How repeat customers may jeopardize your future

Jan. 31, 2013 – The assumption is that if customers keep
spending their money with you, they must like you. But is that really
true? Jeff Mowatt explains the difference between repeat customers and loyal customers.

Jan. 31, 2013 – 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 that we received went something like this. They'd ignore
us completely as we'd enter the store. When we'd approach the cashier,
place our video selection on the counter, a gum-chewing employee would
avoid making eye contact with us, stair at our video, shift his or her
gaze to the cash register while simultaneously muttering, "Phone
number…" We'd obediently supply the information, and our hard earned
money, not just for one visit – but repeatedly for three years!

Of course, it's crazy to support a business where the service –
isn't. 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 "new release." 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 within the same vicinity, the existing store
doesn't lose some of its customers – it loses most of
them. And the loss has nothing to do with selection, decor, 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 laid-off all the employees. Not a happy ending.

As a manager, how do you know that your customers are in fact
loyal? Ask. In a round-about way, that is. 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… so 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 do business with organizations because they feel that they have to; since there's no convenient alternative. Loyal customers do business with 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 book Becoming a Service Icon in 90 Minutes a Month by customer service strategist and certified professional speaker Jeff Mowatt. Visit www.jeffmowatt.com for more information.