When clients are making requests of you, it serves your best business interest to think long term. 5% of your current customers are leaving because their friends and colleagues are telling them about the great service your competitors are providing. 9% of your customers are being lured away by your direct competitors discounts, coupons, or initial freebies.
On the occasions customers make a request that may cost you a small amount of money in the short term, what will it actually bring into your longtime business revenue? For example, many gyms and health clubs provide child care. Some clubs charge for this service while others do not. For those that do have to pay even $5 for the child care, this adds up quite quickly for those that use it 3 to 5 times per week. This may amount to even double the monthly dues in child care costs alone. Many members may take their dollars to a club that provides it at no cost. Granted, that competitor may charge a bit more than your club to provide that service, but it serves the customer well.
Another example is customer loyalty practices. Many health club and gym goers put their memberships on “hold” during the summer months. There are many gyms that will not suspend the membership for a three month period. They require the member to cancel the membership, then rejoin and pay the initiation fee again. This has cost members up to $400 for another initiation fee. Most members faced with this leave for a competing gym that will hold the account until reactivated. Granted, there does need to be a reasonable amount of time that the account may be reactivated before becoming inactivated, generally six months is a good time frame. The point is that for whatever reason, accounts sometimes need to be suspended at the clients request. When this option is provided, the customer feels a higher satisfaction level when they are allowed some control and flexibility in the use of services and fees.
When you lose customers for reasons such as these, it costs far more than you may realize. Not only have you lost that customer’s business in the short term, but chances are that they will not return to you. If a health club membership costs roughly $75 for a family per month, plus incidentals of $25 per month, that is $100 per month revenue lost. While that will not cause you much damage in the short term, think of it like this -annually, that is roughly $5000. If you have successfully valued and retained that customer for 20 years, that is a loss of $100,000 in revenue.
Remember that 5% of customers lost because friends and colleagues are convincing them to their preferred vendor? Chances are that your health club members are forming friendships. If one leaves, they are most likely letting their friends know of the better services that your competitors are now providing them. You could also be luring 9% of your competitors customers to your club by promoting a service that they are short sighted in not offering.
Satisfied customers value service. They are even willing to pay a bit more for services that are important to them. Show your customers that you value them and provide the services that they want. Increase your customer satisfaction and retention levels by considering the needs of your customers. They’ll thank you by referring their friends and colleagues to you. The end result is your main reason for being in business in the first place – an increase in your bottom line.