This post is brought to you by Carrie Smith, the genius behind the Careful Cents personal finance blog.  She’s a Certified Bookkeeper and Financial writer who works hard and plays hard.  She’s also a career junkie, social media addict, traveler, debt hater and food lover.  Find her on Twitter and Facebook.

According to Wikipedia the definition of customer retention is, “the activity that a selling organization undertakes in order to reduce customer defections.  A company’s ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace”.  I’ve encountered very few companies who actually live up to that definition.  But as a consumer it only takes a little bit of effort to make me a happy customer.  Here are 5 ways companies can improve customer retention and make me a life long fan.

Find out what a customer really wants (aka listen)

I can count on one hand the number of times a company has asked for my opinion or feedback about a product.  Normally they only care to listen once there is a problem, and by then it’s almost too late.  How can they know what I really want or need if they don’t the time to engage me as customer?  By taking 5 minutes to ask me what I’m looking for and really listening, a company can (and has) completely win me over.  A little goes a long way.

Immediately respond to a customer’s feedback and complaints

We can all spot an automated response or message to a problem, pretty easily. I’m actually pretty shocked when I get a real person to address my issue, even if it’s just to say they will get back with me soon.  An immediate response to my request or other feedback is a surefire way to make me a loyal customer for life. Take it one step further by hedging any problems in the first place.  By fixing a complaint before it even happens, a company shows they aren’t just interested in making money.

Make a personal and engaging connection

Social media isn’t going anywhere, so as a business you might as well deal with it, accept it and capitalize on it.  There’s no super tips for making money on Twitter or Facebook, all you need to do is be SOCIAL.  And I’m not talking about just spamming me with your latest product every 5 minutes.  Create social engagement and get people involved.  I’ve met several companies through social media and have really connected with the “face behind the brand”.  I feel these representatives are truly engaging and interested in my success.  In return I want to do business with them.

Admit mistakes and accept responsibility

Most of the time I don’t care who’s at fault or what happened, I just want the problem fixed. But I do not like to be blamed for an issue that was clearly not my fault.  Businesses are run by humans, and humans make mistakes.  Accept responsibility and work towards finding a solution.  With blogs, Facebook accounts and the Internet in general, consumers have multiple media platforms to express their satisfaction (or dissatisfaction).  As a company you never know who your serving, and losing that person’s business might have a bigger effect than you realize.  You can create a loyal follower or a vocal enemy.

Go above and beyond

This is a fairly simple idea but it can have profound affects.  The car company BMW, for instance, has a very special way of thanking their customers.  If you purchase one of their vehicles, you can receive the Century BMW VIP Performance Driving & Tour package, a $2,000 value!  This package includes airfare or train transportation, hotel accommodations, a personalized tour throughout the factory in Germany and manufacturing plant.  At the end of the day you can pick up your vehicle and drive a “victory lap” around the museum.  Now, THAT is some serious customer service.  After an experience like that, I’m sure all of us would become BMW driver’s for life.

The bottom line

As customers we just want to be treated with respect and that our opinions matter.  We work hard for our money and try to spend it as wisely as possible. Great customer service skills are quickly being forgotten but it doesn’t take much to keep buyers happy.  All it really takes is to act like you care, show your face behind the brand, listen and be engaging.

This article, Create Loyal Customers With These 5 Customer Retention Tips was originally published by DollarVersity, and may have been used without the owner's permission.

Some business experts have adopted an adaptation of a theory called the Pareto Principal stipulating that 80% of profits comes from the top 20% of clients.   The idea is that you should simply cut loose the bottom 80% as well as anyone that you deem to be problematic, or ”not worth it”.  In some cases, it helps improve sales metrics.  In other cases, it just hurts the company’s cash flow. However, I prefer to think there is an alternative option to dumping them outright: help them!

Everyone has them: the customer who doesn’t ever pay on time (or even at all), is complacent in all matters of their business until they need something (then calling every hour), always looking for a way to get things for free, or maybe one that is never satisfied no matter what is done for them.

