What is the balance in your business between the amount of time and money spent acquiring new business versus that spent servicing existing customers? For many businesses, sales and marketing expenses associated with attracting and acquiring customers is one of the largest expenditures. Getting customers in the door seems to be priority number one and where resources flow. Unfortunately, less attention is spent on those that are current customers. Consider cable and cell phone company incentives for new customers which offer better rates than those existing customers pay. How about banks working to lure customers to transition with incentives that existing customers don’t get?
Certainly, some companies consider their customers as ever coming and going on a carousel. The interactions are transactional and one time. Wedding planners are not likely to see their customers more than once. Even more certain as one-time transactions are the services of a funeral home. These types of businesses are on a constant churn of customers. There’s no need to worry about servicing existing customers. Fortunately, for businesses like insurance brokerages, it’s the opposite. The goal is to develop long-term relationships where customers reliably repurchase insurance year after year.
Joey Coleman in Never Lose a Customer Again: Turn Any Sale into Lifelong Loyalty in 100 Days: Coleman, Joey: 9780735220034: Books – Amazon.ca Never Lose a Customer Again, asks, “Why don’t businesses focus on retaining the customers they worked so hard to earn?” Our businesses present a warm, fuzzy, and friendly face when attracting clients. However, once they are in the door, customers are subjected to rigid policies and procedures that reflect more about how we do things around here than common sense and customer benefit. The good will earned at the outset evaporates quickly and customers look to leave shortly after entering. Coleman writes, “As businesses have grown colder and more structured around policy—without taking into consideration the people the policies impact and affect—consumers increasingly feel uncared for and not considered.”
A customer’s experience takes a back seat to customer acquisition in most businesses. Coleman writes, “In most businesses, the ‘stars’ are the employees who bring in new clients, not the employees who keep clients happy after the sale.” Businesses spend more on marketing than on servicing customers. Several studies suggest businesses spend five times as much on acquiring customers than on servicing them. After sale service isn’t an area of high priority. The structure of most organizations puts customer service as a lower-level role beneath sales or even separate from sales. Wherever it sits on the org chart, customer service rarely receives a seat at high level strategic meetings. Worse yet, many companies seek to incent their staff to spend less time not more time servicing customers. Call times are monitored and scored based on how quickly a request can be managed. Coleman presents research undertaken by Bain & Company which asked both companies and customers their thoughts about customer service. The disconnect between the assessments of customers and companies was striking. Companies thought they were doing a cracker jack job of customer service. 80% thought their efforts were “superior.” What did the customers think? Not so much. Only 8% of customers rated their experiences as “superior.” Companies were so out of touch with their own customer experiences that they overestimated their success ten-fold.
Coleman invites us to consider the impact on our business if we never lost a customer. If everyone that came to you stayed with you, how much better would your business be? How much more revenue would you have? How much more profit would you be generating? Brilliant businesses relish retention.
Coleman also points out that increased competition in most markets leads to decreased differences in things like service quality, pricing, and availability. What’s left to differentiate? Coleman offers the customer experience as the difference worth detailing today. He considers the customer experience as emblematic of the value customers receive from the product or service being purchased. How does the customer feel when interacting with the business? Is it positive? If so, the interaction is seen as valuable. Enhancing a customer’s experience is job number one of any business. Add value. Always. Coleman suggests that getting better at servicing customers creates the added benefit of being a differentiator that’s tough to copy.
If businesses approached their customer interactions in the same way movies approach their audience interactions—figuring out the emotions a customer should have every step of the way—the entire world of business would change.
Coleman offers an eight-stage framework with which to view and approach the life cycle of your customers. Each component starts with an A.
The eight stages of the Customer Life Cycle (8 A’s):
- Assess.
- Admit.
- Affirm.
- Activate.
- Acclimate.
- Accomplish.
- Adopt.
- Advocate.
