You guys are really causing havoc!
WOW, what a way to start a conversation. This is an excellent story from one of my clients about an encounter with one of their clients.
To protect the identities of those involved, I will use fictitious names for everyone involved in telling this story. So my client sells widgets and outsources the assembly to a third party after designing them. The difficulty they have encountered this year is in getting the products delivered from the company they use to assemble them. This is an extremely unusual occurrence for my client.
Because of the delivery issue, they have had to change the actual products their clients ordered to something similar but different than what they were expecting. The client was furious after doing this for the fourth time. Prior to this year’s assembly issue, my client had very rarely encountered these types of delivery issues. In fact, their delivery has always been a strength in an industry plagued by delivery and supply issues.
That is an example of a problem that you and your company may face in the future. Perhaps you have a product backlog, and the delivery you expected to complete at the beginning of the month has been pushed back three weeks. Maybe you overpriced something and are now going to lose money on the deal as a result.
Whatever problem or issue you and your company have caused or are experiencing, you must resolve it. You don’t have to fix it, but you might have some unhappy customers.
So let’s pretend you want to solve this problem. I read somewhere that a problem is simply an opportunity for you to shine. That is my understanding of why problems arise, and it is part of what makes me an opportunist when it comes to problems. Because I now have the opportunity to distinguish myself and shine for my client. Make lemonade when life gives you lemons.
So I was recording my thoughts and basically brainstorming out loud to myself while driving yesterday. How do you turn a major blunder, such as switching a client’s order four times in a couple of months, into lemonade?
Every year, my client runs an early order program to help lock in pricing and get a better idea of how much inventory will be needed for the following year. Clients who place an early order receive a larger discount for their commitment. What if you went to those clients and really fell on your sword, telling them how much of a jerk you were? What if you told them you feel terrible and that your company has never had problems like this before? What do you think their reaction would be?
The vast majority of your customers (95%) would accept your apologies. There will always be a few who refuse to accept it, but you can’t worry about what you can’t control. The point is that the majority of your customers will accept your apology.
How can you improve the apology process?
This is where you can immediately begin marketing to your existing clients about how you’re going to correct this error. To really figure out a great way to reward your clients’ loyalty and patience, you’ll need to get your creative juices flowing. For the sake of simplicity, consider a flat discount on the regular price. Here’s an example. If your normal selling price is $100, create a coupon that gets them the product for $75 off their next order. Make the discount even bigger if you really want to make a big impression on your client’s mind and loyalty.
I understand what you’re thinking. You’re giving away all of your profits! It is ultimately up to you to decide how much you want to discount. My advice to you is to put yourself in the shoes of your client and ask yourself what you would want someone to do for you to make things right in your mind. Inquire with your client about what would make it appropriate for them.
Another thing to consider is how much it currently costs you to acquire a new client. On average, it costs five to six times more to acquire a client than it does to keep a client. I have no idea where these figures came from, but consider what you pay for salespeople, marketing, and so on. You’ve spent a lot of money to get new business, so keep what you’ve got. I promise you it will be a simpler process. I don’t want to get sidetracked by the discounting, but make sure you’re truly building loyalty with your client and exceeding their expectations.
When purchasing something, you can have three types of experiences.
1. falls short of expectations
2. fulfills expectations
3. Outperforms expectations (This is an added benefit of client relationships.)
Simply consider how you would feel if this problem had occurred to you. Then consider what you would like someone to do to exceed your expectations.
Let’s wrap this up with some action plans to put what we’ve discussed here into action. Take a proactive approach to this situation. That means you’ll be the one to start the apology, the conversation about how to make it right, and the method you’ll use to make it right.
By being proactive, you activate one of the most important influences in decision-making: credibility. Credibility implies that you are genuine. Being authentic means admitting you made a mistake and taking steps to exceed expectations and make things right.
People who lack credibility blame others, avoid responsibility and usually conceal problems until they are forced to confront them.
Your actions should include elements such as mailing something to your clients, calling them, visiting them, and so on. In this situation, you should communicate excessively. Continue to market to those people to remind them of how and when you will exceed their expectations.
If you have people working for you who handle these details, this is also where you reach out to your clients and do everything I’ve mentioned. So many business owners hide behind their employees and let others handle all of their problems. By being a part of this proactive solution to make things right for your clients, you can easily differentiate yourself and create loyalty unlike any you have ever seen.
As a bonus for exceeding your client’s expectations, you can feel good about asking them if they know anyone with who you could assist. Yes, that is a reference.
Now go forth and conquer, and act today.
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