Dan owns a one-man insurance sales business and he’s doing pretty well. He brings in about $700k/year and takes home a respectable amount of money. That went on for a few years but he realized one day that he needed to grow the business and make it more profitable so he could provide a better life for his family. He started to worry about when his kids got old enough to go to school, and about retirement for him and his wife.

And then, one of his oldest customers left. And that customer wasn’t alone. Dan started to notice a trend of long-time customers not renewing with him and he began to get scared.Of course it’s much harder and more expensive to get new clients than it is to keep old ones. So he spent a lot of time researching his own business and looking at the rates and discounts he provided, looking at the contract terms, and even rewriting his templates follow-up thank you emails. But he couldn’t figure out how to keep customers happy enough to stay, and revenues began to drop.

He met up with his friend, Melissa, who owns a website design business, and they talked about the problem. The web design business was booming. They had intensely loyal customers who frequently referred other business to them. Melissa was even in a position to turn away new business if it didn’t exactly fit the profile of their ideal customer.

Of course Dan wanted to know Melissa’s secret. But before she told him, she had several questions for him.

Melissa: How often do you talk to each of your customers?
Dan: I usually talk to them when they reach out to me.

Melissa: If a customer emails you, how long does it take to reply to them?
Dan: Within a business day.

Melissa: Why have your oldest customers stayed with you so far?
Dan: I guess they like working with us.

Melissa: If you screw up, what do you do?
Dan: Well I apologize of course, and make sure the problem gets fixed..

Melissa: How often do you surprise your customers with savings or deals or even gifts?
Dan: I use those as incentives to get new customers.

Melissa said, “Well Dan, I think I see the problem. You obviously care about your customers and want them to be happy. But I don’t think you’re making them happy enough.”

Dan looked at her in disbelief. “I work really hard for them!”

Melissa explained, “I’m sure you do. But so will all your competitors. The most important things are communication, kindness, and trust. There’s a lot of ways to do those and the questions I asked just outline a few examples.

But a good point is calling your customers. If you only talk to them when they reach out to you, how do they know you’re thinking about them and their concerns? You should have a regular schedule to contact all of your best customers – even if it’s just to say hi and see how they’re doing. People like to know they’re cared for.

And when they email or call you – make it a point to respond within the hour – even if it’s just to say that you got their message and to give a date and time by which you’ll get back to them. That builds trust – just make sure you reply when you said you would!

And if you can’t say exactly why your customers are with you over time, you have not listened well, or you have not even bothered to ask them. Ask them! They’ll tell you all kinds of interesting things and you might even get an early warning that there’s a problem.

When you make a mistake, you should not only fix it, but you should fix it unexpectedly quickly and beyond expectations. That kind of response can cement a relationship because they know they can truly depend on you.

Last, do make gestures like discounts, or send flowers, or cognac. Surprise them on a random holiday – the day they signed their first contract with you, or on their kid’s birthday. Develop real, personal relationships. They’ll like you more, and you’ll like your work more because you’ll be doing it with friends.”

Dan grinned in relief. “Thank you so much! I’ve already got a plan in mind: weekly or monthly check-in calls, respond in one hour policy, quarterly customer satisfaction surveys, immediate and over-the-top response to a problem, and unexpected surprises, gifts, and discounts.”

Dan went back to work and implemented those things, and a few other ideas he had along the way. Within 3 months, the drain on his customer had stopped, and customers started spontaneously referring new business his way. After a year he had to hire people to help him manage his rapidly growing business.

The take away from this story is that customer service can be a huge differentiator. People will accept inferior products (to a point) if the service is stellar. And when people truly like, care about, and trust you, they will want to see you succeed and will help you do so.

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