How valuable is customer confidence? Try to survive without it.
Isn’t it great when your customers have confidence in you? Isn’t it great that they know you’ll deliver-and that they trust your integrity and your fairness?
In fact, they may have so much confidence in you that they’re willing to tell others. They’re willing to refer you-unsolicited, and they’re willing to give a testimonial on your behalf-unsolicited.
The higher the confidence level, the less resistance there is to doing more business with you, and the less likely the customer will go shopping for price. Smart customers know that delivery and ease of doing business, plus reliability and consistency, are more important than price.
If your customer doesn’t know that-find another customer.
The question is: How did that customer gain confidence in you? The bigger question is: How long did it take the customer to gain that confidence in you? But by far, the biggest question is: What do you do if you begin to lose the customer’s confidence?
Well, it’s best to prevent confidence erosion in the first place, so let’s face the reality. Based on experience, you know that gaining the customer’s confidence can take years. It takes bringing in order after order, offering service after service, exceeding the customer’s expectations, and being there when needed.
But another reality is: Losing the customer’s confidence takes much less time than building it and far fewer experiences to send the relationship down the drain. Again, good old experience tells you that one or two “bad” episodes and confidence is somewhere between eroded and gone. Put simply: Customer confidence takes years to build-but days to lose.
Somehow, it just doesn’t seem fair.
So, for the fun of it, why not see how many “confidence erosion factors” you and your company are guilty of. When your customers lose confidence, you committed one or more of the following:
1. Late delivery (worse, late delivery without notification)
2. Partial delivery
3. Wrong delivery
4. Reduction in quality
5. Reduction of service
6. Poor accessibility to you in time of need
7. Slow response to genuine needs
8. Rude people in service or accounting-or in both
9. Failure to respond to a “fire drill” call in a manner the customer feels is excellent
10. Broken promises (worse if lied about)
11. Inconsistent service actions and business practices
12. Making excuses or blaming rather than providing answers
12.5. The customer discovers that your price is significantly higher than a competitor who, in the customer’s eyes, is offering “relatively” the same thing with “relatively” the same service in “relatively” the same time frame. The reason I use the word “relatively” is that you and your customer may have “relatively different opinions about what is a high price and what is a fair price.
The cold, hard fact is that your company needs to make a profit to survive. Often this profit is the result of cutting costs, cutting services, or cutting quality-three formulas for disaster over the long haul.
But-let’s get back to confidence.
If you don’t think you’re vulnerable and that the 12.5 “confidence erosion factors” don’t apply to you-stop reading. This only applies to people who have lost customers and don’t really know why, so they blame it on price, moan about it to all their superiors, and then do nothing or very little to win the customer back other than reduce the price further.
NOTE WELL: Losing a sale on price is not a problem. Losing a sale on price is a symptom. The truth is: The customer has more confidence in someone else delivering than he has in you. The bigger problem is to determine what you did to cause that customer to go away. But the biggest problem by far is that if you do little or nothing about it, you’ll lose other customers.
NOTE WELL: Never break a promise or miss a delivery or fail to meet a deadline or change a plan without a PROACTIVE-IN-ADVANCE-PERSONAL customer communication. In other words-talk to your customer.
Eroding customer confidence also causes internal morale problems. Rebuilding trust and lost confidence take time and are always under suspicion or scrutiny.
Here’s how to repair eroding customer confidence, stop it from spreading, or prevent it from happening in the first place:
Take responsibility for your actions. Stop making excuses and stop blaming.
Admit fault. Apologize. Then take action to resolve the problem or mistake.
Stop being defensive. Instead, take the offensive. If you defend your “improper” actions, you further erode your position.
Work on immediate resolutions to any problems. But be certain the customer is in agreement.
Satisfaction is not acceptable when something breaks confidence. You must do more than remedy the problem to your customer’s satisfaction.
Action, plus one. This formula assumes you will resolve the situation, AND reward the offended.
Wow or lose. You have a choice when things go bad. Do little or nothing-or respond and repair in a memorable way.
Budget AND empower specific actions. If management really understands the situation, they will figure out how to recover, how to wow, and how to train others in the art of positive responses and actions. And they will create a small BUDGET to prevent a large erosion.
What do you call this? This is NOT service recovery. This is NOT customer confidence. This is CUSTOMER RETENTION. And other than customer acquisition, it’s the most important job in your company.
FREE GitBit: Confidence has a sister, and it’s part of a formula that wins sales AND retains customers. It’s short and sweet. Want it? Go to www.gitomer.com; register if you’re a first time user, and enter the word CONFIDENCE in the GitBit box.
Jeffrey Gitomer, the author of The Sales Bible and The Little Red Book of Selling, is President of Charlotte-based Buy Gitomer. He gives seminars, runs annual sales meetings, and conducts Internet training programs on selling and customer service at www.trainone.com. He can be reached by phone: 704/333-1112 or e-mail: firstname.lastname@example.org