Gain customer loyalty by design, not by accident

BY BOB MIODONSKI Of CONTRACTORs staff LAS VEGAS If youre a contractor, you really dont want satisfied or even happy customers, said Dennis Sowards, quality manager for Kinetics Construction in Tempe, Ariz. Loyal customers should be your goal. Loyal customers get excited and will recommend others to you, Sowards said June 6 during his workshop, Gaining Customer Loyalty by Design, at the 2002 Mid-Year

BY BOB MIODONSKI

Of CONTRACTOR’s staff

LAS VEGAS — If you’re a contractor, you really don’t want satisfied or even happy customers, said Dennis Sowards, quality manager for Kinetics Construction in Tempe, Ariz. Loyal customers should be your goal.

“Loyal customers get excited and will recommend others to you,” Sowards said June 6 during his workshop, “Gaining Customer Loyalty by Design,” at the 2002 Mid-Year Education Conference of the Mechanical Contractors Association of America.

By recommending your services to others, loyal customers reduce your marketing expenses, he said. Also, finding a new customer costs up to five times as much as getting repeat business from a loyal customer, so you save money there too, Sowards noted.

Among loyal customers’ other qualities, they are more likely to buy more from you and they are less likely to be price sensitive.

One of the harsh new realities of doing business in the 21st century is that all customers automatically expect the highest level of service and value, Sowards said. So merely satisfying them isn’t enough anymore.

Sowards differentiated loyal customers from happy ones by noting that a customer’s happiness with you actually may be based on a relationship or friendship with one of your employees.

“Happy customers are hard to read,” he said. “They may leave if the person leaves your company.”

Gaining loyalty from customers doesn’t happen by accident. The No. 1 way to get loyal customers is to do the job right the first time, Sowards said. Performance is the key. In order to perform, you must define the customer’s requirements as well as the levels of service you will attain.

“You must be consistent so they can trust your promises,” Sowards said. “To be consistent you must have your systems and processes defined.”

The consistency must cover every aspect of a job from negotiating contracts to billing. Perhaps one of the most important systems is one that defines how employees take corrective actions if customers have complaints. Such a system involves training employees so that they acknowledge errors and apologize; keeping track of complaints and reviewing logs regularly; and having standards for service and response time to resolve complaints quickly.

“If you recover fast and well from a mistake, it can increase loyalty from a customer,” Sowards said. “When you make a mistake, the customer wants it fixed.”

Another vital process is measuring loyalty by soliciting feedback from customers. The four biggest myths about customer feedback are:

-Silence is golden;

-Complaints are the enemy;

-“Fine” means all is well; and

-Responses are not necessary.

“‘Silence is golden’ is a lie as it relates to customers,” Sowards said. “They’re still talking, but not to you. Maybe to the competitors?

“As for complaints being the enemy, at least they’re talking to you.”

Customer surveys should be short, simple and to the point. They should avoid too many open-ended questions that ask for comments, which sometimes can be difficult to generalize. Surveys also should stay away from “two-in-one” questions that ask customers, for example, to rate your quality and safety.

In meeting face to face with customers, you shouldn’t talk just about a specific job or contracting issues, Sowards said. Instead, discuss the customer’s business and what the business’s needs are.

Besides customers, of course, the other group of people who are crucial to creating customer loyalty are your employees, Sowards said. They need to be informed to know what’s happening and empowered to act as you would in dealing with a customer.

“Everyone is responsible for customer loyalty,” Sowards said. “But management leads.”