When I watch reruns of one of my favorite TV shows, “The Office,” I’m typically not seeking any type of knowledge or profound inspiration – mostly just a good laugh. However, my expectations were proved wrong during one particular episode where the newly hired intern, Ryan, was sharing some of his “business school” knowledge with Michael Scott. It caught my attention when he said “it costs ten times more to find a new customer than to keep an existing one.” I had learned this concept in past business classes; however, I thought it would make an excellent topic for a blog post. We may not be working for the Michael Scott Paper Company, but I think the same concept applies to practically any business.
I did a little research and found that the exact percentage ranges anywhere from 5 to 9%, and I’m sure it varies among businesses as well. However, knowing that there is any type of loss involved, it definitely doesn’t hurt to be proactive about keeping your customers happy so as to not lose them, which would cost your business even more in the long run.
Use Social Media
Social media is a great tool that facilitates customer communication with a business. A highly monitored Facebook page or Twitter feed eliminates much of the need of customers to call into a busy customer service line. With social media, they have direct communication to the company for feedback, whether positive or negative. However, if you open this social media communication channel up to customers, make sure you don’t ignore them. The last thing you want to do is end up being the next “United Breaks Guitars” YouTube video (the lesson learned from that situation could take up an entire post by itself). If customers have a complaint, address it. If customers praise your business or product, respond. Show them you want to be connected.
Get Customer Feedback
Another great tool that encourages customer communication is feedback surveys. Whether in the form of an email, phone call, or online submission form, asking customers for feedback about your product or experience with your business is a great way to be proactive about ensuring their satisfaction. I see surveys like this from companies like Amazon and eBay to Wal-Mart and chain restaurants. Bigger companies seem to be catching the drift about how valuable this customer feedback is to improving their services, but it’s just as valuable for small business. While smaller businesses may not be able to offer entries into cash prize drawings for responding customers like bigger companies often do, they are still likely to get feedback. From personal experience, I’m typically the most willing to respond to these surveys when I’ve been really satisfied or really dissatisfied with my product or experience. But from a company’s perspective, either form of feedback is valuable in showing what they are doing right or what they are doing wrong. It tells the company what the customers really want, not just leaving them to guess what they think customers are looking for.
I don’t think I’ll ever find out if Michael Scott took Ryan’s advice about proactively keeping customers satisfied, but hopefully you will. While there are so many other things that go in to running a business, when it comes down to the bare basics, customers are what keeps any business going. Keeping your loyal customers happy should be one of your first priorities.