Familiar customers aren't always the best customers

When I speak at conferences and corporate meetings about customer service I often hear managers reminding their team members about the importance of repeat business. The assumption is that if customers keep spending their money with you, they must like you. But is that really true?

Many business owners and managers are unaware of the harsh reality that some folks who spend their money with your organization may not enjoy doing business with you at all. The consequences of this can be staggering. Consider the example of my local video store.

For three years, my wife and I lived in a neighborhood where most weekends we'd rent one or two movies at the local video store. That meant that every year we visited that business literally dozens of times. We recognized the handful of the store's employees, and I'm sure they recognized us (at least after our first hundred visits). Yet, the service we received went something like this:

They'd ignore us completely as we'd enter the store. When we'd approach the cashier and place our video selections on the counter, a gum-chewing employee would avoid making eye contact with us, stare at our videos, shift his or her gaze to the cash register while muttering, "Phone number . . ." We'd obediently supply the information, and our hard-earned money.

Of course, it's crazy to support a business where the "service" isn't service at all. But since it was the only video store in the neighborhood, we didn't think it was worth driving an extra 20 minutes out of our way just to pick up the same releases. So, we kept going back. In other words, we were repeat customers - but we certainly weren't loyal.

Businesses that are run like that accept a huge risk. The moment a new competitor starts up nearby, the existing store doesn't lose some of its customers, it loses most of them. And the loss has nothing to do with selection, décor or pricing. It happens when management assumes that since they have repeat customers, that means they have loyal customers. Big mistake.

Incidentally, when a competitor did eventually open a store in the neighborhood, the first store did indeed close down and lay-off all the employees. Not a happy ending.

As a manager, how do you know that your customers are in fact loyal? As a part of your day-to-day customer service operations, ask your regulars, "We want to make sure you're happy doing business with us. How are our products and services working for you?" Most often the customer will not want to offend and reply that you're doing fine. The key then is to follow up with, "Is there anything you think we could do to improve our service?" That's when customers tell you what they really think, and what you really need to hear as a manager.

Repeat customers may patronize a business because they feel that they have to - there's no convenient alternative. Loyal customers buy from you because they want to. Proactively checking in with your customers to ensure you're still meeting their needs is easy. And it's essential if you want to prevent your employees from becoming complacent and your business from becoming obsolete.

This article is based on the bestselling book, Becoming a Service Icon in 90 Minutes a Month, by customer service strategist and certified professional speaker Jeff Mowatt. To obtain your own copy of his book or to inquire about engaging Jeff for your team, visit www.jeffmowatt.com or call 800/566-9288.

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