Keeping up with the vigilante consumer: customer retention, customer service

• If you increase customer retention just 5% more, your profits will increase 100%.
• U.S. population growth is projected to be 1.1% in the next twenty years.
• Disposable income in the US is growing only 2% every year.
• US businesses will invest more than $1 billion this year on computer technology, just for customer service departments.

The interesting bits of information above basically mean that the number of customers are dwindling. Which is why customer service is today’s competitive advantage. If we don’t have masses of potential customers, we’d better keep the ones we do have happy. Ecstatic.

What is a vigilante consumer anyway?

First, a little historical perspective. Conventional marketing wisdom always urged us to sell either to the classes or the masses. If you’re selling $100,000 cars you appeal to the classes, and if you you’re selling Hyundais, you appeal to the masses. That’s simple enough.

But then came retailers like WalMart, who are known for good buys, and whose hallmark is superb customer service. WalMart gave the masses appreciation and recognition. “Now the masses know class,” said futurist Faith Popcorn, who also coined the term “vigilante” consumer. The vigilante consumers are not as dangerous as they sound. They just want value, service, convenience, choice and lots of attention.

Don’t think of all this as bad news. Quite the contrary. This is a great time to be alive and in business. Armed with the facts, drive and an open mind, we can begin planning strategies that will bring us challenge, fun and . . . profit.

Start at the beginning

What is your philosophy, your vision for doing business? “We treat you right.” “Solutions not problems.” Think it through carefully and, when you’ve decided, design your business operations and activities to support that vision. Now, state your product or service in one simple, short sentence that everyone will get. For example, one of my favorites is: “We sell stuff with your name on it.” That’s the statement of Jonathan Stone’s specialty advertising firm Another Dancing Bear Production.

People do business with people they know because they’ve heard about them from a friend, read about them in a magazine. So your job is to make yourself known to prospective customers. I follow advice given to me by a multimillionaire client from my hair salon days. Manny Lozano said, “I don’t care if you can’t squeeze another customer or hair stylist in the salon, you still keep promoting. Because you have to keep convincing your customers that yours is still the salon to which to come.” In other words the real sales comes after the sale. I have followed his advice all these years and became an unabashed, relentless self promoter of my business.

All I ever wanted for my business was an unfair advantage. I’m not talking about lying or cheating. Exactly the opposite. An unfair advantage is doing every tiny little thing better than your competition. In this instance, your competition can be your best teacher.

Who knows what your customers want?

In a shuttle bus taking me to the airport after a speaking engagement, I began schmoozing with the driver as I am always looking for material. Knowing his service was not affiliated with any of the resorts, I asked if the guests he drove told him about their experience at the hotel. “Yes,” he said, “in fact, the general manager of the property where you were staying brings a big box of donuts and has coffee with our drivers once a month. We not only tell him everything we hear about his property, we tell him everything we hear about his competitors.” Think of all the businesses that have spent a fortune on management consulting firms to find out what this resourceful general manager gets for a box of donuts and an hour’s conversation every month.

Think about who in your business knows what your customers want. Is there a service that provides you and your competitors something that might just provide you with an effective, economical market sample?

Don’t overlook opportunities close to home

In your role as an unrelenting self-promoter, start off in your own backyard. How many people in your office building know you and what your business is all about? Introduce yourself to people in the hall, in the elevator of your building. Let everyone in the immediate vicinity of your office know who you are and what product or service you offer.

During my hair salon days, a friend, whose hair salon in Oakland was not thriving, said, “I have clients who drive from Fresno for one of my haircuts.” I was forced to tell him the truth. “Rod, will you get a life. People who drive 18 miles for a haircut feed your ego. What feeds your family is people who walk out of their offices, their homes, their apartments and walk or drive five minutes to you.” Do not overlook the opportunities close to home. Tell them about your superb product or service and how you do things differently than your competitors and you’re right there five minutes from their doorsteps.

What can you do to make your vigilante consumers feel special and appreciated?

We know now, great customer service is no longer good enough. We have to exceed the vigilante consumers’ expectations. One individual knew this way before the rest of us caught on. I met Gary Richter at a banking conference several years ago. He runs a small boutique bank in Naples, Florida. He told me about a situation at his bank that speaks volumes about his bank’s position on customer service. At 5:20 one Friday afternoon, the bank received a call from an elderly woman who needed to cash a $200 check. The bank closed at 5:30 and she was 20 minutes away. Many of us would say, “Of course, please come over, we’ll stay open for you.” But Gary’s bank believes in giving exceptional service so they told the woman that one of their employees would bring her $200 on his way home and that he would pick up her endorsed check.

As it turned out the woman had her extensive financial holdings at a large national bank, and after her positive experience with Gary’s bank, she moved all her assets and investments to his bank.

Today, Gary’s bank continues to focus on superior customer service. “I tell my employees, if we roll out the red carpet for a billionaire, they won’t even notice. If we role it out for millionaires, they expect it. If we roll out the red carpet for thousandaires, they appreciate it. And if we roll out the red carpet for hundredaires, they tell everybody they know.” And you can take that to the bank. In six years since the bank opened, it has grown from 16 employees to 180; and they’ve grown from $6 million to $330 million.

Build relationships with your customers

There are really only two types of customers: those who know and love you, and those who never heard of you. All businesses spend relative fortunes trying to get new customers and that will always remain important. But don’t spend the entire fortune on just attracting new customers. Spend some of those dollars keeping in touch with existing customers because you want to keep them.

One of the goals in growing your business should be that the same person you sold to today will still be spending money with you ten years from now. So don’t celebrate the close of a sale. Celebrate the beginning of a long relationship. People want to do business with people who appreciate them and look out for them. Which brings me to yet another salient point.

Seek strategic alliances

Strategic alliances is a relatively new term for something I learned long ago in business and that’s what I call “professional friends.” I developed friends in my business community who were looking for the same type clientele as I, but who offered noncompetitive products and services. Alan White, a professional friend, owned The Wright Shop that sold custom made suits and good shoes. I realized that if his customers could afford to buy custom made suits, they wouldn’t be scared off by a $30 haircut. So, I had gift certificates printed up that read: “To further enhance your appearance, The Wright Shop would like to present you with a gift certificate for a free haircut at Miss Fripp’s.” I paid for the printing of the certificates. It was a great plan. Alan looked like a hero to his clients. He was happy. They were happy, not only for the free haircut, but for the quality of hairstyling “Miss Fripp’s” stylists offered. And I was happy to be beginning relationships with these new customers.

These are a few suggestions to help you in building your business into a prospering dynamo. I know they work, because I continue to use these tips and techniques myself with great success. You can gather even more tips and techniques, by going to conferences, seminars, listening to competitors, customers, neighbors, friends. We can learn from everyone. Even if you think a technique won’t work for you, twist and turn it, see if you can put an adaptation of it to work for you.

As we slip into the 21st Century, we will no doubt create new buzz words for the sales and marketing game. No matter what new terms and phrases we develop, bottom line, we need to keep attracting new customers, cultivating and deepening relationships with our existing customers and treat them all with the kind of appreciation, consideration and integrity with which we want to be treated.