One way in which you can do this is, in the case of the customers who are always behind in paying their bills, is to find out why this is a common occurance.  Perhaps they have cash flow issues, or are simply not organized and cannot get out from the hole they have dug for themselves.  Offer to get them in contact with your own accountant to help them resolve the financial issues, or if you know a business coach, offer to pass along the customer’s information so that they can get the assistance they need.

When you have a customer who is always looking for a freebie or a discount, turn the tables on them.  Ask them how they would feel if their own customers would ask them for the same things all of the time.  Make them realize that you just like in their own line of work you can’t just give everything away.  If you have already made concessions for them, let them know that, so they feel like they have “won”.

Some people are just cynical and think that everyone is out to get them, so they have lousy attitudes toward everyone.  In those cases, give them more than they expect.  Show them that not everyone they deal with is going to disappoint them.  It may very well be a problem that they create for themselves, but you can show that it just took the right person and company to make them happy and meet their needs!

In retail, particularly with electronics and tools, there a subset of customers known as “renters” who make purchases knowing that they will use the items for a period just short of the return policy period then return the items to avoid spending money while getting the use of those items.  That is bad for business, but don’t say that to the customer specifically.  There was a time when some retailers tracked customer tendencies (which is why you sometimes have to fill out a return form) and use that information to prevent certain people from making returns.  Let them know that you have accommodated their actions in the past because they are a valued customer, but that they cannot continue to do this.  Offer them specialized assistance to make sure they are making the right purchase the first time to avoid future returns.  Or, take it one step further and give them a “special discount” of a reasonable percentage to encourage them to keep the product.

While it may seem on the surface that these “problem” customers are just that, they may just be misunderstood or frustrated with their own situations and passing along that frustration on to you.  It may turn out that they simply needed to get their internal affairs in order before addressing the external issues.  In time, they may prove to be grateful for your understanding and assistance, and even move up into the that top 20% of your customer list or higher.  Things aren’t always as they appear so take a little time to turn the problem children into valuable sources of income for your business.

Have you encountered seriously problematic customers in your business? What steps have you taken to turn things around?  Or did you simply decide they weren’t “worth the trouble” and cut them loose?

This article, What Do You Do With Problem Customers? was originally published by DollarVersity, and may have been used without the owner's permission.

At a time when almost all companies, large and small, seem to be concentrating on improving the bottom line by implementing cost reduction strategies, it appears that many are neglecting perhaps the most important aspect that clients expect: customer service.  While good customer service hardly every gets recognized, poor customer service gains recognition everywhere you turn: from the person at a store asking to speak to a manager as the result of interaction with a disinterested associate, to a poor tip left at a restaurant due to slow or incorrect service, to the forum post born out of frustration from being on hold for what seems like an eternity before getting a live person, to the simple conversation between friends complaining about the lack of planning and service available at the mall on a Sunday afternoon.  The customer may not always be right, but it is the employee’s job to make every situation right.

It is no secret that happy customers are repeat customers, and that one bad experience left unresolved (or even resolved but unsatisfactorily in the customer’s eyes) can drive a customer to a competitor.  The key to retaining and even growing a customer base is superior customer service.  Yet, time and again companies seem intent on neglecting this most important component: extended hold times and difficult to navigate telephone menus, poorly trained or even incompetent representatives (every employee represents the company), outsourcing jobs to countries with poor phone line reception or poor grasp of the English language, unwritten or hidden policies, and even ignoring customers altogether.  Any one of those instances or a myriad of other will drive away business, and perhaps worse cause the customer to spread the word of such a distasteful experience. 

In an age where new can spread like wildfire, the last thing  a business needs is to be bad-mouthed.  A bad experience can be relayed before the event even has a chance to unfold in its entirety thanks to cell phones.  News of the event can be across the country or even halfway around the world via blog or forum postings.  Upper-management can receive word of a truly bad experience from the customer almost immediately through an e-mail.  There are numerous ways in which such events can be publicized by even the most “insignificant” of customers–and there are businesses that do view customers in such a manner based on amount of money spent or number of repeat purchases.  Everything can be tracked these days and can help you clean the system. 

