- 1 Book Summary - Never Lose a Customer Again by Joey Coleman
- 1.1 Key Insights
- 1.2 Key Points
- 1.2.1 You can learn a lot about excellent customer service from an emergency trip to the dentist.
- 1.2.2 Most businesses spend lots of money on acquiring new customers just to lose them.
- 1.2.3 Customer acquisition and customer retention typically do not receive the same attention or budget.
- 1.2.4 Many companies struggle to understand the customer experience.
- 1.2.5 There are three phases to the customer experience journey.
- 1.2.6 To please customers, you can follow four steps: Investigate, Observe, Personalize, and Surprise.
- 1.2.7 With the right tools, you can turn customers into advocates for your company.
- 1.3 The Main Take-Away
- 1.4 About the Author
Book Summary - Never Lose a Customer Again by Joey Coleman
Speaker and business consultant Joey Coleman talks about an under-appreciated and deeply important aspect of business success: customer retention. Rather than focusing on the allure of attracting new clients, Coleman thinks about customer service and the value of loyalty to reflect best business practices for long-term success. Coleman compares customer retention to wooing a romantic partner and uses some unconventional metaphors (like the dentist’s office) to help businesses consider new ways to approach customer retention.
You can learn a lot about excellent customer service from an emergency trip to the dentist.
We don’t think about the dentist as the ideal place for customer service, but for Coleman, this was exactly the place where he began reflecting on customer loyalty. After biting down on hard candy and experiencing sharp pain in his jaw, Coleman made an emergency appointment with a new dentist’s office. He didn’t have high hopes for his experience, but by the end of his medical journey, the receptionist had made him feel like a valued part of the office’s community. He was a customer for life.
So what did the office do that made them stand out? The receptionist recognized the urgency of Coleman’s visit and rearranged the dentist’s schedule to ensure he could be seen sooner rather than later. Having his problem acknowledged and taken seriously made him feel valuable. The receptionist also went the extra mile and made completing introductory paperwork easy, to avoid time spent in a waiting room, writhing in pain. After his trip, the receptionist called back to check on Coleman, and offer him continued support after his painkillers wore off.
The receptionist didn’t just care about Coleman in order to get his business; she wanted him to have a good experience. From this surprising trip to the dentist, Coleman realized that building a loyal customer base is all about ensuring that each client feels valued.
Most businesses spend lots of money on acquiring new customers just to lose them.
Businesses typically spend the majority of their marketing budget acquiring customers, not focusing on keeping them. And yet, research shows that businesses lose between 20 and 70 percent of customers three months after acquiring them. This is true across industries and in companies of all sizes. Customer retention is a universal problem.
Banks, for example, spend up to $300 per customer to find new recruits. They operate under the assumption that once a person opens a bank account, they’ll keep it. But that’s not actually the case - up to ⅓ of those people will leave within a year of opening their new account.
This happens because customers don’t feel valued after a sale. Sometimes this is the result of fine print in a contract that surprises and upsets them, and other times it's a lack of customer support. To return to the bank example, a customer might sign up and be hopeful, but soon find that hidden fees in their contract or poor customer service at the branch makes the bank a less than appealing choice.
Customer acquisition and customer retention typically do not receive the same attention or budget.
According to Coleman, customer retention is like a relationship. You would never woo someone, send them gifts and shower them with praise, and then on the wedding day pass them off to a stranger. But so often in business, this is the case.
Businesses tend to spend lots of money on customer acquisition. Customers become attached to their sales representatives and then are passed off after the sale to a customer representative who often doesn’t know the details of the account or the history of that relationship. On top of that problem, customer representatives rarely receive the same praise for a job well done that sales associates do -- this incentivizes acquisition over retention.
Coleman shares some surprising numbers to incentivize customer retention. He says that a customer’s lifetime values (CLV) is about ten times the value of an initial sale. So while getting new clients is great, keeping them is even more important. And in order to keep them, you need to act within the first 100 days.
Many companies struggle to understand the customer experience.