In the Assess stage, potential customers are looking at options. They are reviewing with whom they may want to do conduct commerce. Prospects are trying to determine if you will be able to solve their problem. To enhance your position here, it’s important to help prospects get as real a sense as possible as to what it will look and feel like to do business with you. Instead of offering platitudes like, “we care about our customers,” or “our post sale support is outstanding,” share the specific steps of what their experience will entail post sale. Introduce them to similar customer case studies. Help them understand who they will be talking to and how they will have access to support. Set the stage for understanding what the future relationship will look like is what Coleman calls preframing. It starts by not rushing to close today’s transaction. Help them see that you are here to support them and engage with the long term in mind. You want them to be a customer tomorrow more than just today.
Coleman suggests we ask ourselves, “when prospects review your marketing materials, do they get a good idea of what their experience is going to be like if they become customers?” We want to help prospects get a sense that they will be seen and validated as customers. Help your customers realize they will continue to be treated as important and that their requirements continue to matter to your organization post sale.
During the Admit stage, a prospect acknowledges a gap in their world and believes your organization may be able to bridge this gap. They become hopeful, even excited, that your organization may be the solution to their problem. Less skeptical, they now commit to your service. In most organizations, this is where the sale is usually considered as closed. This is typically the peak point of happiness for both customer and organization. Coleman suggests that companies look to celebrate their customer’s positive feelings with them. A shared celebration commemorated with a personalized memento serve to reinforce that the customer has made the right decision. This can be accomplished by preparing a quick video from your team welcoming the customer and telling them a few things about what they can expect in the coming days and weeks. Coleman encourages us to ask of our organizations, “Describe in detail what happens at the moment of “the sale”: How long does this time period last? What does it “feel” like? What does the customer need to do to make it “official”? What do you do in this moment?” Unfortunately, the admit stage is short lived and customers quickly drop into the Affirm stage.
During the Affirm, the satisfaction of having a solution to a problem shifts into doubt. Even buyer’s remorse can kick in. This is notably the case where the time lag between purchase commitment and product delivery is large. Where there’s any time between the solution being immediately implemented successfully for a purchaser, they have time for our friends, FUD, fear, uncertainty, and doubt to creep in. Knowing this stage is naturally coming separates you from most. Putting in a process to help a customer transition to sustain their commitment to your organization is a powerful opportunity. Coleman writes, “By designing your business to include a smooth handoff, you can significantly improve customer confidence.” Your purpose at this point is to help affirm the customer’s decision to do business with you helping them to answer affirmatively that they made the right choice, and your organization will help. Your job is to aim to fill the FUD with EASE where EASE is empathy, appreciation, specifics, and expectations.
We can offer empathy by showcasing similar customer experiences. Gratitude for their commitment to you helps them feel appreciated. The balance of this stage is about building belief in your company’s systems and structure by sharing as much as you can about what they will be experiencing and when. Have you taken the time to anticipate what your customer’s experience will be like with your company? Do you take the time to ask new customers what their concerns or doubts may be? Can you give them a timeline and checklist of things they can expect from you? Detailing warranties or guarantees that your business provides is helpful at this stage. So, too, would be introducing new customers to satisfied existing ones. A welcome care package also can support a new customer as they transition to understanding how you’ll do business.
The fourth stage, Activate, begins when the customer connects with what it has purchased from you. It’s the point, post purchase, where the product or service is delivered. This, like the affirm stage, should be filled with natural enthusiasm from your customer. They should be looking forward to getting what they purchased. Your goal at this stage is to ensure that customers receive what they expect as soon and as fully as possible. Are their expectations as to what they will experience and when clear and reasonable? Does your product or service do what you say it will do and what your customer thinks it will do? Think of how you feel when you open an Apple product and can put it to immediate use. It comes with a partly charged battery in carefully constructed packaging. You feel special opening it and your excitement is rewarded by being able to immediately enjoy using it due to its readiness to be used as well as ease of use.
This is where you can over deliver relative to your promises to reinforce your customer’s right decision. Coleman suggests, “Make the first impression a shocking experience. Combine your welcome with access (transparency), insight (here’s the next step), and unexpected delight (resources for leveling up the relationship).” If you’re delivering a product or service, you can accompany the delivery with an email, a personal video, or other written materials that help your customer get up to speed enjoying the benefits of what has been received. The goal is to help customers begin to derive their desired benefits from your service as soon as possible.
