Lost Income - Over the long term
Clients, good or bad, are not, typically, one off. Further, you don't want them to be, generally speaking. Sure, when a client wants to hire you because this is their first/only assignment in your locale, just as the shopper in town for business or on a vacation, you appreciate that business, but not as much as the repeat business over time.
The long term client is exponentially worth more to you when kept, and significantly detrimental to you when lost. Conversely, the long term low-paying client costs you when kept, and frees you up to do better paying work when lost.
Consider that you spend significant efforts to earn a client. Whether mailings, or meetings, phone calls, and so forth. You get your first assignment from them, of, say $1k. (If you're a big time advertising photographer, go with me on this, and just 10x the figures I am putting forth.) If you do well, you'll earn not just the $1k, but the next assignment as well. That accounts for another $1k next time. Then again, another, and another, and another. Over time, a $1k client, properly managed and serviced, can generate $20k-$50k, or more.
If I said to you, after you botched a job, or just were laxadasical about your service/followup component of an assignment, that you would loose well over $10k, would you handle things differently?
I have quantified, for a vendor of mine, that they have lost in excess of $15k in business from me, over time, (with more losses accruing over time) because they didn't handle my business as they should have. It happens, and I am concerned about the possibility of it happening to me with my own clients.
There is a general rule about customers and who they will tell about their experiences. In a Shaw Resources article - Are Your "Satisfied" Customers Leaving You for Higher Value Elsewhere? - they repeat the commonly understood business reality that "...a happy customer will tell 2 - 3 friends about a positive experience - but an unhappy customer who has deserted your company will tell 10 - 13...". They then go on to report that "...Six out of seven customers who should complain, do not complain. They silently take their business elsewhere and you may never know it. The one in seven customers who do complain are saying, if only you could correct the situation, they would like to continue doing business with you."
Other research shows that an unhappy client will share their negative experiences with you for, on average, 18 months, which is plenty of time to talk to those 10-13 people who are dissatisfied with your efforts. If you are fortunate enough for them to return, it will take a dozen good experiences to make up for the one bad one.
Making outreach to clients, and determining what you can do better next time, increases the likelihood that they will. Further, it helps you know where you might have dropped the ball, so you can fix it for the next client. This effort will help those clients tell their 2-3 friends about how well you did, and word-of-mouth promotion is second to none.
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2 comments:
Excellent post. This is so very true; I know I tend to follow the trend. I'm happy to tell friends about a good vendor and even more so to tell everyone who remotely cares about a bad vendor. What's amazing who some of those crummy customer-service vendors are & how little they seem to care about the word-of-mouth advertising they get--even after being told I'm giving them all the free ads they want, to stay away from them.
Hi John, This is exactly my mantra - my wife has heard me say it over and over.
Like so many other areas in life and when dealing with people in general, negatives seem to accumulate and get spread faster than positives, so it takes a continued and concerted effort to always do positive things, whether they're in our business dealings with our customers, or with our kids, family and friends.
It's sad that humans glom onto negatives, but that's just the way society is. If we are content with status quo, if we don't strive to improve in our customer relationships, then over time they will get used to our service, even when it is excellent, and find reasons to complain. So, we have to always find ways to up our own ante, even if they don't seem to be asking for it.
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