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New York-based writer, editor and PR Media Blog reader, Bridgett Gayle, picked up on some of the sentiments expressed in our customer service blog post, http://pr-media-blog.co.uk/customer-shmustomer/. This is her response:

Most salespeople are familiar with the 80-20 rule. Eighty percent of sales come from merely 20% of the loyal customer base. But so many companies are either unfamiliar with the rule or have abandoned it, evidenced by their weak customer retention program that devalues customer loyalty.

A Knowledge@Wharton marketing survey found that profitable companies are “relationship leaders” and make customer retention a priority. Loyal customers rave about great companies. Without that customer word-of mouth approval your company is skating on thin ice. One dissatisfied customer tells 8 to 10 people about their miserable customer experience. With the Web, one can tell thousands.

A weak customer retention program allows for two things (I bet there are more than two but I speak here from experience):  

1)     Not providing some reimbursement when customers are inconvenienced.

2)     Favoring new customers and ignoring the old. 

I’ve been a loyal customer of Verizon for almost a decade. One day I started to receive frantic calls from friends and associates saying that there was something wrong with my phone. All they heard were buzzing noises. Seeing as they were finally able to contact me, I assumed the problem was fixed. I was wrong. For two weeks I had spotty phone service. Verizon told me there wasn’t a problem. Verizon was wrong. Not only was there indeed a problem with my line but my entire neighborhood needed rewiring.

I called Verizon expecting some kind of reimbursement for the inconvenience. I was told they have no such policy for this kind of situation. I hung up feeling unvalued.

Time Warner Cable, like many companies, is hell-bent on getting new customers. They devise all these lures to attract prospects. But when they have you, they ignore you. I watched my cable bill more than double in about six years. I discovered that new customers were paying a lower rate than I was. How is that fair? As a reward for being a loyal customer, I pay more? Where are the lures to keep me loyal?

According to the Harvard Business Review, an existing customer spends an average of 67% more than new customers. And many companies lose 50% of their customers every five years. Becoming a relationship leader is much like running a good restaurant. The wait staff makes sure glasses don’t go empty (good customer service), checks level of satisfaction throughout the meal (customer valuing), and corrects dissatisfaction by bringing a new meal or offering a discount (customer satisfaction). The end result is customer retention.

CRM expert Jim Berkowitz provides six questions companies should ask themselves in order to become relationship leaders. I wonder if Verizon and Time Warner have asked these questions. 

Bridgett Gayle is an American-based writer and editor.