As a customer receives your service, they enter the Acclimate stage. Here, customers get to know how your organization operates. Customers begin to understand and work with your processes. The key here is to recognize that your policies and procedures may be routine and obvious to those in your organization. However, to your customers they are new and may not make sense. Whether you’ve provided terms and conditions or highlighted policies to them in materials or conversations, this type of information is typically scanned or not fully absorbed. Coleman notes, New customers don’t have this understanding and need more handholding than you think.” Companies assume a customer’s knowledge of this step at their peril. This is a stage where over-communicating can go a long way to building a long-term relationship. Acclimate is another area where there can be wide disconnect between a company’s belief in how it is doing against what a customer feels as their experience.
Coleman suggests a company introduce customers to the “organization’s culture, people, processes, and systems in a way that allows them to get comfortable with the adjustment to a new environment.” This is both a company’s responsibility and opportunity to stand out. Don’t leave new customer’s hanging. Err on the side of working closely with customers in early days to bring them along. Reduce their uncertainty by increasing contact points. Use any chance you can to increase communication provided. During the acclimate stage, absence does not make the heart grow fonder. Can you show a process map to your customers which details what they can expect and when? Can you schedule an email drip campaign which brings new customers along while keeping them fully informed? Do your customers know who to go to when they have questions? Your ability to stand out at this stage is directly related to how well you know and have detailed your internal workflows.
Coleman offers several questions to guide us, “How do you hold your customer’s hand while they are getting familiar with working with you? (Hint: Do you have product directions, Gantt charts, process maps, an online customer portal, regular check-in meetings, etc.?) Describe in detail various things you do to help customers navigate your process. How long does it take before they start to see results? What does it “feel” like? How do you mark milestones along the way? How do your customers know what happens next?”
From Acclimate, a customer moves to the Accomplish stage of the life cycle. This is achieved where the customer gets the benefit they were looking for when committing to your service. Again, there can be a wide chasm between what a customer thinks it is getting with a purchase relative to what the supplier believes it is providing. Are you clear as to what your customer is seeking to achieve? Will you be able to recognize when they have received this? Can you craft a way to celebrate with them their “win?” Coleman encourages us to, “Describe in detail the goal that the customer seeks. Do you describe it the same way the customer does? What does it “feel” like for the customer to accomplish this? How does the customer know they have achieved it? How do you know that the customer has achieved it? What percentage of your customers do you think achieve the goal(s) they had when purchasing your product or services? What percentage of your customers are you certain achieve those goals? In your current business, do you create remarkable experiences during the Accomplish phase? If so, what are they?
Ideally, we’ve satisfied our customers and delivered our service. The goal now becomes to retain their support. In the Adopt stage, the customer begins to develop affinity for your organization. They are proud to be associated with purchasing from your organization. They are realizing the expected benefits and are working well with your organization. In the Adopt stage, your customer begins to own responsibility for the relationship. Coleman points out, “To “adopt” means to take on an enhanced level of responsibility for a relationship.” Customers feel comfortable contributing suggestions for improvement at this stage. Your objective at this stage is to continue to celebrate their commitment. Provide special rewards for existing customers. You could also consider hosting social events for existing customers. Getting to know existing customers on a deeper level becomes the goal.
If things have gone well, your business will reach the heights of the holy grail of the customer life cycle. That is, the Advocate stage. Here, customers are such fans that they seek to introduce others like them to your organization. Referrals become the heart of your marketing efforts. Can you create incentives for your best customers to encourage others they know to consider your organization? You can help your best customers help you by assisting them in drafting testimonials. Celebrate their business and connection with yours in an article or video they can share with their stakeholders. Help them communicate the benefits they have received from working with your organization.
Coleman’s framework for working with prospects through committed customers offers a practical process to pursue in building your business. Recognizing the value of retaining customers is the starting point to building a better customer service experience. Seek to service your existing customers to separate yourself from competitors.