When you ask them, most companies will say they have great customer service. But few of them can define customer experience - or explain how they manage it.
Unlike customer service, which is reactive, customer experience is proactive. Customer service is all about how you act when approached, while customer experience is about proactively cultivating an environment for your clients before they even show up. In customer experience, the customer is the focus - their perceptions and emotions while interacting with your product are the key.
While 80% of companies surveyed said their customer experience was superior, only 8% agree that other companies provide superior customer service. These numbers don’t match up. Thankfully, there is an easy, phased approach to understand and improve the customer experience.
In terms of numbers, remember that customer retention means higher profits. If you keep just 5% of the customers that might leave after their initial sale, you can increase your profits by 25-100%.
There are three phases to the customer experience journey.
Typically, a customer experiences three phases during their buying journey: assess, admit, and affirm. But stepping in at vital times during this journey, you can guarantee excellent customer experience.
The first phase, Assess, is when a customer is scoping out your product. They may have a problem in mind, and they are exploring service options. During this phase, you might personalize your communication with customers so they know you are attentive and listening. For example, if you meet a potential client and talk about golf, you might send them a golf ball from a famous club to show you were listening to them.
In the second phase, Admit, a customer admits they have a problem and need a solution. This is an exciting step because they have made the decision to buy. During this phase, celebrating that choice is vital. A customer has chosen you, so make sure their positive feelings last! You might send a warm welcome basket or announce their name at a meeting or event.
Finally, the Affirm phase. In this phase, the buyer’s remorse can set in. This phase is named for the action you should take to retain your customer - affirm that they made the right choice. Don’t leave them doubting your product or company. Follow up with calls, offer support, and show the buyer you haven’t forgotten them just because the deal is done.
To please customers, you can follow four steps: Investigate, Observe, Personalize, and Surprise.
You might wonder how to make customers feel valued - especially in that 100-day sweet spot when customer retention is a priority.
To improve customer experience, you can follow four easy steps: investigate, observe, personalize, and surprise.
Begin by investigating a client’s interest. Use the “I tell, you tell” format to get information without seeming to pry - when you share your favorite baseball team, ask for theirs too. Make sure you share notes from this in your CRM, so that you and other employees can access it as needed.
Next, observe. This step is all about empathy. What is it like to walk in your client’s shoes? Wait for them to share their values and experience, and make detailed notes about their needs and desires.
The third step is vital: personalize. In order to feel valued, your customers need to feel like their special, and like you know them intimately. Send personalized gifts based on your knowledge of the client, and make sure those gifts benefit not only the client but also the client’s family or team.
Finally, surprise. Avoid surprising your clients with gifts or mementos when they expect it, like a birthday or holiday. It won’t have the same impact. Instead, find a time when the gift will be unexpected, and thus more memorable. Include a handwritten note to personalize, and memorialize the experience with a photo.
With the right tools, you can turn customers into advocates for your company.
Word-of-mouth advertising is priceless. Turning current and former clients into advocates for your business can make you even more money than the sale itself if you find ways to incentivize referrals and support your customers after the buying process.
To turn your customers into advocates, make sure you have great customer support after the deal is made. This will guarantee they keep their positive view of your business. After they’ve had some experience with the product, incentivize them to give referrals with bonuses that match the caliber of your product. For example, if you sell a subscription service, tell current clients that they can receive a 25% discount on their next month by referring a friend.
Remember that with or without incentive, if you make customers feel important, they will advocate for you. People love making recommendations, and having great customer experience will guarantee your clients keep coming back, and bring their friends.
The Main Take-Away
Never Lose a Customer Again focuses on customer retention and the reasons why businesses often lose such a high percentage of their customers after acquisition. Coleman shares anecdotes about his own experience as a customer to educate readers on customer experience and why loyal customers matter. He talks about the three phases of the customer experience journey and shares the key tips to transform customers into life-long advocates for your business.
About the Author
Joey Coleman is a world-renowned speaker and business consultant with a focus on customer retention. He provides workshops and seminars for Fortune 500 companies. Never Lose a Customer Again is his first book.