FAIRBANKS — Here’s the answer, now what is the question?
1 percent die
3 percent move away
5 percent other friendships
9 percent competitive reasons
14 percent product dissatisfaction
68 percent because of attitude of indifference by some employee
You are right. The question, of course, is why do customers quit buying from a business? This study done by W. J. Powell Co. and reported in its book “Striving for Excellence in Customer Service” is as true for the mom-and-pop business on an obscure corner in Fairbanks as it is for the superstore on the main corner in Phoenix.
A study from the Research Institute of America says the average business will hear nothing from 96 perecent of unhappy clients who experience rude or discourteous treatment. The same study found unhappy customers will tell their experience to at least nine people.
These statistics are startling considering the average business spends six times more to attract new customers than it does to keep old ones.
Recently, a local business owner was lamenting a decline in customer traffic, wondering out loud, “Why are they not coming back?” I wanted to say, “Ask them, stupid.” In fact, a lot of businesses in Fairbanks would be shocked if they really knew what we customers thought. The bad news is 96 out of 100 customers won’t tell you if you don’t ask.
Let me give you an example. A good friend of mine shared a horror story with me about her experience Aug. 26 with a local “fast food” franchise near my house. After she placed her order and paid for it, she was told to join other gourmet diners waiting in front of the restaurant, cars running, waiting for their orders. More than 15 minutes later, a runner delivered her order. After she asked for a refund, the supervisor tossed her credit card voucher back at her and told her, “Don’t ever come back.” She won’t. I won’t. Neither will all the people she told this story to.
Now, for the good news. Unhappy customers typically will say they are unhappy if asked. The best news is you don’t have to hire a marketing consultant because asking doesn’t have to cost anything.
Stew Leonard’s Grocery in the Midwest offered his customers a small, mostly ignored, suggestion box. When Stew replaced it with a big suggestion box in front of a huge sign with his smiling face, with the text, “Hi, I’m Stew tell me how we’re doing,” he went from one to two comments per week to 40 to 50 per day. He listened to his customers, and as a result, Stew Leonard’s Grocery prospered.
But just asking isn’t enough. Company officials also have to listen. When my friend told that “fast food” supervisor she was unhappy with their service, she was that franchise’s best friend. When she drove off committed to fulfilling that supervisor’s desire she never return, she became the franchise owner’s worst enemy.
People who complain give us a chance to fix the problem.
Smart firms use mystery shoppers to discover customers’ experiences firsthand. One of the core courses in University of Alaska Fairbanks’ Applied Business Program is a customer service class, in which students mystery shop at local firms and report their findings to the class. Owners need to know what our students are learning. Two sections of that customer service class started Sept. 1. As a service to our local entrepreneurs, we would be willing to send one or two students to mystery shop at your firm and send you the results. Contact the instructors, Jennifer Harris or Scott McCrea, by emailing your request to me.
Fairbanksans are notorious for giving local businesses one and only one chance. To prove the point, ask yourself, “How many local businesses do I avoid after only one visit?” Exceeding customer expectation is the key to prosperity, so make ongoing communication with your customers a key component of your business’ strategic plan. Consider letting UAF’s Applied Business students help you.
Charlie Dexter is a professor of applied business emeritus. He may be reached by email at email@example.com. This column is provided as a public service by the UAF Community and Technical College’s Department of Applied Business and Accounting.