Customers: The importance of a happy customer

Delighting your customers and clients is important, that certainly isn’t a secret. Most leaders in business are aware of the basics of how, and there are some very obvious reasons as…

Delighting your customers and clients is important, that certainly isn’t a secret. Most leaders in business are aware of the basics of how, and there are some very obvious reasons as to why. In this blog post, we’ll examine a few unexpected and surprising reasons as to why it’s important.

Customer churn is more damaging that you think

We’ll start with a thought experiment. Company A and Company B are competitors, selling the same product for the same price, with the same number of customers (1500 currently). In the past year Company A has lost 750 customers and gained 1000 customers, with a net gain of 250 customers. Company B has lost 250 customers and gained 500 customers for a gain of 250 customers. Which company is healthier? Company B. Obviously. But Company A’s increased Customer Churn is probably more damaging than you think.

Firstly, your labor skyrockets, since there’s the increased number of employees you have to hire. Even though you’re retaining fewer customers, you’re dealing with more of them compared to Company B. Secondly, an increase in overhead costs due to an increase in tertiary expenses. Finally, there’s the immeasurable costs due to customer churn that directly effects your bottom line.

Lots of unhappy customers mean that more of your interactions with customers are going to be negative. Customers complain loudly when they aren’t happy, which is frustrating to everyone. Leadership isn’t happy they’re losing customers, and employees who have to deal with complaining customers will get increasingly frustrated. It can lead to a vicious, self-fuelling cycle. You’ll see more employee turnover, further increasing the cost of business maintenance and growth, which leads us directly to…

Negative reputation is increasingly influential

Negative reputation is actually becoming way more important than it used to be. A hundred years ago, if someone asked their friends if they’d heard of your business, they’d get a “yes”, a “no” and maybe some feedback about one of their friends who had done business with you. Now, if someone has a question about your business, they’ll probably Google your business name… It’s not a good sign if your name appears on the first page under various consumer complaint websites. Also, instead of asking their close friends about your business, they might pose a question on social media like Facebook or Twitter. So instead of asking 5 people about your business, they’re asking 500 or 1500 people… Negative reputation is rapidly being amplified with the increase in global communication.

Great customer relations = Increased stability

Great customer service and happy customers really do help manufacture stability. Think about it; if your customer churn is low (helping keep your cost down and decreasing the variance in retention/conversion), your customers are happy and you have a positive online reputation, you’ll spend less money to maintain your current level of business because delighted customers don’t leave. Great customer service does two things simultaneously; it retains current customers and turns current customers into walking advocates for your business. Generally, professionals in the same field know others in the same field. If your customer (Jack) and an unknown prospective customer (Jill) are talking one day, and Jill asks Jack if he knows a (insert company role here)… Jack can have three basic responses:

“Yeah, I have the best (company role)!”,

“Yeah, I use (your business) and they’re okay.” or

“Yeah, I use (your company) and their customer service is terrible.”

The latter two responses either damage your business or don’t help it. The first response can get you a lead with a very high probability of conversion.

Do you have a customer service story? Let’s share!

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