Where I spend my money is not defined as much by what I need as by what I want. When it comes to spending money, I have plenty of choices. Whether I need clothes, food, a new car, a flight, a new place to live, the defining criteria is not what I need. The criteria for deciding where I spend your money is based on what I really want — value, service, respect, enjoyment, less hassle, etc.
The cost of attracting a new customer is five times higher than the cost of keeping me. Yet, more money is spent on sales and marketing than on customer service and customer service related programs. Here are two examples:
1. Pathetic customer service systems: Many companies that have shifted to complicated systems to deal with customer service calls instead of simply making it friendly and easier for me to call in. Why? Cost savings has to be the answer. It certainly isn’t to make life easier for me. Nothing annoys and frustrates me more than not being able to connect with someone when I have a question. Being on hold for 10-15 minutes or more is not “service” or “help”.
2. Incentive programs to attract new customers: The message I get from these programs is your business values new customers more than they do exisiting ones. You would rather I leave than give me a reason to stay? Where is the loyalty program, where is the deal for being a loyal, long-term customer? Is client churn part of your business strategy? I hope not. Client churn is what kills businesses.
Attention business owners, where you spend your money will determine where I spend mine. I suggest and recommend you invest in programs that minimize churn, improve customer satisfaction and retention, and develop programs that provide the potential to increase revenues with your existing customers. The payoff is five times greater than any money spent on your sales and marketing programs. Think about it.
