The Top Three Ways to Lose Customers
Reprinted courtesy of Larry Hunt Wide Format News
By Dave Fellman
Most of what I’ve written over the years has been about gaining new customers or maximizing the value of the customers you already have. This time I thought I’d write about losing customers—or at least about how printers seem to lose them far too often. I’m hoping that you’ll see some of the things you may be doing—or not doing!—in this discussion, and that this will help you to hang on to more of your current customers. The fact that one of the hard truths of this business is that gaining new customers doesn’t help you to make money if you’re losing them as fast as you gain them!
Quality Failures: One of the most popular ways to lose customers is simply to deliver printing that doesn’t meet their quality expectations. One of my clients has a sign on the wall in his production area that says: “Ugly Printing Creates Ugly Situations...And That’s The Best Case Scenario!” I love that sign because I know it reflects the absolute truth. The people who tell you they’re unhappy at least give you a chance to make amends. Hard experience has shown that many people won’t tell you that you’ve let them down in terms of quality; they’ll just stop buying from you!
How do you avoid losing customers because of quality failures? The first thing you do is to avoid those failures in the first place! This requires a combination of training and quality control, with a measure of good management thrown into the mix. First you teach your people to do their jobs well. Second, you establish quality-control procedures that support your quality objectives and provide accountability. At the very least, you need to be able to identify the “who/what/where” surrounding whatever quality problems are occurring. When you identify the causative factors, you correct them through training and/or discipline. You also pay attention to your equipment, because even though it’s often said that only a poor workman blames his tools, it’s also true that sometimes the equipment is the problem!
The second thing you do to keep from losing customers because of quality failures is to follow up on every job— or at least on a regular enough basis to ensure that no one can establish a good relationship with another printer before you have a chance to do some damage control. More on that will follow.
Service Failures: Another very popular way to lose customers is to fail to meet their delivery requirements. The client mentioned earlier has another sign on his wall now that says “Late Deliveries Too!” (That one went up fairly recently to remind his people that they can work very hard at eliminating quality problems—as they have—and still have service problems bite them where it hurts!) How do you avoid losing customers because of service failures? It’s largely the same recipe as that for quality failures: don’t have them in the first place, and if you do, be sure to do whatever damage control you can in an effort to minimize the damage to your customer relationship.
Remember, too, that there’s more to the definition of service failures than late deliveries. It’s also far too common for printers to suffer from the quality of their service (or more correctly, from the lack thereof.) Poor communication, sloppy order entry and inadequate attention to detail are the common culprits here, and again, this is a problem that can be solved only with training and management. Remember that quality-control policies and procedures are just as applicable to the quality of the service as to the quality of the printed product.
Buy Time! Something else that you can do to minimize the likelihood of missed deliveries is to buy time at every opportunity. I’ve told most of my sales-coaching clients to put a sign up on the mirror in their bathrooms at home so that they’ll see the words “Buy Time!” every morning and every night.
If you’re smart, you’ll never tell customers that they’ll have their jobs completed on some specific day based on your “normal” turnaround time. What you’ll do instead is ask “When do you need this?” If the answer is something longer than your normal turnaround time, you say “We should be able to do that” and if it turns out that you can deliver the job sooner, you’ve set up a situation in which you’ve under-promised and then over-performed. That’s always a good thing! If their deadline is the same as your normal turnaround time, you say essentially the same thing but with one important addition. “We should be able to do that,” you say. “But if it comes down to needing another day or so, would that still be OK?” The extra day or so may not always be there, but if it is, you want it!
If the deadline is shorter than your normal turnaround time, you say, “I’ll have to check our production schedule to make sure we can meet your deadline, and I’ll get back to you as soon as I do that.” Remember that every “rush” job that gets plugged into the production schedule is going to impact every job in line behind it. When you accept a rush
job to make one customer happy, you’re taking the chance of making some other customer(s) unhappy. The benefit of this strategy is that the time you buy on any other order increases the likelihood that you’ll be able to handle the rush job or another calamity such as equipment breakdowns without jeopardizing your relationships with other customers.
