Why do customers leave? That's a great question with a million answers, and really, we're jumping the gun to ask that question first. The first question should be, when do customers leave? According to TARP (Technical Assistance Research Programs, Inc.) 91% of customers who have a problem but say nothing about it end up leaving. While 82% of customers who voice their issues and get them resolved quickly return for repeat business (and are probably among the most loyal customers!)
If you've been around customer service for any period of time, you have probably seen these statistics before. They've been around for a bit. While the specific numbers may have shifted up or down over the years and they may look different for various markets, the principle is still the same - active listening and quick resolution breeds loyal customers. Pretty simple formula, right? Maybe. Let's break it down and see what this is all about.
"Proactive? I thought you said, 'Active listening'?" I did. I changed it, and I'll explain why in a minute. First, let's talk about active listening. The simplest example of active listening might be to have your company's support phone numbers and email addresses published on your web site or your packaging. Perfect. When a customer has a problem they can contact you whenever they want. Your team of trained experts is waiting and listening, ready to resolve any issue that comes their way! But there's a problem with this model. Remember our stats from above? 91% of customers who have a problem but say nothing about it end up leaving. In fact, in a more recent banking study by 1st Financial Training Services, they state that 96% of all dissatisfied customers simply leave without voicing a complaint! Wow! Are these numbers for real? Yes. This is a statistic that speaks to human nature. Complaining to a friend or spouse is easy because there are usually no expectations. But complaining to a company about a product or service that has already been paid for and/or delivered is different. There's work involved... looking up phone numbers, tracking down warranty information, repackaging an item for return, collecting evidence, etc. It's like preparing for a criminal court case in many customer's minds. No thanks. It's easier to just cut their losses and look for greener pastures. On top of that, they will still complain to friends or a spouse about their horrible experience, damaging your chances for future customer relationships, without you ever knowing why.
Ouch. So active listening isn't really the best model. Now let's talk about proactive listening. How is this different than active listening? When you are proactive, you're getting ahead of potential issues instead of reacting to something that has already happened. We can listen to customers in this way by reaching out to them first. When your company establishes a consistent, ongoing method to collect customer feedback, you are opening the door to capture more complaints. The more complaints we capture, the more opportunities we have to fix the problems, and the more problems we fix, the more satisfied and loyal customers we have. Of course, inviting more complaining from customers may seem counter intuitive to our personal serenity, but there's a bigger picture here. Every time you fix a customer issue, theoretically, you're fixing that issue for every customer from that point on, improving your entire business. Every complaint is an opportunity to make your business better and build a reputation for excellent customer service. The key here is not simply listening, but asking the right questions and listening to the response. This may seem like a no-brainer, but you would be surprised how few companies do this and that even less do it well.
If we go back to the top of this article and look at the TARP data, we notice something very profound. The difference between a customer whose complaints are resolved versus a customer whose complaints are resolved quickly. Nearly 30% of customers whose issues are not fixed quickly will leave! Again, these statistics will vary depending on your industry, but the principle is still there. The speed at which you fix a customer's problem is directly tied to their loyalty and satisfaction.
"But my customers all have different expectations of what 'quick' means. Some of my customers can be totally unreasonable!" I agree with that statement. The key to this one is to not let the customer set the expectation. You set it for them. Look at your company's data and compile a list of your most common complaints. If you're tracking how long it takes to resolve customer complaints, determine your average resolution time for each of the most common. Do you have access to industry standards for solving these complaints? Even better. Have you ever asked your customers what their expectations are? Maybe you should. All of this data will give you a baseline to determine an acceptable timetable to resolve customer complaints. Once you have that, the next step becomes a little scarier. Tell customers you will resolve their problem in a certain amount of time or they get something free, or their money back, or whatever you decide. The point is, you have just set the expectation of how long it will take to fix their problem AND you are holding your company accountable. Now, when you exceed the expectations that you have set, the chances that a customer will perceive this fix as 'quick' greatly increases. BAM! Loyalty ensues.
As an example, here's a case study from a client of ours. Several years ago, we started measuring monthly customer satisfaction levels for an international industrial supplier. Their service department's initial score was 68.0 (on a 0-100 scale.) Not great. After 2.5 years of proactive listening and process improvement, they increased that score to 77.2. Better, but still not where we wanted to be. So, we implemented an important change to how we reported their data. Instead of just delivering their results monthly, we started sending the particularly irate customer responses within 24 hours of receiving a survey response. This way, they could follow up with specific customer issues in a quick time frame. In less than a year from that change, their service department's customer satisfaction increased to 84.3. Now that's more like it! Proactive listening and quick resolution breeds loyal customers.
Of course, none of these issues are easy. Customer complaints, proactive listening and speedy problem solving are all complex issues that need serious thought and analysis. If you're wondering where to start or how to create a comprehensive customer satisfaction program for your company, reach out to me. My company, kreativeMotive, helps organizations with this every day.