I met with an amazing local leader not too long ago. His passion for his industry and for the opportunity it posed was contagious. We spoke about the challenges of the service industry where his company is making its mark.
It’s a tough industry. Budgets are tight and the work can sometimes feel insurmountable. As we discussed the challenges and solutions, I felt that it came down to 4 key strategies.
Depending on your business, the metrics associated with these strategies will change. You should have metrics associated with each, though. You can’t improve what you can’t measure!
Satisfaction is something that registers two-fold for your company. We’ve probably all heard the ‘whew’ after a dissatisfied customer quit on us. But what we often neglect is the fact that they also tell half a dozen other people how dissatisfied they were. So… you didn’t just lose a customer, you also lost additional prospects. Don’t ever forget that customers (and employees) who quit because they are dissatisfied tell other people!
Since the company who is servicing them doesn’t listen, they’re going to go and tell everyone else they know. Word of mouth marketing isn’t something that’s spoken about enough, but it may have the largest impact on a business – positive and negative. Tools like the Internet amplify dissatisfaction.
Make sure you’re checking the temperature level of your customers and that they are (more than) satisfied. A simple email, phone call, survey, etc. can make a mountain of difference. If they don’t have an opportunity to complain to you – they’re going to complain to someone else!
Satisfied customers spend more and find more customers for you.
Retention is the ability for your company to keep customers buying your product or service.
For a website, retention is the percentage of total unique visitors that are returning. For a newspaper, retention is the percentage of households renewing their subscription. For a product, retention is the percentage of purchasers who buy your product again after the first time.
Acquisition is the strategy of attracting new customers or new distribution channels to sell your product. Advertising, Marketing, Referrals and Word of Mouth are all sub-strategies you should be leveraging, measuring, and rewarding.
Don’t forget… acquiring new customers is more expensive than keeping existing ones. Finding a new customer to replace one who left is doesn’t grow your business! It only brings it back to par. Do you know how much it costs to get a new customer?
Profitability, of course, is how much money is left after all of your expenses. If you’re not profitable, you won’t be in business very long. A profit margin is how large the ratio of profit is… many people pay very close attention to this but sometimes to a fault. Wal-mart, for example, has a very low profit margin but they are one of the most profitable companies (in size) in the country.
The exception to all of these, of course, is Government.