Rebuilding customer relationships

By: Michael Risse

Why it’s worth the effort to reach out to lost customers -- and some advice for making the job easier.

Nobody likes losing a customer, but arguably, such a loss hits a small or midsize company much harder than it does a larger one.

After all, the smaller the organization, the larger the percentage each individual customer represents. More important, small and midsize companies tend to operate locally or regionally rather than nationally or internationally. Someone can bad-mouth a giant airline in Milwaukee and the news will probably never reach Memphis. But if your local clients are swapping horror stories, they’re killing your reputation in the only place you do business.

If you find that you’re losing customers, you need to go all out to win them back. For advice on doing that, we turned to Rob Garf, senior retail analyst with Boston-based AMR Research, whose specialties include customer relationships.

Any small or midsize business can learn from what’s going on in retail, which is why we’re sharing Garf’s insights here. "There’s huge competitive pressure in retail," he explains. "Megaretailers are putting companies out of business, and to stay alive, SMBs [small and midsize businesses] need to differentiate themselves." The best way SMBs in any industry can do that, of course, is by providing a strong customer experience and nurturing their customer relationships.

When it comes to rebuilding relationships, Garf says, you’re talking about customers that moved on because something disappointed them. "At some point in the past, you set expectations through advertising, marketing or promotion," he says. "Simply put, you didn’t fulfill those expectations, and you lost the customer’s trust." One simple example: A customer that purchases something from your Web site, then tries unsuccessfully to return it at a physical location. Such an experience leaves a sour taste in that customer’s mouth and sends trust right out the window.

Obviously, salvaging such relationships begins with regaining the customer’s trust. Doing that requires taking the following four steps:

• 1. Identify the problem.
• 2. Fix the problem.
• 3. Tell customers you’ve fixed the problem.
• 4. Prove to them that you’ve fixed the problem.

The good news: SMBs have a distinct advantage in this regard. Typically, they maintain strong relationships with their customers, so they can more easily try to reconnect with them and inquire -- humbly, if necessary -- what went wrong and how they can make amends. (SMBs can also ask those questions immediately following online transactions by providing pop-up windows in which customers can either respond to a short survey or simply type and submit their comments).

No matter how you gather that information, remember that it’s critical that you close the that you were listening by acknowledging them and taking action as quickly as possible. If the problem still exists the next time customers visit your business or your Website, they’ll figure you don’t care -- and you’re likely to lose them for good.

Your ultimate goal, says Garf, is to remove variability from the sales process, regardless of whether you’re selling onsite, online or over the phone. The process has to be synchronized and replicated so that customers know what to expect and have reason to believe that everything will proceed smoothly.

"Quality in manufacturing is about making each product defect-free," Garf notes.

Bottom line: Businesses in every industry need to take a similar approach to building and rebuilding customer relationships and removing variability so that every interaction is as defect-free as possible.


Michael Risse is Vice President, Worldwide Small and Midmarket Business Group, Microsoft Corporation.
Reprinted with permission from Microsoft Corp.
www.microsoft.com/midsize.

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