No B.S. Guide to Maximum Referrals and Customer Retention. Dan S. Kennedy

      It’s easiest if this is personal, but companies and brands do achieve it. These are called “passion brands.” For a time, Cadillac was such a brand. Apple was and is such a brand. Walt is long gone and the customers don’t know Bob Iger, so Disney is such a brand. Good evidence of the strength of a passion brand is customers’ cheerful willingness to pay premium prices vs. competitors and alternatives, and shareholders’ willingness to overvalue the stock vs. competitors and comparable companies. A Rubicon for a lot of these brands is full integration in their customers’ lives and environments, like daily use of products preferably in a ritualistic way, wearing of logo apparel, existence of collectibles, use of its language, and expressed reverence for its philosophy.

       CHAPTER 5

       In Search of Your Unique Advantage

      by Keith Lee

      The Harvard Business Review reports that if you can prevent 5% of your customers from leaving, you can increase your bottom line profit by 25% to 95%. You’ve seen math throughout this book that bears this out and even suggests greater opportunity just in preventing losses.

      A U.S. News and World Report study found that the average American business loses 15% of its customer base each year:

       • 68% of customers who stop buying from one business and go to another do so because of poor or indifferent service,

       • 14% leave because of an unsatisfactorily resolved dispute or complaint,

       • 9% leave because of price,

       • 5% go elsewhere based on a recommendation, and

       • 1% die.

      So 82% go somewhere else because of a customer service issue! This means it is within your power to stem up to 82% of your business’s loss of customers. I am here to emphasize that few business owners invest aggressively enough in this.

      With U.S. News and World Report reporting that 82% of customers leave one business and go to another because of a customer service issue, if you are serious about getting retention, getting more business from your current customers, and referrals, you’d better be serious about customer service.

      What’s sad for you and me is that most of those customers who leave because of a customer service issue don’t bother to complain. They just leave and don’t come back. Then you’re stuck spending a bunch of time, money, and resources trying to get new customers to replace them. It’s been shown time and time again that getting new customers is one of the most expensive things you can do to grow your business. Once you get a customer, you simply can’t afford to lose them. You can’t wait for complaints. You actually need to go looking for trouble and fix whatever ails your business or disappoints your customers.

      Every business category is seeing more and more competition every year. Every category has a version of national chain competition, competition from discount franchises, price competition, and competition from the internet, all making it harder and harder for you to thrive. But the great news is that in this most important area, the reason most customers leave one business and go to another—customer service—you can not only beat the competition—you can crush them.

      You probably can’t be “THE Low Price Leader,” so you really can’t live by price advantage. If you’re a retailer, you aren’t going to beat Walmart at this game. If you’re in menswear, can you beat Jos. A. Bank’s “Buy One Suit, Get Three Free” insanity? If you sell products and supplies to the homeowner or B2B, can you beat Amazon’s selection variety? Yet you need and should be urgently searching for something you can make your advantage. You’ll find it inside your business. With customer service.

      I own five businesses, and all of them are dependent upon independent businesses for their survival and growth. My businesses can only thrive when my clients’ businesses thrive, so I’m dedicated to seeing that independent businesses not only survive but prosper.

      At our American Retail Supply 35th Anniversary Customer Appreciation Conference and Expo, one of the speakers asked all 800 people in attendance if they had a unique product that people couldn’t get anywhere else. In the entire room, only two hands went up, and I’m betting their competitors think there is a substitute product. The other 798 knew they possessed no unique product advantage, and that’s a good thing to admit, if you then act accordingly and find and develop a different advantage.

      Almost no one has unique products or services that people can’t get elsewhere, so we need to give them a reason to do business with us rather than someone else. The one area you can do that with, that you have the greatest control over, and that you can get the biggest return for your effort and money is with what I call: Make-You-Happy Customer Service®.

      Not just satisfied. Not just satisfied just enough that you don’t leave, for now. Not just not complaining. Genuinely, child on “snow day,” child at Disney who gets hugged by Mickey, moviegoer who loves the film so much they want to stay and see it again, dog that finds a cookie under the couch happy.

      I’m not talking about customer service in a box either. This isn’t about the canned, “Thanks for shopping at Mega-Mart, have a nice day” kind of customer service. We’re talking about Make-You-Happy Customer Service^® in which, even if you mess up, the customer is going to come back because they like you and believe in you and your staff! INSURANCE. We’re talking about the kind of customer service in which customers are not buying, but loyal. SECURITY AND STABILITY. Customer service in which customers not only come back time and time again, but enthusiastically tell others about you. REFERRALS.

      Another great reason to give Make-You-Happy Customer Service® is, it’s fun, for customers and for your entire team. People love getting Make-You-Happy Customer Service^®. And team members have a huge amount of pride when they give Make-You-Happy Customer Service^®. Make-You-Happy Customer Service^® is fun for you! It’s fun for your team! Your customers love it! And the day goes much faster when everyone has fun.

      It’s fun to read a letter like this one from Cornel Rasor from Army Surplus in Sand Point, Idaho, in this case, about my management training program: “The system has lived up to its claims. My business has become easier to manage as well as more profitable. The support that I have received for the retail management program from my coach Mark Turner has been superb. I wanted to let you know that I am impressed with the system and especially with the support I receive from Mark. Indeed he has become a friend in the time we have been doing business. I am always willing to be a reference for your company in the event that you need endorsement for your system and your service.”

      That’s the way you’d like every customer to feel, and if they stopped to think about it, every business owner would want all of his customers to feel that way, and to go out of their way to tell him about it, to praise his employees to him, and to spread the good word to others. But in the average business, 82% do not feel this way. That’s a very big gap between what owners hope for and what actually occurs. A big gap between what customers would love and what they actually get. Through that gap goes a lot of lost customers—and a lot of lost money.

      As the author of The Happy Customer Handbook, 59 Secrets to Creating Happy Customers Who Come Back Time and Time Again and Enthusiastically Tell Others About You, I am often asked, “What is the number-one thing business owners can do to improve their customer service?” Another question I get is, “Why is customer service so poor?”

      When I speak to live audiences I often ask this question, “What should you be doing when it comes to customer service training in your business?”

       A. We tell our staff to deliver good customer service. They should know what that is.

       B. We tell our staff to deliver good customer