Friday, March 7, 2014

Day 25 - The Number One Way to Lose Business

I've thought about writing this topic for a while and have resisted since I didn't want this 100 Day Series to be about me preaching how I think other people should run their businesses. My intention for this series is to share my experiences of what I'm doing to grow my own business and hopefully inspire others to do the same.

The number one way to lose business is to not communicate with your customer.

Why is the most simple and easiest aspect of running a business done so poorly, so often?

While too much communication can be a problem, today I'll talk about too little communication.

I've found that a lack of communication can be categorized 3 ways -  assumptions, non-reponsiveness, and deceitfulness.

Assuming You Know What Your Customer Wants
I read a thread on the Etsy message board a few weeks back that was started by a confused buyer. She had purchased a product from a seller and noticed that it hadn't been shipped after a few days. She sent a message to the seller just asking for an update on the order. Shortly afterwards, her order was cancelled and the seller sent her a message letting her know that the recent winter storm had delayed her ability to ship items so she apologized to the buyer and cancelled the order!

The buyer didn't want the order cancelled and was really surprised the seller would make that assumption without even asking her. Had the seller just simply sent her a message explaining the weather issue and asking if waiting a few more days would be acceptable, the buyer would have happily agreed. Better yet, the seller should have sent the message as soon as she knew shipments would be delayed and asking for patience until the storm had passed.

Instead, the seller has lost a sale (a sale she already had) and the buyer will obviously never return to her store.

Never assume you know what your customer is thinking! If an issue comes up, quickly send a message to your customer explaining the problem and, if possible, give a few options for the customer to choose from to rectify the situation. By giving your customer options, you are showing your flexibility and giving the customer the ability to solve it in their best interest.

Not Responding to Questions (Pre-Sale)
This is such a common communication issue and we've all encountered it many times. You are interested in a product or service but need additional information so you either call and leave a message or send an e-mail with your inquiry - and you never hear back.

As a seller, I know it can be frustrating to constantly respond to questions that don't lead to sales, but that's part of the job! Just because someone asks a question doesn't mean they will always purchase. But I can guarantee one thing - If you don't respond, it will definitely mean they won't purchase.

Why not take the few minutes to answer? You never know what it can lead to. Think of it this way - Maybe that person is a staff member for the Oprah magazine and they want to feature one of your products in their next issue but needed to ask one small question to see if it fit into the theme of their article. If you knew that, wouldn't you answer in a heartbeat! Think of every inquiry as the potential to something big.

Not Responding to Questions or Concerns (Post-Sale) 
In my opinion, this is the worst type of communication gaffe you can make. If a customer has an issue or a question about a product already purchased and they are ignored, that is really bad business! No two ways about it.

Not responding to a customer problem can potentially lead to big losses in future business. With the internet at their fingertips, an angry customer can wreak havoc on your reputation, whether you feel the complaint is warranted or not. By not responding, you can turn a simple misunderstanding into really bad customer service, and no business wants that reputation.

In fact, responding to a customer issue can actually improve your business. In their book, Turned On, Roger Dow and Susan Cook conducted research with Marriott guests to identify which guests intended to stay at the Marriott again. They divided guest stays into 3 groups A, B, and C.
  • A = Nothing bad happened during their stay.
  • B = Something bad happened, but Marriott fixed the problem.
  • C = Something bad happened, but Marriott did not fix the problem.
The percentage of these three groups that said they would return to stay at the Marriott were as follows:
  • A = 89%
  • B = 94%
  • C = 69%
Talk about turning lemons into lemonade!

Dishonest Communication
While not responding to customer inquiries or issues can sometimes be inadvertent, dishonesty is always on purpose. And guess what - your customers will know it! If you make a mistake, admit it - don't lie. People will forgive you almost anything if you are honest and stay in communication with them. Honesty will always be rewarded in the long run. It may be embarrassing to admit that you've made a mistake, but you are human and people appreciate it when you tell the truth.

I had a situation a few years back when I had a project that was being worked on by an individual in another department (this was back in my corporate days). The deadline for delivery was Monday at close of business. By 4:30, I hadn't heard from him so I tried calling several times to get an update but received no response. Since his office was in another building, I asked a colleague in that same building to try to locate him. He was sitting at his desk and when I called again (this time with my friend standing by), he ignored the ringing phone. I ended up going home without my delivery and worse, no status on when it would be received. The next day, I located him and asked about the project. He told me that he had been pulled away from the office on a 'personal emergency' earlier that day and in his rush, neglected to contact me. Had he just told me that he was unable to finish the project within the time frame given, it would have been no big deal. He ended up finishing it the following day and we were able to make all our deadlines, even with the delay. But, his dishonesty changed everything. He lost all credibility with me and I specifically requested that he not be allowed to work on any of my future projects. To this day, I remember that incident.

Being dishonest will ruin your reputation instantly. And once gone, you can rarely get it back.

Communication is really so simple -
  • Give updates often, even if it's bad news.
  • Apologize for your mistakes.
  • Make it right.
What do you think? Do you have any experiences to share?

No comments: