Good employees lead to customer retention

May 23, 2016

 

John Parker

John Parker

You don’t need to read this article to know that retaining current customers saves your company money and-is easier than acquiring new customers.  But, sometimes, a refresher helps.

The old adage is: “Let’s get customers in the front door faster than they go out the back.” But is that really how you want to run your business? Don’t you wonder if there’s more you can do to retain the customers you already have?

After all, attracting new customers involves advertising, explaining, selling, price concerns and account setup. On the other hand, building loyalty with your current customers provides increased referrals and repeat purchases. There’s no substitute for a loyal customer.

Given the value of loyal customers, you’d think customer service would be improving across the board, but it’s not. A 2013 study by Arizona State University’s W.P. Carey School of Business found that 50 percent of American households had at least one bad customer experience over the prior 12 months, up from 45 percent in 2011.

When recruiting and training new employees, a successful, growing businesses focus on customer service and retention. Let’s look at a few examples:

Disney looks for a positive attitude in all of its employees, according to livechatinc.com. Everyone they hire is a “cast member” and their work is a “full-time performance,” not just a job.  Some recruits opt-out when they comprehend this. All else being equal, Disney hires for attitude over aptitude, skill and ability.  They know what they want.

Drybar, based in Irvine, California, also know what they want and hire for attitude. No divas need apply! Other salons have hair stylists who treat customers in a condescending way, but  the founders of Drybar will have none of that! Like Disney, the owners hire only welcoming, engaging staff.

The company is also very focused. Drybar’s motto is: “No cuts. No color. Just blowouts.”  Its goal is to offer a great experience for women as they come in to relax, be indulged and have fun. Fun can include cocktails, and chick-flick movies. Women love it. Drybar began with four stores in 2010. Now it has 59 locations around North America.

Ace Hardware trains staff in helpfulness. “The Helpful Hardware Store” is a chain with 4,500 stores. It also trains employees to be courteous, but helpfulness is where Ace outshine the big box hardware stores.

Kelly Spors of American Express blogs, “Shep Hyken, a customer service consultant, who’s written a book about Ace’s customer service practices, recalls one story of when an Ace customer wanted a specific lawnmower model that Ace didn’t carry.  Rather than say, ‘Sorry, we don’t carry that,’ the employee said, ‘Let me check with my manufacturer’s rep,’ Hyken continues, ‘With a little extra effort, the Ace employee was able to locate and sell the requested lawnmower to the customer.

Ace employees will also often deliver items they can carry themselves to customers’ homes. ‘That’s the kind of thing they do,’ Hyken says. ‘If you have the best product in the world but you’re not nice about how you deliver it, customers will go find somebody who will be.’”

Apple Computer is  the fastest growing retailer in history, with chart-topping 2014 retail sales per square foot of $4,798. (Tiffany & Co. jewelers came in second at $3,132 per square foot).

Apple focuses on intensely training employees in its sales culture which some critics allege is practically cultlike. Nevertheless, the company keeps its approach simple with this A.P.P.L.E. acrostic:

A – Approach customers with a personalized, warm welcome.

P – Probe politely to understand all the customer’s needs.

P – Present a solution for the customer to take home today.

L – Listen for and resolve any issues or concerns.

E – End with a fond farewell and an invitation to return.

Regarding Apple’s A.P.P.L.E., Humayun Khan observed on Twitter, “The whole point of creating one though is that it’s easy to recall and gives your staff a clear line of action to follow and fall back on as they encounter multiple types of customers, creating a consistent and branded experience.”

We learn from example. Henry Ford got the idea for his famous auto manufacturing process from a Detroit meat-packing house’s assembly line. So, what can you adapt from these examples of successful service businesses that will help your company today?

John Parker is the founder of Professional Development Adventures and an instructor for the UC Davis Center for Human Services. You can reach him at coachingparker@comcast.net.

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