What's the easiest way to generate revenue for the upcoming business year? The Harvard Business Review has the answer:
"Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. It makes sense: you don’t have to spend time and resources going out and finding a new client — you just have to keep the one you have happy. If you’re not convinced that retaining customers is so valuable, consider research done by Frederick Reichheld of Bain & Company(the inventor of the net promoter score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%."
It baffles me how some businesses spend so much time and effort to attract new business while ignoring the gold under the feet. In today's hyper-competitive business environment, it's more important than ever to take care of your customers. You can bet that if you don't, there are plenty of sharks circling to take your customers. You wake up every morning with the score 0-0 and you have to prove your value every day - nobody cares what you did yesterday.
As someone who's spent over 25 years in customer-facing roles, I've learned a lot of lessons - most of them the hard way. So here are a few tips and tricks to provide excellent customer service as a strategy to generate revenue from your existing customer base with up selling and referrals.
Use active listening to improve your communications (and service)
As more and more customer service is delivered via teleconferencing technology like Skype and GoTo Meeting, active listening is vitally important. Remember Mehrabian's principle: Communication is 7% verbal (the words you say), 38% tone of voice and 55% non-verbal (facial expressions and gestures.)
Think about that, if you turn off your camera, you will receive at most 45% of the message. If you're working internationally and using a second language, you're probably getting about 30% of the message with the camera turned off. One simple way to improve communications is to turn your webcam on!
Regardless of whether you meet face-to-face or online, active listening is an effective way to close communication gaps. There are a lot of elements to active listening, but here is what I recommend to the people who work with me - the Did I get that right? Is there anything else? tactic.
Let's say you're working with a customer and you cover 3 service issues. At the end of the meeting, follow this process.
- Restate your understanding of each point, one at a time. After you summarize each point, ask, "Did I get that right?" Here's the important part: after you ask the question, pause and listen. Give your customer time to think about it and answer completely. The more they talk, the better. If they are clear about what they want and expect, it makes it easier for you to give it to them.
- After you ask if you got it right and they've answered, ask the second question, "Is there anything else?" Again, pause and listen! This question gives the customer a chance to re-assess their answer and clarify and add to it. Again, the better you understand what they want, the easier it is to give it to them.
- Send an email re-stating your understanding of the conversation. This gives the customer a chance to review their answers and share your understanding with others on their team to clarify their intent even more.
This active listening technique goes a long way to overcoming communication gaps that arise out of a lack of context in the original conversation.
Use peer review to minimize mistakes
Prior to starting my business, I was a management consultant with the international HR advisor, Mercer. They had a thorough peer review process that required a "second set of eyes" to review client deliverables before they could be sent to the client. This is something that we can all use, even in small businesses.
After all, we all make mistakes - particularly when we're trying to multi-task several things at the same time. We can all slow down a bit and have someone take a look at our work product before we deliver it to the customer. Here are a few things to keep in mind for a peer review process.
- Start by looking for spelling and grammar mistakes. This is something that someone who is not close to the project can quickly identify. Even someone who doesn't have subject matter expertise can help you identify embarrassing mistakes.
- Review your deliverable against client expectations identified in active listening. Did you cover everything that they said was important? If not, why and when and how will you address it? Share the email detailing the work requirements with the peer reviewer and have them use it as a checklist.
- Document the peer review process. Set up a formal process where you document that important client deliverables have been peer reviewed before they are sent to the client.
Sometimes it's best to slow down and get things right - it saves a lot of trouble on the back end.
Referrals are the holy grail, don't let them slip through your fingers
I've developed a lot of relationships over the years and am often in a position to refer businesses to people that I know. I'm often surprised at how lackadaisically people respond to them.
To me a referral is the easiest way to grow my business - it's like walking down the street and getting hit on the head with a bag of money. Although referrals are great sources of revenue, their only opportunities until you make the sale and have a happy customer. And the biggest sin in business is to let an opportunity slip through your fingers because of a lack of effort.
Here are a few tips I have for people on the receiving end of referrals.
- Don't embarrass the person who referred you by giving anything less than your best. If the referral doesn't fit your ideal customer profile, let everyone know as soon as possible and recommend another way to help them. Share this recommendation with your referrer first - she may have someone else in mind if you're not interested.
- Make contact with the potential referral as soon as possible. I've been surprised by people who have never followed up with the referral I've given them. It's incredibly embarrassing to get the phone call that says, "I've never heard from the person you said could help me."
- Keep the person who referred you in the loop. Both in the sales process and in service delivery, let them know how things are going. This is particularly important if you're having problems - they might even be able to help you.
- Return the favor. Find a way to return the favor to the person who referred you. Refer a piece of business to them or take them to lunch. At a minimum, thank them! It goes without saying that you should honor the referral by giving excellent service.
One thing I can tell you is that if you blow an opportunity, you're not going to get a second one. Make sure you make the most out of every referral you get.
I'm hopeful that the coming year will bring great opportunities for all of us. But remember, every new sale will require a great customer service effort. Make sure you have a documented customer service process in place and you will be able to leverage new business for even more growth.