Reducing Friction Increases Sales and Profits
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Reducing Friction Increases Sales and Profits

Reducing Friction Increases Sales and Profits

If you want more of something—customers, sales, and profits—I have three words of advice for you: Reduce the friction. What I mean by that is you must eliminate anything and everything that gets in the way of people doing business with you.

For most companies, those roadblocks include everything from your hours of operation and your use of technology to policies and procedures that make it difficult—if not impossible—for people to purchase your products and services.

You can have the most capable and friendly employees in the world, but if you don't supplement them with ease of doing business with you, you're spinning your wheels. You, as a company owner or executive, must make it a priority to analyze how you interact with customers and identify what you can do to improve those interactions.

Jeff Bezos, founder of Amazon, has said, "If you want more of something, reduce the friction." If you want to drive your sales, you must create loyal customers who wouldn't dream of doing business with your competitors.

Most of you focus on the bottom line; you are "numbers people." Let me share some numbers with you that I hope will open your eyes and provide you the incentive to up your game when it comes to attracting and retaining customers.

Apple is one of the most customer-friendly companies in the world. If I have a problem with my computer or phone, I don't have to pack them up and haul them into a store; I can simply call the company and explain the problem. The employee on the other end of the line then walks me through the process to solve my problem.

How does Apple's customer service impact its bottom line? The company has had $100 billion in profits for the past several years. Last year, it had sales of $383.3 billion and a net income of $97 billion. Impressive.

Costco had $237.7 billion in sales last year, an increase of $15 billion over the previous year. The company has 316,000 employees in 871 locations and has made customer service its top priority. Let me give you an example: If you bought steaks from Costco, and they weren't as good as you expected, you don't have to bring them in to get a refund. You can simply go to customer service, tell the employee your problem, and get a refund. You don't even need a receipt; your purchase information is in the company's computer system.

And then there's Amazon, one of the most customer-centric companies in the world. This company does everything right, and it reaps great rewards because it does so. In 2023, Amazon's sales reached a whopping $574.8 billion, an increase of $60.8 billion over the previous year. And its net income was $30.4 billion.

Look at how you use technology. Are you using it to tick off customers and avoid human contact, or are you using it to recognize customers? Amazon uses it as a magnet to draw customers to it. Placing an order takes just a few seconds and is acknowledged by the company in less than a minute—and that includes the date it will be delivered. If you receive an order that doesn't meet your expectations, you can easily return it at no cost to you.

The most important step you can take in creating loyal customers and attracting new customers is to know who they are. What hours and days are you open for business and available—either in person or through technology—to your customers?

If you're selling vacation travel, for example, you absolutely must be open and available at night and on weekends, when customers aren't in their offices and are free to book flights and hotels. Don't be like RCI, the world's largest timeshare exchange, which closes at 6 p.m. Saturdays and is closed Sundays. If you own a dental clinic, have evening and Saturday hours to accommodate your clients. The options to accommodate customers is endless.

It's critical that you know your customers and that you do everything you can to meet—and exceed—their expectations. They want great quality, great prices, great speed, and great service. Deliver all four, and your sales will skyrocket.

John Tschohl is the founder and president of the Service Quality Institute—the global leader in customer service—with operations in more than 40 countries. He is considered one of the world's foremost authorities on all aspects of customer service and success and has developed 18 customer service training programs that are used by companies throughout the world. John became a millionaire by age 30. His monthly strategic newsletter is available online at no charge at customer-service.com. He can also be reached on Facebook, LinkedIn, and Twitter.

Published: July 10th, 2024

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