May 15, 2014
Customers for life
By Dave Braun
LO President
Management consultant Peter Drucker says that the purpose of business is to create and keep customers. Most companies spend much more on the first part — finding new customers, than they do on keeping the customers they already have. But if we spent as much time, energy and money on keeping the customers we already have, we’d be much further ahead.
Something happened a few weeks ago that highlighted the meaning of customer service. My aunt recently bought her son a made-to-measure suit from Harry Rosen. They had his measurements on file and when my 6’7” cousin went to pick up his suit, it somehow didn’t fit.
My aunt called Harry Rosen’s head office to voice her displeasure. The very next day, she received a phone call from Harry Rosen himself, from his vacation home in Florida. Harry insisted that he HIMSELF would personally fit my cousin with a new suit the first Saturday he was back from Florida. My aunt explained that it wasn’t necessary, that my cousin be fitted by the founder himself, but Harry insisted, “I can’t afford to have an unhappy customer.”
The first Saturday after Mr. Rosen returned from Florida, the 83-year-old was, as promised, on his knees pinning my cousin’s pants in his Bloor Street store.
What is it that Harry Rosen understands about long-term customers? His philosophy reflects the book Sandler Management Solutions, Reference Book, 2008. First, the company knows that long-term customers tend to buy more products and services because they continue to learn about what the company has to offer. Second, long-term customers recommend a company more than new customers, because of the confidence they’ve built over time. Third, long-term customers also don’t require expensive marketing budgets. Lastly, as evidenced by my aunt, long-term customers let you know when they’re unhappy. They have a stake in the partnership and they give a company an opportunity to win them back before they disappear.
All told, searching for new customers is expensive. Companies can get into a vicious and expensive spiral with high customer turnover.
Depending on how long (or short) the relationship lasted, the financial penalty for replacing your lost customer may be even greater than the profits the customer brought you in the first place. The ripple effect produced by dissatisfied customers can indeed be very costly, when you also consider that his negative experience is often shared with others.
Customers appreciate dealing with people who are polite. But it’s pretty hard to ask our employees to be polite to our customers, if we’re not ourselves polite to our staff. If we create an environment that makes work more enjoyable and reduces conflict, it’s going to improve how our staff treats our customers.
Not unlike Harry Rosen, I’m now selling to the children (and sometimes grandchildren) of a number of my grandfather’s customers. Obviously, our companies are not in the same ball-park as the $300-million retail giant, and I’m not nearly as well-dressed, but we continue to do our best for the next generation.
My aunt’s anecdote provided me a wonderful reminder that no business can ever afford even one unhappy customer. Successful businesses are built upon a history of positive interactions with our customers and we’re only as strong as our last interaction.
LO President
Management consultant Peter Drucker says that the purpose of business is to create and keep customers. Most companies spend much more on the first part — finding new customers, than they do on keeping the customers they already have. But if we spent as much time, energy and money on keeping the customers we already have, we’d be much further ahead.Something happened a few weeks ago that highlighted the meaning of customer service. My aunt recently bought her son a made-to-measure suit from Harry Rosen. They had his measurements on file and when my 6’7” cousin went to pick up his suit, it somehow didn’t fit.
My aunt called Harry Rosen’s head office to voice her displeasure. The very next day, she received a phone call from Harry Rosen himself, from his vacation home in Florida. Harry insisted that he HIMSELF would personally fit my cousin with a new suit the first Saturday he was back from Florida. My aunt explained that it wasn’t necessary, that my cousin be fitted by the founder himself, but Harry insisted, “I can’t afford to have an unhappy customer.”
The first Saturday after Mr. Rosen returned from Florida, the 83-year-old was, as promised, on his knees pinning my cousin’s pants in his Bloor Street store.
What is it that Harry Rosen understands about long-term customers? His philosophy reflects the book Sandler Management Solutions, Reference Book, 2008. First, the company knows that long-term customers tend to buy more products and services because they continue to learn about what the company has to offer. Second, long-term customers recommend a company more than new customers, because of the confidence they’ve built over time. Third, long-term customers also don’t require expensive marketing budgets. Lastly, as evidenced by my aunt, long-term customers let you know when they’re unhappy. They have a stake in the partnership and they give a company an opportunity to win them back before they disappear.
All told, searching for new customers is expensive. Companies can get into a vicious and expensive spiral with high customer turnover.
Depending on how long (or short) the relationship lasted, the financial penalty for replacing your lost customer may be even greater than the profits the customer brought you in the first place. The ripple effect produced by dissatisfied customers can indeed be very costly, when you also consider that his negative experience is often shared with others.
Customers appreciate dealing with people who are polite. But it’s pretty hard to ask our employees to be polite to our customers, if we’re not ourselves polite to our staff. If we create an environment that makes work more enjoyable and reduces conflict, it’s going to improve how our staff treats our customers.
Not unlike Harry Rosen, I’m now selling to the children (and sometimes grandchildren) of a number of my grandfather’s customers. Obviously, our companies are not in the same ball-park as the $300-million retail giant, and I’m not nearly as well-dressed, but we continue to do our best for the next generation.
My aunt’s anecdote provided me a wonderful reminder that no business can ever afford even one unhappy customer. Successful businesses are built upon a history of positive interactions with our customers and we’re only as strong as our last interaction.
Dave Braun may be reached at dbraun@landscapeontario.com.