Archived Story

Ask SCORE: How satisfied are your customers?

Published 5:19pm Tuesday, October 1, 2013

By HARLAN JANES

SCORE volunteer

 

A business owner or business manager needs to be asking that continuously. Why? Various studies conclude that customers who experience poor service might not come back, and, worse, they will likely tell their acquaintances about it.

A White House Consumer Affairs survey and an American Express survey found that news of bad service reaches twice as many persons as does praise for good service.

Besides being concerned about the effects of a dissatisfied customer, Marketing Metrics finds that in general, you have a 5-percent to 20-percent probability of making a sale to a new customer, but a 60-percent to 70-percent probability of making an additional sale to an existing customer. That White House survey reinforces this by concluding that it is six to seven times more costly to acquire a new customer compared to the cost to satisfy a current customer. It makes business sense to ensure your customers are satisfied, even if it means spending something to satisfy that customer who had a poor experience. The research is clear on this.

The key to managing this is ensuring your business identifies customer problems quickly and responds in a way that satisfies that customer. It will be a different solution for each business, but nothing is more important. A Lee Resources survey found that 91 percent of unhappy customers would not willingly do business with that provider again. That’s staggering.  We face a 90-percent chance to losing a customer who has a bad experience. But that same survey found some good news — 70 percent of dissatisfied customers would do business again with that provider if the complaint had been resolved in the customer’s favor. The value of an existing customer is so high, that trying to find and solve all customer issues is vital.

American Express’ survey finds another element to providing excellent customer service. It learned that seven of 10 customers surveyed are willing to spend more with companies that provide excellent customer service.  (Another survey found an even higher result.)  Customer-service excellence is a valid objective for all businesses. And while there are some large businesses that do a great job in customer service, there is a majority that does not. This is an area where the small business and entrepreneur can really make a difference compared to many “big-box” stores and large service providers. Customers relate favorably to businesses that excel at customer service.

Abe Lincoln is said to have stated, “Whatever you are, be a good one.” He understood.

SCORE is a national, nonprofit organization that offers confidential and free counseling to small businesses. In the greater Washington area, contact SCORE by leaving a phone message at 252-974-1848, by visiting the website at www.EastCarolina.Score.org or visiting the office on Tuesday and Thursday mornings in the JobLink building, 1385 John Small Ave., Washington.

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