There’s no point in trying to sail directly into a storm, but too many business owners try to do exactly that when it comes to customer retention. A dissatisfied customer will cost a business not just one time, but several times over, in a variety of ways, and the result is very much like a storm of bad customer relations, lost opportunities, and added expenses.
Consider this statistic, from the White House Office of Consumer Affairs: A typical dissatisfied customer will tell between 9 and 15 people about his or her experience — and about 13% of them will talk to more than 20 people.
That means that one dissatisfied customer is like a whirlwind of negative advertising, tearing through a store’s crop of potential customers, turning them from good prospects into lost causes.
Think of it this way: If you know that every time any of your customers were unhappy, that person would stand out in front of your store and tell people what a lousy store and what a rotten staff of clerks you had, you would probably do something about it.
But if you don’t know who where that person is, who they are, or who they’re talking to, you’re facing a storm wind that you cannot control.
This, however, is exactly what too many businesses do, in choosing to not address the concerns of dissatisfied customers.
And how do you measure the cost of trying to sail into that kind of wind? Is it the value of each opportunity lost, or is it more than that?
How much do you spend on attempting to bring in new customers? If your business is like most, it’s probably quite a lot of money. Here’s another statistic to consider: 55% of the money currently spent on marketing is for acquiring new customers (McKinsey).
That’s a big chunk of anybody’s marketing budget, and if you plan on having a successful business, you don’t want 55% of any part of your budget to go to waste.
But all of that spending on new customer acquisition is being undermined every time that a dissatisfied customer tells someone about his or her unhappy experiences with your store. The wind isn’t just blowing against you — it’s blowing that marketing money right out of your hands, and away across the horizon. You are paying for customer dissatisfaction not only in the loss of potential new customers, but in the loss of money spend trying to win those customers over in the first place.
So what would it take to eliminate those dissatisfied customers, and the problems that they bring?
As it turns out, the cost isn’t high. All you need to do is find out what makes your customers happy, and what makes them unhappy, then do the things that make them happy, and avoid doing the things that make them unhappy. That in itself is enough to cut that storm wind into a comfortable breeze — and one that’s blowing in your favor, rather than against you.