How to Lose a Customer in 30 Days
I recently had a horrible customer service experience with HMS National, but rather than complain about it on Facebook and send angry tweets, I decided to reflect on the experience and break down what happened. It was a great lesson on how businesses, both big and small can better retain customers. My experience from the day I submitted the claim to service completion took 39 days, but 30 days makes for a better title!
Retaining current customers is more profitable than acquiring new customers. Why? Because it costs less to nurture existing customers who currently purchase from you than it costs to convince new customers to take the risk and try something new. A survey by Invesp found that acquiring a new customer is five times as expensive as retaining an existing customer. And, according to research done by Frederick Reichheld of Bain & Company, increasing customer retention rates by 5% increases profits by 25% to 95%.
Think about your habits. How often do you try a new product or service just because? Chances are a family member or friend raved about it, or you tried a delicious sample at Costco (they get so many people with those aromatic samples!), or you were completely frustrated with your current product or service and wanted something better, or you spent a good 2.5 hours reading reviews on Google, Yelp, Amazon, and Facebook before even considering buying. You are more likely to go with what you know and trust.
In my experience with HMS National, they made three mistakes that businesses should avoid if they want to retain customers. You should do the exact opposite of everything they did:
Nurture people on your existing email lists.
I was supposed to receive an email explaining the costs associated with my claim and a phone call, so I could verbally accept the costs. I didn’t receive either. During one of many phone conversations with customer service, a supervisor told me a “technical glitch” wasn’t their fault. Sis, come on. Email lists are one of the best ways to communicate with customers and clients, so this means you should establish an email marketing strategy. You should also check and double-check your email marketing campaigns to ensure that your subscribers are receiving information. Check to make sure the scheduled email actually sent. Check for bounce backs from invalid email addresses, so you can delete and keep your email list up-to-date. There are tons of email service providers to choose from; do some research and find the best one for you.
Maintain open lines of communication.
Listen. The number of steps it took to reach a human each time I called HMS National was almost laughable. It was like listening to instructions on how to do the Cha-Cha Slide. There were several times when I had to tell the automated woman, “That’s not what I need. Human, please.” But, she just didn’t understand. Make it easy for your customers to get an answer because with too many steps, by the time they eventually reach a human, they’re likely to be frustrated or annoyed. Even as a small business, you can use Google Voice, a live chat app for your website, or even chatbots on Facebook Messenger to make it easier for your customers to get an answer.
Don’t lie. Admit your fault, apologize, and offer a solution.
I spent two days talking to different customer service representatives at HMS National and I heard many lies, but no acceptable solutions. It wasn’t until the third day that a very helpful person called me and did everything right. She stated the problem, immediately apologized, and offered a solution. She also didn't lie. The conversation took five minutes. If I had received that level of customer empathy from the beginning, HMS National would still have my business, but in the words of a wise young woman named JoJo, “It’s just a little too late.”
That’s it! Simple things you can do to keep your customers happy.