How employees, managers, and executives handle these situations has a direct impact on how customers feel about the company's staff, product and service. Extending a credible apology for the right reasons at an appropriate time should become a standard component of any company's customer care policy.
- Business Fact No.1: It is far easier to sell something to an existing customer than it is to acquire a new one. Loyal customers bring with them a lifetime value—a value beyond the individual sale. Conversely, the loss of a loyal client represents a significant accumulated loss over time. As long as they remain satisfied they will continue to buy current and new products and services. And each new product acquired by a loyal customer brings with it the added benefit of credible referrals and an expanding customer/sales base.
- Business Fact No.2: Referrals reduce sales cycles and sales expenses while building a quality base of satisfied customers who, in turn, provide additional referrals.
Companies that generate this self-perpetuating cycle typically succeed through excellent cusotmer service sales (as opposed to customers) are never enough to create and sustain this cycle. Understanding the importance of customers and customer loyalty is crucial to building and maintaining a successful business.So how can we help ensure customer loyalty?Some years back a senior executive sent a letter of recommendation for a person seeking a marketing job in the technology industry. The letter stated that the candidate was "exceptional not only for their ability to do their job when things were running smoothly but more importantly, for how they handled themselves when things got tough".
The reference letter went on to provide examples of difficult circumstances the company faced and how the candidate successfully worked her way through them. He cited these cases because he felt they would provide a clearer, and in his words, "more telling" assessment of the candidate's best and most relevant qualities. He was in fact giving a very strong recommendation based on how the candidate handled crisis (negative) situations.
The point here is that when we evaluate a person's business savvy and competence we are more inclined to assign a high value to the person's ability to deal with problems and crises—how they handle routine is somewhat less relevant.Customer loyalty stems not only from the quality of your products or service but very often from how you handle situations in which customer expectations have NOT been met.The problem is that years of routine and successful business relations with customers often raises their expectations and standards—which becomes increasingly difficult to sustain over the long term. Very loyal customers are often the ones most likely to be hurt when small mistakes are made. - Business Fact No.3: Mistakes and errors are essential to consider when developing best business practices, precisely because they are inevitable. Failures represent ideal opportunities for strengthening customer loyalty and satisfaction. Ironically, welcoming the occasional failure may be a prudent business practice. Issues and problems are a part of doing business. It goes without saying that business today is more competitive than ever. But it has never been more important to focus on customer loyalty and to appreciate the added value of prioritizing 'customers' over individual 'sales'.
An effective business apology, when well crafted and handled correctly can solidify relationships, enhance your company's reputation and build trust, satisfaction, and customer loyalty. Can you really afford to ignore failures and avoid apologizing?
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