Why You Need to Be Hooked on Your Customers
I just read the brand new book by Bob Thompson: Hooked On Customers: The Five Habits of Legendary Customer-Centric Companies. As a marketer, my job is to help organizations with the front parts of the process: establishing brand awareness, generating inquiries, turning raw leads into qualified opportunities, and so forth. But I have always understood that it costs 5-10 times as much to find and sell a new customer as it does to get add-on revenue from an existing customer. This is where Bob Thompson’s excellent book comes in. The major premise is that talk about great customer service is cheap, but it is specific actions that count. It was interesting to read about how companies like Home Depot, Sprint and Ritz Carlton earned their customer loyalty stripes, not by talking about taking care of customers, but by doing so in everyday situations. Incidentally, the five habits of being customer-centric are: Listen – Think – Empower – Create – Delight. However, to make these habits a reality in your organization, you must adopt them both culturally and practically. Question: How many companies have messaging like the following: “We have the best customer service in our industry”? Answer: lots of companies say this. Question: How many of the companies that claim to have the best customer service are lying? Answer: most of them. Because the fact is, while customer service is easy to talk about, it is quite hard to deliver. Consumers are tired of the claims and highly skeptical of anything they haven’t experienced. And if you talk about your great customer service and treat the customer shabbily, they can hurt you not only by withholding future business but also by spreading the news about your poor service via the Internet. Most people agree that getting new customers is a tough game, but keeping them can be equally daunting. We look at several marketing and sales metrics to gauge the health of an organization, such as cost of customer acquisition, average sales price, and lead-to-opportunity conversion. But the metric that can have the most profound impact on the income statement and stock price is lifetime customer value. You don’t want to spend lots of money and energy attracting new customers only to find them drifting to your competition because you don’t follow customer-centric practices. My company is sometimes called in to rescue a failing organization whose only option is to attract new customers quickly. Sadly, such companies would be in far better shape if they had focused more on the care and feeding of existing customers. It is especially important that the information and resulting strategies presented in Bob Thompson’s book are based on a decade and a half of research on what separates the customer-centric (and thereby successful) firms from those that are customer neutral or hostile. Like all good business reads, this book supplies both the “why-to” and “how-to.” A football team may draft great players and talk a great game in the training room, but it is on the field where the game is won or lost. Likewise, all the lip service and platitudes about taking care of customers won’t work for you unless you win the game where it counts – the places where you interact with customers during and after the sale.