When guests come to your home or office, you do your best to make them feel welcome. As the saying goes, you never get a second chance to make a first impression.
So why do so many companies treat new customers so badly?
Consider the average retail transaction. As a new customer of a specific retailer, you are more likely to be given annoying forms to fill out than to be welcomed with a smile or a gift. And when an incentive is offered, it’s usually a coupon that provides more benefit to the retailer than to you.
Joey Coleman says business has it all wrong. A Denver-based customer-experience consultant with his own firm, Design Symphony, Coleman says showing your customers more love in the first 100 days of your relationship increases customer retention and reduces lifetime churn. At the Mastermind Talks event in Toronto on May 23, he urged attendees to pay more attention to the customer lifecycle.
“Twenty to thirty percent of your customers are going to leave you in the first 100 days,” he says.
One of the biggest mistakes companies make, he says, is handing off new clients from the always-eager-to-please sales department to more jaded account managers, who rarely make a fuss over new customers. “Companies focus too much effort on the sale when they should be looking at satisfaction and loyalty,” Coleman says. “If you can get the first 100 days right, the fact is you can have a customer for life.”
Coleman says a few companies that are known for client service, such as Zappos and Nordstrom, are good at delighting new customers with special gifts and surprises. He says many banks are also getting better at embracing new customers; Coleman says it’s in reaction to high churn rates that can see as many of 36% of new clients leave a bank in the first year. He maintains that spending a little extra on customer retention may be the best investment you can make: “If you can decrease your customer-defection rate by 5%, you can get a 25%-plus increase in profits.”
But many companies don’t realize how creative thinking can impact customer loyalty.
For instance, on the second day of the Mastermind conference, Coleman asked a prominent Canadian entrepreneur what his company does to promote stronger customer relationships following the sale. The entrepreneur misunderstood the question, twice, suggesting that his otherwise award-winning firm doesn’t pay much attention to building loyalty.
Coleman cites six ways that companies can interact with customers: through mail, email, phone, video, in-person, and through bonus gifts. He says most companies settle for just two of those channels, mainly, email and direct mail. To become known as a truly outstanding customer-service company, says Coleman, “why not try all six at once? You’d become remarkable.”
Coleman recommends companies develop a First 100 Days strategy. Here are three steps he suggests to finding out what your customers want and building more lasting relationships.
The three steps:
- Learn more about your customers. Using a PowerPoint screen and a list of conference attendees, Coleman surprised the audience by showing how much he already knew about them, through their Facebook and LinkedIn profiles. He was able to point out individuals’ schools, job titles and hobbies, enabling him to make educated guesses about their lifestyles and what kinds of rewards would interest them most. “The key is to investigate in a way that you find bonds to your customers.”
- Personalize your interaction with customers. If your company can convey a more personal, fun, caring attitude in its communications, says Coleman, “is it fair to say that they would stop thinking of us as a cold, undead organization?”
- Surprise your customers. Create opportunities to astonish and amaze them. “Build in moments of delight,” says Coleman, whether it’s through little gifts, samples, favours or information. “Do two or three in the first 100 days.” How customers experience your business, he says, is your company’s “make or break” activity.
Asked if he knew of any Canadian companies that do this well, Coleman said he had just met one at the Mastermind conference. Staff.com is a global personnel agency specializing in remote workers, contract staff who work from home rather than come into your office. Co-founder Liam Martin, who works out of the Ottawa office (when he’s not working
from home), says Staff.com’s clients tend to be busy entrepreneurs always on the verge of stressing out. So his company’s “welcome gift” to new clients is a package of herbal tea, that arrives with a comforting message that says: “Please sit down, relax, and have a cup of tea on us.”
In business just over a year, Staff.com has also experimented with a second surprise a month later: sending new clients a sleeping mask, as a tongue-in-cheek way of reminding them to pause and relax. “The message is, you can rest easy knowing that we’re taking care of your staffing needs,” says Martin.
Staff.com has split-tested its gifting efforts, sending bonuses to some clients and not others. Although it’s early days yet, Martin says the company has seen a double-digit increase in loyalty and customer value among the clients who received these packages. In addition, he says, these bonuses help Staff.com build deeper relationships with companies that appreciate spontaneity and personal touches: “We’re attracting the right type of customer for us.”
After meeting Joey Coleman, Martin says Staff.com will be increasing its customer-delight efforts, adding new premiums and finding new ways to interact with clients. “We’re going to mix it up a bit.”
For those who want more on the First 100 Days, Coleman says he will be working on a book this summer. But his work is already paying off: attendees at Mastermind Talks voted his presentation the best among the 15 conference speakers, winning Coleman a cool $25,000.
Rick Spence is the Toronto-based author of the Canadian Entrepreneur blog and a consultant on marketing, strategy and business growth. You can reach him at firstname.lastname@example.org.
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