Previously we talked about the amazing effect referrals can have on your business. This ‘positive word of mouth advertising’ is a truly awesome way of increasing your sales and profits – agreed?
So what happens if the opposite occurs?
Instead of getting ‘good word of mouth’ you get ‘bad word of mouth’ (online reviews have taken this to an unprecedented level!).
What effect can this have on your business?
I think you’re going to be shocked…
One lost and unsatisfied client or customer has far reaching implications.
You don’t just lose their business – you lose the business of many other potential clients or customers.
Let me explain this using a simple example…
Let’s say you shop at your preferred supermarket each week. And let’s say you spend £/$/€150 a week on grocery shopping. That’s £/$/€600 every month. And a massive £/$/€7,200 a year. Over a ten year period you’ll spend over £/$/€70,000.
But let’s say for several weeks the supermarket doesn’t put enough people on the check-out and they are out of stock with regular items on your grocery list. You put up with it to begin with because you’re a loyal customer, but week-after-week this keeps happening so you decide to leave and go to another store.
So, what was the cost to the supermarket that had your business and then lost it?
Well on first inspection you’d say straight away they lost your custom which amounted to £/$/€600 a month.
But here’s where is gets even more frightening…
You’d probably tell this story to every one of your friends.
As a result a few of them have also stopped using the supermarket out of principle. Heaven knows how many friends they’ve also told.
In effect, you have a mushrooming situation where more and more people get told about the ‘story of why you left the supermarket.’ It amounts to a huge tide of bad publicity. And it’s exactly the same when you lose a client or customer.
So let’s take a closer look at how this bad word of mouth could impact on your business.
If one unhappy customer were to tell 10 other people about that experience (or not refer those 10 people to your business), and each of those 10 were to tell six others, the total number of people affected by your one bad experience would total 71. (6 x 10 = 60 + 10 = 70 + the original unhappy customer = 71).
Now, if only 25 percent of those people chose not to do business with you, that comes to 18 people.
If each of those 18 had similar buying habits as your original customer, your total lost revenues would be £/$/€27,000 (£/$/€1,500 x 18 people)!
£/$/€27,000… all from one bad experience!
But what if those figures are way off, and it’s only 20% of that amount? That still totals £/$/€5,400.
That’s a lot of money for letting one person leave your business unhappy. And here’s an unfortunate thing:
Sometimes people are unhappy, and leave, and you don’t even know it.
They just get their feelings hurt, feel slighted, or have something completely unexplained happen, and take their business somewhere else. And you never know.
Here’s how the above situation looks…
As you can see, losing customers really does impact your sales and profits – and ultimately the value of your business.
So what do you do about it?
Well, you can’t afford to do anything but treat each of your clients, customers or patients in the very best way possible.
Give them all the love, care, attention and service you can.
Make it nearly impossible for them to even consider doing business with anyone else but you, regardless of price, location, convenience, or any other reason.
Become not only the preferred place to do business with, but the only consideration your customers, clients or patients and prospects have.
In fact, if you address all the mistakes in this training, you’ll be well on your way to doing that!
Thanks for reading.
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