The keys to retaining and growing a customer base are simple and do not take much effort to implement: 
 

• Train company representatives in all aspects of their duties as well as other duties they might be required to undertake 
• Instill a culture of “customer-first”, whereby each customer is treated as the most important person at that particular moment 
• Encourage company representatives to take the initiative to resolve  potential problems before they are allowed to develop 
• Empower employees to take corrective measures (within reason) in order resolve customer issues immediately 
• Make it easy for customers to contact the company in the event of an issue arising and ensure that the representatives are equipped to deal with those issues

It is not a cost-intensive or difficult process to ensure that customer service is a top priority. In fact, it may be as simple as giving the customer a warm smile and showing appreciation for their business. It shouldn’t be too hard considering one simple fact: we are all customers at times, so we know how we would expect to be treated. It only makes sense to place yourself on the other side when dealing with a disgruntled customer yourself.  And, above all, let them know that they are valued and desired, because without the customer, there simply is no business. 

What do you do as a business to prevent customers from reaching the point of walking away, possibly never to return?  Customers–what would you suggest businesses do when it comes to handling the way they treat unhappy customers, or even what they should do to prevent it from getting to that point.

This article, Great Customer Service Should Never Be Forgotten was originally published by DollarVersity, and may have been used without the owner's permission.

If you read blogs, then you know that everyone loves to write how-to articles  And, to be blunt, a great many of these articles are rip-offs or compilations of the millions that came before them (yes, I’m guilty of this too).  After a while, they start failing to offer new ideas, hold your attention, and even start to look like each other.  But personally, I realized that  I’ve learned a lot from watching people do things the wrong way, so sometimes it’s easier (and more entertaining) to write about those things.  So, here it is:

The NOT Top-5 ways to make and/or keep customers!

• Make it difficult to find or get in touch with you

  Nobody likes having to work in order to give you their business and quite frankly you should be making it impossible for them to not find your info.  Not having a website or a poorly designed website lacking a contact page (or any contact info for that matter) is a great way to accomplish this.  So is having a generic free email address that has nothing to do with the business which makes it more difficult to remember or associate with you.  Not having a fax is understandable, but not having a cell phone is inexcusable.  Plus these days, every business needs a social media presence, if for nothing else, simply to make your presence known to the world and make it increasingly easier for others to find you.

• If someone does contact you, take forever to respond

  People don’t like to feel as if they don’t matter or ignored and by doing this, you are putting that very assumption into their heads.  All it takes is a minute or two to respond.  An email saying something like “Hi.  I got your message, but things are crazy right now.  I’ll get back to you by the end of the week.” shouldn’t be such a hindrance as many people make it out to be.   Simply responding even if time is short or you don’t have an answer will let them know you haven’t forgotten or aren’t neglecting them.  And remember, these are people who want to give you their money.

• Lie

  Give them some song and dance about why you didn’t take their numerous calls.  Try to sell them on the reasoning behind your inability to do something as simple as answer their e-mails.  Try to put yourself over as something you aren’t.  Just don’t take responsibility for your actions (or lack there of), be transparent, or most of all be up front.  That’s a sure way to drive away business.  In this day and age, virtually anything can be found about anybody, so keep things shady if you really want to drive people away.

• Fail to deliver

  Did you promise the world to that last potential client even though you know for a fact that you would have a hard time backing up those claims?  How about ever telling someone that you could do the job for them, but not on their timetable?  Coming up short on guarantees, overreaching on promises of service, not meeting deadlines (some people just cannot work within a timetable, and you know who you are), providing less than quality work, all of these are failures to deliver on your end.  Broken promises lead to angry customers.  Angry customers become former customers.  That should accomplish your goal nicely.

• Steal

  Waste their time.  Take their money.  Just remember to under-perform, fail to provide any value, or heck, don’t do anything at all.  No further explanation needed here!

The bottom line here is quite simple.  Follow these 5 rules of thumb, and you will be guaranteed to not only lose you current customers, but potential clients as well.  People do talk and word of mouth is a strong way to affect business, whether in a positive or a negative manner.

This article, Piss People Off and Lose Their Business in 5 Easy Steps was originally published by DollarVersity, and may have been used without the owner's permission.