Customer experience

Good customer service skills: Is your business a leaky bucket?

- August 20, 2005 2 MIN READ

Are you busy welcoming new clients through the front door, only to have existing ones go out the back? Good customer service skills can overcome this problem.

This is a question I always ask solo business owners who attend my marketing seminars because many soloists are so focused on attracting new customers they forget about retaining and providing good customer service to their existing clients.

Many are also unable to quickly identify who their most profitable customers are.

In the leaky bucket example we have two soloists in the same industry. Both attract 10 per cent new customers each year. Not a bad effort considering the increasingly crowded and competitive industry they operate in.

Soloist number one has a 95 per cent retention rate and 5 per cent slippage, while soloist number two has a 90 per cent retention rate and 10 per cent loss of customers.

Not bad figures to have, but after 14 years soloist  number one’s business has doubled in size while number two has stayed the same size.

Soloist number two is just treading water because he suffers from a ‘leaky bucket’ with too many customers slipping through the holes in the bottom of the bucket.

Want more articles like this? Check out the  customer service section.

Much of this is due to poor customer service. And he doesn’t even know it!

The research shows a typical business does not hear from 96 per cent of unhappy customers. For every complaint there are 26 others with the same problem and the average person with a problem tells 9 or 10 others. 13 per cent will tell more than 20 people.

So that is the cold hard reality of not having good customer service skills.

But it is not all bad. If complaints are resolved those people tell 5 people and it is usually a positive message.

For example, complainers are more likely to do business with that soloist again compared to non-complainers, and this rate goes to 95 per cent customer retention if the complaint is dealt with quickly.

Everyone makes mistakes, the key is to learn from those mistakes and act on them quickly and you will have even more loyal customers.

Keeping your customers happy will help fill the holes in your leaky bucket and lead to a more profitable and successful business.

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  • Andrew Caska

    Caska IP Patent Attorneys

    'Flying Solo opened up so many doors for us - I honestly don't know where I'd be without it"