Business Changing

Profit and Growth Specialist

The 5 letter word that can change your business

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(As published in the Sunday Star Times, March 8, 2015: http://www.stuff.co.nz/business/opinion-analysis/65860029/winning-ways-mean-showing-some-heart)

 

What is one of the secrets to building a raving fan base of customers who will advocate for you over and over? Do something unexpected for them. Customer expectations are quite low, after years of declining customer relations, so take an opportunity to wow them when it presents itself and you’ll quickly gather advocates. I had a case of this today as I opened my mail…

 

I am quite big picture in how I run my business and don’t focus down to the last cent (I understand the dollars but not the cents). Today I got a letter from AMI Insurance saying, “Sorry, we have had a mix up. We have accidentally overcharged you for the last few payments on your car insurance”. A mix up that I had no idea of. And would have possibly never noticed. To recognise the error, they gave me one month’s car insurance for free. Awesome – so first they admit to a mistake that I had not noticed and then they willingly offer remuneration as an apology.

 

I am not saying that AMI’s actions are rocket science, but I am saying it did impress me. I know that many businesses who stuff up on some front will stay quiet and hope that it is never noticed.

 

I remember in a previous business I ran, we had an issue with one of our products. I used the product myself and within one minute the product had pretty much fallen to pieces. I thought, “That’s bad” and then I thought, “Hang on a minute, if it has done this for me, how many have we sold?” Answer: hundreds. OK, Houston we have an issue! Luckily we had a customer database that tracked the majority of the customers who bought this specific product. The first thing I did when I got to work that morning was write a letter to those customers. I explained that they might not have an issue but to please be aware that the product they had bought may be faulty. We offered replacement product for free (of course) and something else on top of that. A bit like AMI offering me that free month’s insurance.

 

The feedback I got directly from customers was immense. I think about 40% of the customers that we contacted came back to me personally and said, “The product you sold us is totally fine, but thank you so much for telling us that they might be an issue and we are really impressed with your proactiveness”.

 

If you notice a mistake or a defect, you have the chance to come clean yesterday or to wait until tomorrow to talk to customers (like the issues with cars that have been in the news over the past several years).

 

The moral of the story is when you have done something wrong or you think that something may go wrong in the eyes of a customer, the best thing you can do is be super proactive and let them know – before they find out. Sometimes you finding out might mean that you hear from a customer who has an issue. When you get an issue from a customer, don’t sweep it under the carpet – go deeper and see if this issue is replicable or a true one off. If replicable, you know what to do…

 

Speaking of which, I know that things are never perfect (companies are run by humans, after all), but how good are your systems and checks to make sure that your customers are receiving what they are expecting? How acceptable is your defect rate or your return rate or your complaint rate? I always worked to a defect rate of more than 1% is unacceptable, but it depends on what you do – if your product is matter of life and death then obviously a defect rate is not allowed. How good are your systems (and training, people etc) in ensuring your delivered product is at the standard that you are proud of and the standard that will develop raving fans?

 

Speaking of raving fans, they say the biggest ones are customers who were once unhappy with you but had a complete turnaround after having their issue dealt with in an A+ manner. Be thoughtful with how you handle your mistakes or issues – treat it as an opportunity.

 

Zac de Silva is an award winning business coach, director and speaker. He also runs 6-week business bootcamp intensives. See www.businesschanging.com

 

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