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Want to retain loyal customers? Here is how to make it happen

If a customer comes into a retail outlet and if he is treated shoddily, he will go out of his way next time to go to your competitor.

May 29, 2021 / 10:40 AM IST
Customer is the one who is paying your salary.

Customer is the one who is paying your salary.

Customer service has an impact on both existing customers and potential customers. A new research has found that 73 percent of consumers would react by telling family and friends about a bad experience, by posting it on a social network. And, as an average Facebook profile has 338 friends, the bad publicity can reach thousands very quickly.

On the other hand there is great value in delivering great customer service. In a recent study it was found that about 80 percent of 30+ old shoppers are willing to pay more for a better customer experience and about 70 percent of them said a friendly customer service made them like a brand.

It costs six times or more to get a new customer as compared to retaining an existing one. It is also much easier in all types of businesses across the world to keep an existing customer engaged and happy than to find a new customer. Business should be built around how to deliver excellent service. It is easy to forget its importance when you are building your brand’s web presence and marketing your website.

This is true in every industry – even in the fast moving consumer goods market. In their quest to build brand equity the FMCG brands spend crores of rupees in advertising not only to reach out to new customers but also for being relevant to existing buyers.

In this business, out of sight often spells out of business. And, the cost of maintenance advertising is much lower than that of a launch ad. For instance any new variant launched in Unilever’s books will require a 30-45 second TVC as compared to a maintenance ad of 20-sec. Contrast this with an industrial marketer like Foseco or Bharat Forge. For them, driving more business from existing customers is very important for growth.


If it is far easier and cheaper to retain existing customers, how come most companies ignore this fact and deliver lousy service? Many businesses miss the bus when it comes to customer engagement and retention. Therein lies the remedy: One of the most effective, easiest, and least expensive methods to retain customers is delivering good, not necessarily great, customer service. Think for a minute: As customers, all of us want to feel respected and valued; we go after gimmicks like special discounts or rewards; we love to be called VIP customers; and we want most of our service providers to deliver their services with courtesy and empathy. Of course we want them to deliver the service as promised, too.

In order for companies to keep their clients, and get new clients by word of mouth and referrals, fundamental values of human beings should indeed be adhered to. These include respect for each other, politeness, empathy, responsiveness and courtesy. Let me list a few guidelines for your employees to stick to at every moment of truth. At every contact point with customers, whether it is via telephone, Internet or in-person, these guidelines should shape the behaviour.

Use the muscles on your face. What does this mean? Smile and bring the smile to your eyes and heart. It can go a long way in making a customer feel comfortable and appreciated. How much effort and time does it take for an employee to smile?

And, how much will it cost the company? It can convey a lot of meaning and deliver tremendous goodwill for the employee as a person and for the company as a whole. When someone smiles at a customer, she will feel welcomed. It is as if they are telling the customer that they have time for her. To start with, it is one great step.

The second guideline is about the way your employees speak to the customer. The use of one harsh word or tone can do more damage than the good you can create with ten good words. If the customer service representative has a bad day at work or home it will reflect in her behaviour.

No one wants to be treated badly. In fact, eight times out of 10, if a customer comes into a retail outlet and if he is treated shoddily, he will go out of his way next time to go to your competitor. Therefore, training employees on the method of communication and the tones to be used will make a big difference. If an employee is having a bad day, send him home, or send him to the back office where he need not deal with customers.

The third guideline is all about being polite and respectful. Customer is the one who is paying your salary. So better be respectful and polite. It is amazing how a little politeness can win you customer hearts, if not their wallets. Train employees to be friendly, helpful, and polite, even when the customer is upset and rude. If customer service is your number one goal, customer retention has to be the number one result.

Push the limits to drive the extra mile. Going the extra mile will always surprise and delight a customer. I tell my clients the story of a three-year old girl who wrote a letter to a UK grocery store, asking them why their “tiger bread” was called tiger and not giraffe. To her surprise, the service manager of Sainsbury’s responded with “I think renaming it to giraffe bread is a brilliant idea!” And they did indeed rename it!

There are many more guidelines to drive customer retention and I can probably write a book. There are companies that do things like loyalty programmes, customer appreciation days, etc in a drive to retain their customers. But then the cheapest and easiest way to keep your customers is making them happy with a caring attitude and a good helping heart.

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M Muneer is the managing director of CustomerLab Solutions, an innovative consulting firm delivering measureable results to clients.
first published: May 29, 2021 10:40 am
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