Customer Focus in a Slow Economy

So here we are again. The economy is improving in some sectors but still pretty tough for others and for many, life is stressful and difficult. For business, this is not new. We’ve all been here before. Hopefully we’ve learned from the last time the economy slowed … But then again, have we?

No business owner wants to lose customers but when times get tough many ï»¿ï»¿subconsciously take actions which put their customer base at risk Their focus shifts to cost control and the acquisition of new customers. History has taught us that every time this happens, relationships with existing customers can be put at risk. There is no doubt that being financially responsible is important, as is acquiring new business, but not if it is at the expense of your existing customers.

Permit me to elaborate .

 During a recession  ï»¿ most customers look for ways to increase the  value for their money. They  need  to make their hard earned cash go further and you can be sure that they will be more critical about where they spend their money .

With less disposable income, customers will be less forgiving of a mediocre or poor service experience. And don’t forget that when it comes to service , the vast majority , 90 to 96%, will not complain and most will simply go elsewhere. These  days, customers want to deal with organizations that demonstrate that they want and appreciate their business.

You can also be guaranteed that your customers are strongly influenced by the stories of good and bad service which they hear from their friends, acquaintances, family and colleagues when it comes to ï»¿ï»¿recommendations for products or services and providers.

As I mentioned earlier, when economic conditions become more demanding , far too many organizations focus on cost cutting and acquiring new customers . This will usually put existing customer relationships at risk  .

Quite often training budgets are the first to get cut. This includes all important training on things like Customer Service and Leadership.

Process improvement plans get put on hold ï»¿ often including process improvements that were intended to enhance the customer experience.

Even though it is five times more expensive to get new customers than it is to keep existing already profitable customers, many organizations bolster their marketing efforts trying to pull more customers in the front door, at the same time virtually ignoring their existing customers who simply walk out the backdoor looking for someone who wants and appreciates their business and proves it through their actions. 

Customer retention is all the more important during difficult economic conditions. Research proves that existing customers are more profitable and improvements in your operating expenses and resulting bottom line can be achieved through maintaining a high level of customer focus. Just to remind you, don’t forget a five percent increase in customer loyalty can contribute from 25% to 125% directly to your bottom line.

Remember that your customers always have the choice of buying from you or your competition. When times are tough, that choice becomes even more important.

Implementing a customer focus strategy will create valuable and long-lasting relationships with your customers that will provide a secure and growing revenue stream.

Focusing on getting the customer experience right is critical. ï»¿ It is equally important that you take steps which ensure that your customers choose you over your competition ï»¿ If you do this when times are tough you will certainly reap ï»¿ the benefits and rewards of unleashing the power of customer focus as conditions improve.

So this time, why not dare to be different. Why not unleash the potential of customer focus, while everyone else has their eye off the ball.

Ray Miller is the Author of That’s Customer Focus! and The Customer Focus Companion and Managing Partner of The Training Bank

Originally posted 2011-08-09 06:59:23.