOMOW).

Keep Communicating with Customers
Once customers walk out the door, don't let them forget about you. Keep your business top of mind by communicating with them and showing them they matter. Send them a special offer, update on your products/services, information they might find useful, check on whether they were happy with your product/service, thank them for their patronage (maybe with a gift), or find some other excuse to keep in contact. If you don't already, collect their email address so that you can stay in touch easily. A fancy email newsletter is nice, but an informal message (that is quick to prepare) can be just as effective.

Customers are the whole reason for a business' existance - so keep your focus on things that actually have a positive impact on your customers.