ADVERTISEMENT

What Have You Done For Me Lately?

June 2011 Marketing

The May 16 issue of Harvard Business School’s “Working Knowledge” carried an intriguing article entitled “What Loyalty? High-End Customers are First to Flee.” The article goes on to discuss the work of Prof. Francis X. Frie and doctoral student Ryan W. Buell.

The premise of the research simple states that customers that businesses believe to be their best and most loyal are likely to be the first to cast you aside when presented with a challenger of a firm’s heretofore superior service.   It’s a real kick in the groin to those companies who believe they have invested heavily in high levels of service for their best customers.

Maybe it’s a story of our times with coupon companies like Groupon offering enticing reasons to try new products and services.  But there really isn’t anything new about this Harvard research – especially for businesses who are fighting it out in the ever more crowded service economy.  A number of years ago I wrote an article for a publication that no longer exists entitled “10 Easy Ways to Lose a Customer.” I revisited the article and found it remarkably relevant to the work of Prof. Frei and his student.  (For those interested in the article, they can find it on my Website: www.jamesberger.net.)

The premise of the article is that while businesses will willingly invest large sums of money trying to attract new customers, they often lose valuable relationships through simple acts of carelessness, poor communication, the inability to listen and the failure to identify with the changing needs of the customer.  Even though the article was written 20 years ago, it was as clear then as is today that the business environment is brutally competitive.  Not only is it difficult to get new business, competitors are working overtime to steal key accounts.  The article goes on to present a “Customer Loss Prevention Audit.”

The audit pinpoints 10 problem areas where businesses can be vulnerable.  Those 10 areas are:

  • Pricing
  • Perceived Value
  • Competition
  • Service
  • Work Quality
  • Personality Conflicts
  • Adjusting to New Customer (Client) Needs
  • Billing
  • Records — Keeping and Reporting
  • Communication

The last — communication — is the most crucial.  I call it the “gatekeeper” for virtually all the others.  Clients (customers) are never lost when communications can be free and open.  It is as true as ever – problems start when customers stop complaining.   As long as a customer knows the product or service provider is listening and is capable of helping, the relationship will continue.  Only when the customer becomes convinced that the service provider either isn’t listening or can no longer satisfy the customer’s  needs will the customer start looking elsewhere.

However, lines of communication will not stay open forever.  One sure way to close or clog those lines is to keep making the same mistakes over and over again.  Anybody and everybody makes mistakes and when you have a healthy business relationship, the customer will freely communicate and point out – or complain – about those mistakes.  You tell the customer you appreciate his comments and you FIX the problem.  If the problem keeps happening after it is allegedly fixed, the customer usually won’t keep complaining.  That customer will simply migrate to a competitor.  Goodness knows there are plenty of them out there.

 



About the author

James T. Berger, Managing Editor of The Wiglaf Journal, through his Northbrook-based firm, James T. Berger/Market Strategies, offers a broad range of marketing communications, research and strategic planning consulting services. In addition, he provides expert services to intellectual property attorneys in the area of trademark infringement litigation. An adjunct professor of marketing at Roosevelt University, he previously has taught at Northwestern University, DePaul University, University of Illinois at Chicago and The Lake Forest Graduate School of Management. He holds degrees from the University of Michigan (BA), Northwestern University (MS) and the University of Chicago (MBA). Berger is an often-published free lance business writer who has developed more than 100 published articles in the last eight years. For more information, visit www.jamesberger.net or telephone him at (847) 328-9633.

James T. Berger
More by James T. Berger