Article > Operations

Here's How To Lose That Customer

By Mark Phillips

Repeat customers are the lifeblood of any parts operation.
Mark Phillips
Last month’s “Keeping It Simple” column by Gerald Wheelus investigated the lifetime value of a customer and how to calculate it. In his column, Gerald reviewed how the length of time a customer has been in business, their business life expectancy and their total monthly spend all figure into an equation that will tell you the customer’s lifetime value. It’s important stuff to know because, after all, repeat customers are the lifeblood of any parts operation.

It made me immediately think of a CNBC special about two years ago that investigated the phenomenon of Walmart, how the company does what it does and how they make so much money. The special brought out a very interesting figure: They’ve calculated that if a customer becomes disgruntled and leaves the checkout line, it’s a bigger loss than just the products sitting in the shopping cart. In fact, it’s a loss of about $200,000. How can than be, you ask?

If the customer gets ticked off, never to return, $200,000 is the approximate amount of money the average Walmart customer spends over their lifetime, according to the CNBC special. Now, clearly, with as big as Walmart is and based on how many of its stores dot the landscape, it’s unlikely someone will leave Walmart never to return to a Walmart — ever. But what happens if they visit the store a lot less than before? What if they go to Target instead?

Michael Bergdahl, an author and business consultant who worked for Sam Walton, the founder of Walmart, has
written two books — “What I Learned from Sam Walton:  How to Compete and Thrive in a Walmart World,” and “The 10 Rules of Sam Walton: Success Secrets for Remarkable Results.” Bergdahl knows a thing or two about customer service.
He penned a piece called “Lose Customers — 10 Proven Ways,” which contains what should be common sense to anyone working the counter. Here are his 10 points:

1) Breaking a promise. When you make one, keep it. It’s that simple. It pays
big-time dividends.

2) Shuffling the problem around. Some businesses subscribe to the idea that an employee “owns” a problem until it is solved. That’s a great way to do business. When a customer’s problem gets shuffled around, they think the company doesn’t care about their business.

3) Poor service attitude. Have a procedure in place to help upset customers. Actually monitor phone calls for quality control.

4) Making customers angry. Train your employees on how to deal with irate customers. Have employees participate in role-playing. Have a written customer service procedure in place.

5) Lack of follow-up. Make a commitment to get back to a customer within a certain amount of time and do it.

6) Alienating customers. Treat the customer right and you’ll be able to count on them for future business.

7) Reaching an impasse. You can’t please everyone all the time. Have a procedure in place to solve an impasse. If it’s a company policy the customer disagrees with, explain why the policy is the way it is.

8) Apathy toward customers. The customer pays your salary. They can walk with their dollars any time they want. Always remember this. Is there a compelling reason your customer should continue to do business with you?

9) Non-competitive practices. Everyone has Internet access and can search your competition’s prices and practices. Get very familiar with your competition.

10) Mishandled product issues. Not enough time is spent training employees on service after the sale. If your customer returns a part and the company’s policy puts them on the defensive, you could lose future sales.

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