Like I said…the holy grail.

But some of us take those relationships for granted… at our peril.

Take an example a friend shared with me last night – she met an insurance broker a few years ago whom she liked and their company now looks after all of her business.  She has never in that time shopped around for insurance, or used comparison sites.  A few months ago, she was due for renewal and at the same time, she realised it was the broker’s daughter’s birthday.  So she sent a personal email wishing her Happy Birthday and mentioning her renewal needs, but she didn’t receive a reply.  Her renewal papers came from someone she didn’t know.  And now she’s considering shopping around.

There could be a really great reason the email wasn’t answered – the broker could have been away / ill / might have left the company / it may have been answered by another member of staff who didn’t realise the depth of the relationship.  But whatever the reason, the relationship has been damaged.  And it’s been proven that 67% of customers leave because of ‘perceived indifference’ – they think we don’t care.

According to a report ‘Loyalty: A prescription for cutting costs’ by Fred Reichheld of Bain & Company, in the financial services sector a 5% increase in customer retention produces more than a 25% increase in profit.

It’s time we realised that people think they’re important – and they are.  We need to treat all of our customers,  introducers and suppliers as individuals and respond to them and their family in a way that shows we care and that we’re grateful for their business.  It’s hard work – of course – but it’s easier than continually finding new customers!

I was born and bred in Cumbria, so I know these are isolated incidents and there are plenty of businesses who do offer great service.  I also know the rest of the country has examples equal to these but why, as a nation, have we come to expect poor service?

As customers, it’s usually the person you first meet in a business that creates your impression of that company.  For example, in a hotel the reception staff are crucial.  In a restaurant, the waiters and waitresses are critical, and for companies who speak to customers by phone rather than face-to-face, the telephone staff are the most important.

Unfortunately, these positions are generally low-paid and held in low regard by the public.  (This is quite the opposite in the United States, who lead the world in customer service.)  So, should we be paying more attention to that first impression?

It’s been shown that businesses with good customer service grow twice as fast as those with poor service, so should you be leaving anything to chance?

Customer Service can be the most cost effective form of marketing your company – it’s one area we look at first when we begin working with a consultancy customer, for two reasons:

1. If you could improve your customer retention by just 5%, the effect on your bottom line is between 25% and 125%
2. And, if your customer service is poor, why attract more customers in, just to upset them?  It’s better to solve the problem first

Remember – manners cost nothing.  We should all be grateful that our customers choose us – and thank them for it.

Check back tomorrow for more ideas on cost-effective marketing strategies to work into your plan for 2010.