How you take care of your customers is a key factor in your business success. If you take good care of your customers, then you get to keep them as customers, plus they will multiply.

It amazes me how often I see businesses rip off their customers and wonder why they don't come back. Just recently I heard about a jeweller who sold a broken watch to a customer, figuring the customer will send it back to the manufacturer and the jeweller will be rid of some defective merchandice.

At the local electronics store they re-package returned items as new and putting them back on the shelves. The stories on this site alone will terrify you, and this is just one example of the kind of stuff some businesses do to their customers.

If you go for the one-shot business model, you have to keep finding new customers to sell to. In this model, you only focus on the transactions you can complete, and do not look at the people involved. In a small town, you can quickly run out of customers. To me this seems like too much of a losing strategy for any serious business to follow.

Why You Lose Customers

Clearly, how you care for your customer has a huge impact on keeping their business. In the global marketplace, there are always competitors, so you have to find ways to get and keep you customers if you want to succeed. If you don't take care of your customers someone else will.

The Half-Life of a Complaint

I got these statistics a long time ago, I think they are still valid today:

Things happen, and where you can really shine with a customer is what you do to resolve it. In addition to correcting things for customers who complain, you want to find out the other 26 more customers with similar issues and help resolve those too. Look at all the complaints as feedback that can help you to improve your business.

I was at a Starbucks this morning, and another customer dropped their newly purchased beverage. The staff immediately provided a free replacement, and of course cleaned up the mess while thanking everyone for their patience. It turns out that it is their policy to replace something like that. They do not want a customer leaving the store with a less than perfect experience, even if it is the customer's fault. The cost of the replacement beverage, at their cost, is nothing compared to the lifetime value of that customer. Plus other customers notice how the store treats customers and it reinforces their decision to shop there.

As a customer, I am willing to spend a little more if I feel the vendor cares about me and goes the extra mile. They add value to the transaction, and I feel justified in paying for it. Like most people, I don't like to feel I am being ripped off. So I avoid places that have a bad reputation, even though they have low prices. It was W. Edwards Deming who first talked about the benefits of working with a single supplier vs. going for the lowest bids.

It is not just the cost of the one transaction, but you have to factor in the stress of fixing problems that arise. If I can trust that a vendor will take care of me after the transaction, it means a lot to me.

Duncan