Contact Failures: The most popular way to lose customers, it seems, is to lose touch with them. Industry-specific research indicates that only about 10 percent of all customer losses are due to quality failures, and only another 10 percent is due to service failures. The research indicates that 60 percent of all customer loss comes from simply losing touch. (To complete the picture, 15 percent of the people who change printers say they do so because they’ve found “better” pricing, and another 5 percent change for a variety of miscellaneous reasons.)
How do you keep from losing touch with your customers? The best strategy is to establish some interval that you will simply never let go by without either you hearing from them or them hearing from you.
I work with my clients to build a contact calendar that sets the intervals at either one, two, four or eight weeks. The first step is to assign the appropriate interval to each customer. The second step is to lay the timeline out visually on the contact calendar. The third step is to transfer the whole interval plan into a computerized contact manager such as ACT or Goldmine. The fourth step is to pay attention to the time when you’re hearing from people. When the interval reminder comes around and the customer hasn’t called you or come in to see you within the designated time period, you call the customer or go to see him or her!
Direct Mail? I’m often asked if this is something that a direct-mail program can do for you, perhaps sending out a monthly newsletter to “keep your name in front of your customers.” My answer is that direct mail can do exactly that—keep your name in front of your customers. It won’t, however, tell all of them how much you love them and value their business! Let’s face it -most of the newsletters that printers send out go unread. That’s OK, though, because as far as keeping your name in front of them goes, it’s enough that the newsletter registers at either the conscious or subconscious level. “Oh yeah, here’s that newsletter from my printer. I don’t have time to read it, but I do know they’re one of my suppliers.” That qualifies as FOMA—Front-of-Mind Awareness.
The critical question is whether FOMA and “keeping your name in front of your customers” are enough. I don’t think they are. First, not everyone you send a newsletter to will see it and register the contact. Second, some will see it but not read it, and even though you benefit from the front-of-mind awareness, they don’t read the words and see the pictures, they don’t get any of the added value that a well-written newsletter can bring to a seller-buyer relationship if they don’t read the words and see the pictures.
I think it boils down to this: direct-mail experts will tell you that direct mail by itself is only so effective. I’m sure you’ve heard that response rates in the 3 to 5 percent range are considered pretty good. Direct mail that is followed up with a phone call is even more effective, though, and I think a direct-mail program augmented by a interval telephone call or face-to-face contact program gives you pretty good coverage of your current customers.
Now here’s what I mean by coverage. First of all, you get the opportunity to tell them things—about new products, new services, and about how much you love them and value their business. Second, and perhaps more important you get to ask them things—like “have you been completely satisfied with both our quality and service since we talked last?” If they haven’t, you’re a lot better off hearing it now than having them simply stop buying from you. Hopefully, you’re within that window where they may not be completely happy with you, but they haven’t taken irrevocable steps to replace you. In other words, you still have a chance to salvage the relationship!
Implementation: If I were you, I would make someone in my organization responsible for all my customers. With an outside salesperson, that would certainly mean holding that person responsible for maintaining contact with every customer. How about the walk-in customers and house accounts? I would assign each of them to somebody— probably a CSR, possibly a DTP/Design employee—and for an important customer, I’d make myself responsible!
If you’re like most of the quick/digital/small commercial printers I work with, you have many “inactives” on your customer list. They’ve bought from you in the past, but they’re not buying from you right now. Let’s stop and think about how people like this became inactive. One possibility is that they don’t buy printing/copying anymore, possibly because they’re not in business anymore. If that’s the case, you’re blameless (except you should feel silly if you’re still sending them monthly newsletters). The only other possibility is that you lost their business because of quality failure, service failure or contact failure. It may be too late to do anything about these failures, but it’s not too late to try to prevent them from happening with your current active customers!