Debbie Mayo-Smith: Good customer experience makes dollars and sense

Debbie Mayo-Smith. Photo / Supplied

Opinion

One of my recent columns covered a bad customer experience I had at a local restaurant, using the problem points as areas to review in your own business. Today let's look at the dollars and sense of creating a good customer experience.

But first, I must tell you that I got an email from the Operation Manager of Wagamama NZ outlining the internal process changes and actions they were going to take from the points raised in my column. Hats off to them!!!!!!!!

Now let's look at why Customer Service is so important to the bottom line.

The goal of every business is profit. Every business plan will have goals of increasing income and lowering operating costs. Improving the customer experience can be a clever and specific tactic of your business plan to achieve more income, lowered costs.

Cost of a lost customer

Having a good experience doing business with you brings people back. Think of the long term value of this (I wrote a column about my conversation with a supermarket manager that I represented $500,000 in business to the store.)

Of the 700 emails I received in reply to the story in my newsletter, over 200 wrote in stories of their experiences and the majority all said they won't go back to the establishment.

Let's say you run a café in a business district. A regular client might spend $72 a month on take away coffees . If something chases them away - like a snippy employee, your lost income is at least $720 a year ($720 for 10months); $2,160 over 3 years. Just from one customer.

Multiplier effect

Now what if that customer tells his colleagues "Don't go to that café'?. Multiply business lost by people told. Bad service or processes that chase people away has an actual cost to you.

The customer will probably tell 13 other people about their bad experience. Canadian research found 50 per cent of people surveyed said they had avoided doing business with a company simply because of a bad story they had heard.

If it's the buzz around the office - you could lose a potential of 13 regular customers to a neighbouring café. If they were only 1/5th as regular as the 'lost' customer, that would be $1872 per annum.

The cost of poor customer service and thus a bad experience is loss of actual revenue and loss of potential revenue.

It gets worse

Now with the ease of commenting online and Google's omnivorous appetite for collating details, any review of your establishment = good or bad will be recorded on your Google map listing. And if someone rants about a business, what new person will ignore it?

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debbie@debbiespeaks.co.nz