Ignoring customers - high cost! by Phil Hutchinson of Pitney Bowes on 30-Jun-2011

A third (33%) of UK business managers will sack service providers who they feel neglect or ignore them and a lack of communication was the key issue prompting customers to find alternative suppliers according to new research by Pitney Bowes. Nearly a third (29%) of respondents saying they aren’t told about updates and developments, while more than a quarter (27%) found it difficult to get answers from call centre employees.

"It’s essential for small and medium business enterprises to protect their existing customer base in the current economic climate, where business owners are constantly forced to consider their costs," said Phil Hutchinson, Pitney Bowes Tactical Marketing Director.

Many business managers felt the efforts of their service providers, including office suppliers, IT support services and printing, were skewed towards customer acquisition rather than customer retention.

"Winning new business can be more expensive than retaining existing customers, which not only provides stability but can also lead to impressive growth," Hutchinson added.

According to the findings, small and medium businesses including office suppliers (27%), printing (18%) and IT support services (12%) are most at risk of customer churn according to the findings, while law firms (4%) – who have communications at their core – were least at risk.

Hutchinson believes there are five simple ways to dramatically decrease customer churn and nurture existing customers:

1. Make your existing customers feel special with loyalty deals and sales, throwing in a freebie from time to time to thank them for their business and calling or mailing them to tell them the good news. A major complaint of existing customers is that special offers and freebies are only offered to new clients.
2. Ensure internal communication is a high priority; often small and medium businesses see little value in this area because it isn’t customer-facing, but in fact sharing customer data appropriately in any business can open up obvious cross- and up-selling opportunities based on the past behaviours of existing clients.
3. Find out straight away how they prefer to be contacted. If they don’t want to be called on the phone, then don’t call them – they could end up firing you just to get some peace. If it’s mail or e-mail they’re after, make sure yours are personalised and stand out from the crowd.
4. Make sure your sales and call centre staff know what they’re talking about and understand the importance of existing clients. Often the first point of contact, an unhelpful phone call or incorrect information can lose you a lucrative client.
5. If you do lose a customer, find out why they left and offer to make amends, but do it tactfully. Know their name, their business and how long they’ve been with your company. Make it personal and send a small gift and note thanking them for the duration of their business with you.

"Alternative service providers and suppliers are only a phone call or mouse-click away for those businesses unhappy with how they are being treated, so it pays to nurture the customers you already have," concluded Hutchinson.

Pitney Bowes: www.pitneybowes.co.uk

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