Every company makes mistakes that could make them lose customers. I don't care what business you are in, something will go wrong. But the smart companies know how to recover a customer and turn them into loyal customers for life.
However, less 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.
The problems are only getting worse thanks to social media. 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 fix.
Instead of handling problems quickly and efficiently, most employees pass the buck or even lie! That's because people don't like confrontation. Instead of saying they messed up, they might say the product was shipped.
Companies spend a fortune on marketing. But they don't spend a dime teaching front-line employees to keep the customer from defecting. Wouldn't it be better to spend that money on training employees to handle problems in the first place?
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. Those people 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:
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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