Every company makes mistakes that could make them lose customers. I don't care what business you are in, something will go wrong.
Smart companies know how to recover a customer and turn them into a loyal customer for life. However, fewer than 2 percent of companies use service recovery techniques. That's really bad. All companies make mistakes. All companies have things go wrong. Many companies, and most employees, run for cover instead of solving the problem. And thanks to social media, the problems are only getting worse. If customers aren't happy, they'll post the problem on Twitter and Facebook. They'll do it fast. Then you'll have a massive public relations problem that will take time, effort, and money to repair.
Companies spend a fortune on marketing. But they don't spend a dime teaching front-line employees to keep customers from defecting. Wouldn't it be better to spend that money on training employees to handle problems in the first place? Instead of handling problems quickly and efficiently, most employees pass the buck or lie! That's because most people don't like confrontation. Instead of saying they messed up, they might say the product was shipped.
The most important person is the person who has direct contact with the customer. Unhappy customers won't call the company president. They will talk to whoever is in the store or who answers the phone. Employees need to follow the 5 Golden Rules of Customer Retention:
While I find it hard to find examples of companies doing this well, here are two companies that stand out from the pack:
Very few firms understand this - or have the know-how to act on it quickly and effectively.
Companies should spend some of their money on customers. Customer retention is all about creating loyalty and a fan base. Customers will come back more often. Their loyalty is greater when they have experienced service recovery.
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