“GREAT CUSTOMER SERVICE IS WHAT SHOPPERS EXPECT. AWESOME CUSTOMER SERVICE IS WHAT THEY REMEMBER” – Leon Skaliotis
When a customer spends $50 in your store is their purchase worth $50 to your business? The answer is that it depends. Below are five points you must consider.
1. If Gross Sales = $50, If Gross Margin = 50%, Gross Profit = $25
Next, you need to subtract your fixed and variable costs. The end result is that your initial $50 sale may only be worth $20 in net profit! More on retail maths in future editions.
2. If the same customer is delighted with your awesome customer service and their purchase and they return three times over the next year and make a similar purchase:
If net profit = $20, Sales = 3, Net Profit = $60
3. If the same customer is “blown away” by your awesome customer service and they rave about your business to just two of their friends who also make similar purchases:
If net profit = $20, Sales = 9, Net Profit = $180
4. Let’s take this scenario one step further and assume that because of your consistently awesome customer service, your two referred customers each also refers two more friends who go on and make similar purchases:
If net profit = $20, Sales = 15, Net Profit = $300
5. What is the cost to your business if for any reason your original customer is merely satisfied but never returns?
What is the cost to your business if for any reason at all your original customer is dissatisfied and tells their friends about their bad experience?
A dissatisfied customer will tell 9-15 people about it. And approximately 13% of your dissatisfied customers will tell more than 20 people about their problem. Source: the White House Office of Consumer Affairs, Washington, DC.