Can You Make a Negative Experience Profitable?03/22/16
There’s no getting around it, bad customer experiences happen. How you handle customer issues have a huge impact on your business. Recently, I had a bad experience that made me think about actions businesses can take when things go wrong.
I had a reservation at a high-end steak house for a family celebration. Upon arrival, the hostess told us that they didn’t have a table available. I asked why, and was told it was because they were busy. Which is, of course, the point of the reservation! We waited 40 minutes before giving up. We left hungry and angry without talking to anyone. It happens more often that you think. 78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience.
Negative experiences have lasting effects
Unfortunately, the steak house lost us as customers. We have shared our bad experience with lots of people. On average, people tell twice as many people about negative experiences than they do positive experiences. It costs 6 times as much to acquire a new customer than to keep an existing one. And, new customers spend less and visit less often.
On the other hand
Had the restaurant apologized for the delay, maybe bought us a drink while we waited, and offered a sincere apology, the results would be much different. Reasonable customers don’t expect perfection. We do expect to have our issue acknowledged and quick action to make it right. Not only will we return, we’ll be 50% more loyal than before the incident occurred.
Have a Plan
Take a hard look at your business processes.
· Anticipate where problems can occur and develop a plan that empowers employees to take action.
· Act quickly when an issue arises. Don’t wait for customers to get irate or leave for the competition.
· Acknowledge the problem. A sincere apology will keep the the problem from escalating.
· Make it right. Don’t just solve the problem. Your customer was inconvenienced and should be compensated for the negative experience.
Go above and beyond
If you want unhappy customers to come back, give employees the tools to “wow” them. “Wowing” customers creates relationships that are key to turning customers into advocates. Advocates are a different kind of customer. They strongly believe in your business, and go the extra mile to convince others to believe in it too. One key to turning a customer into an advocate is the way you make them feel. Wowing them creates positive feelings toward your business. Had our restaurant not only taken care of the issue properly, but also “wowed” us, we would return again and again! A 5% increase in retention, can result in a 75% increase in profitability.
Have a plan. Take action. Wow your customers. It will keep them coming back.
Originally published in the March issue of Carmel Business Leader.