Archive | January 2019
What is the Value of a Customer?
How Much is the Value of one Customer to You and Your Business?
The Sunday before Christmas, my wife, Michelle and I went for brunch after church service. We were indecisive about where to go. We ended up at a place that previously had been one of our favorites, not only for brunch but for dinner and happy hours. We started going to this restaurant shortly after it opened which was just about the same time we arrived in Las Vegas-6 years ago.
This restaurant had a warm, inviting and comfortable ambience. The food is ‘farm to table’ and always delicious and not boring. The staff and management were friendly, approachable and typically delivered good, if not great service.
Over the course of a few years, we had dined there, just the two of us, brought family when visiting from out of town, had dinner and met friends for drinks, and even had one major event (my first book launch) there. We became friends with both staff and management. How many times did we dine there over the first few years this restaurant was open? Hard to say. But I know it was a lot. How many people did we refer to this place? Too many to begin to count. People know that Michelle and I dine out often and friends are always asking us for our recommendations of great restaurants. So, what is the point of all of this? Well, when we went for brunch that Sunday before Christmas, it actually was the first time that we had been back to this restaurant in 2 years.
What happened? As always happens in restaurants, people move on. It is inevitable. The managers and staff that we had come to know so well, left one by one. As the familiar ones left, we felt more and more like strangers when we would come in to dine because although we’d been coming for years, the new staff and management didn’t know us. And it seemed they didn’t make an effort to know us. We no longer felt the same welcome. The energy and culture of the place seemed to not be the same as before. This is not something that is easily identifiable. But when a customer ‘feels’ that it’s not the same, it has a powerful affect upon them.
We came back a couple more times but it was just different. Then, one day we came in for brunch and a staff member who had previously been a server now had been promoted to manager. There were a few problems with our order. We brought it to the manager’s attention and this person’s response was rude, disrespectful, and uncaring. This person was not interested in fixing the problem or making us, the customer- feel good about our experience. The manager was actually argumentative with us. That was it. It really was an awful experience. We left knowing that we may never be back again. As I said, that was 2 years ago.
Imagine how many times over the course of that time we chose to dine elsewhere. Imagine how many times when someone at the hospital where my wife works asked her for a restaurant recommendation that she DID NOT mention this place.
The lifetime value of a customer, client, guest, is often much greater than what is lost or gained at one particular transaction/interaction. I’m using a restaurant here as an example but this applies to any type of business. This is why Customer Service and the Customer’s Experience must be paramount in the mind of every staff/team member.
Do you realize that one team member’s negative attitude, poor response, rude answer etc. can potentially cause a customer to NEVER come back again? In our situation, although there were problems with our food, and our dining experience, nothing was beyond fixable or unforgivable, until we had the interaction with the recently promoted, poorly trained manager. That one person’s way of dealing with us clinched it. In a bad way.
When we returned for the first time, recently, we felt welcome from the moment we stepped in the door. And guess what? The staff was mostly, if not all, NEW. But their attitude, their energy, the positivity was once again in the air. We didn’t feel like strangers. The manager came over and brought her card to us. She stopped by our table a couple times during our dining experience.
So, let’s bring this out of the realm of hypothetical and put some actual numbers on this situation. I posed a question at the very beginning. What is the value of one customer to you and your business? Or let’s ask it this way. If you lose just one customer, how much will that cost your business?
When Michelle and I dine out it’s pretty common that we might spend the following:
Happy Hour: up to $100.
Brunch up to $150.
Dinner up to $200.
Of course that’s just for the two of us, obviously it would be more if we were dining with family or friends. So, let’s consider, if we have a favorite restaurant we might do the following:
Happy Hour- 3 X per month= $300.00
Brunch 1 X per month=$150.00
Dinner 1 X per month=$200.00
Let’s say we don’t frequent that location that often every month. But what if we do 7 months out of the year. 7 X $650= $4,550.00
So, this one location lost a minimum of $4,500. a year from us not coming in. Now what about the times we would have come in with a group of friends, or when family is visiting from out of town and we didn’t take them to dine there? That is easily another $1000. or more. So, now we’re up to $5,500. plus. Throw in a birthday party with family and that’s another $1000.00. That’a a total of lost revenue of $6,500.00
But the amount that is impossible to calculate is the number of people who we did not recommend the restaurant to. These are people who would have come and maybe even become regular guests, but because they were not referred, or even worse, they were specifically told not to go there, the restaurant lost out of countless thousands of dollars.
I hope you can see that one customer is worth so much more than what they may be spending at your place of business just today. And one staff or team member can have such a powerful impact on your customers. The question is, will that impact be positive or negative?
Is your team, your staff and management well equipped, well trained, empowered and inspired to deliver Five Star Service to every customer every time? If not, your business could be suffering and you may not even know who is not coming back because of one not so positive interaction.
I encourage you to make 2019 the year that you make Customer Service & the Customer Experience the Number 1 Priority in your business. Are you putting a proper amount of time, effort, energy, money and training to ensure that this is a major priority?
Thank you for reading. I appreciate and value all my Soupfly Readers from all over the world.
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Cheers and God Bless you!
Christoff J. Weihman
Las Vegas, NV