15 March, 2013

Watch found, opportunity lost

Melbourne Herald Sun, Thursday March 14, 2013

I was so pleased to receive the message from the hire car firm in Noosa - had I lost a watch? Yes indeed, I thought it had gone missing in the sand but it turned up under the car seat. I thanked them, by text, and asked for it to be posted to me, I would pay for all expenses.

But no. They were too busy, it would take too much time, I must send a proper, stamped, self-addressed envelope and they would then post it. OK, no big deal - but it did sour, a little, what had been a warm exchange. I brooded on this. What would Winston say?

For many years, my friend Winston Marsh has lectured thousands around Australasia, and beyond, about the value of a customer. I had just spent $600 with the firm and been very contented with their car and service. How should they treat me?

"Why did they even message you?" asked Winston. "They should have returned it to you with a $10 voucher for your next visit to Noosa. They spoiled the chance to make it a great service experience." 

Warming to a favourite subject, he mused: "Where did it come from, the idea to ring you? It must be down from the top, an attitude running in the firm. It's management that has the responsibility to make policy that's then passed on by the middle managers. 

"Can you imagine what Richard Branson would do? He'd send you the watch and a voucher to make up for the time you were without it!" he smiled.

In our business you spend a lot of time communicating the obvious. Like - how much is a customer worth? It's quite simple to calculate. Just take the money you spend every year on marketing, advertising, mail outs, sales staff, rep calls, submissions and tenders - and then divide that total by the number of active customers on your books. That is, someone who has spent something in the past year. The figure is your cost per customer. Frightening, isn't it?

Of course we all know that eighty percent of the business comes from twenty percent of the customers - but that remaining eighty percent of customers still cost a massive part of your expenses.

Getting back to hire cars, what's your rule of thumb on the value of a customer, Winston? "For a big firm like Avis or Budget, who've got counters at the airport and big corporate contracts, I'd guess ten to twenty dollars a sale - probably more." 

But for a little off-site firm like I quoted? "Every customer comes through advertising or other media," he explained, making the job much harder. "For a small hire firm a customer has to be worth at least $100."

Which is pretty good justification for spending $1.20 in stamps, a padded envelope and the evening drop-off at the post office.

In return, they would have gained an advocate amongst the business community. Whenever a colleague was going north for pleasure or trade, I'd slip in my story about this car hire firm that was so honest they charged me what had been quoted, to the cent - and immediately sent back a watch I'd dropped under the seat. 

Word of mouth is the strongest form of advertising you can get. These days you can extend this to Facebook and Twitter.

The way to win - and keep - customers is by talking to them, on any excuse. A friendly note in the bubble bag, hoping I had enjoyed my stay and looking forward to my return, would have been a perfect touch. Ask Winston and Richard.



Tanya Makin said...

Fascinating article, thank you. I know Winston Marsh – from years ago at Kodak. But I had no idea you had lost a watch. I do hope someone returns it to you.

Sylvia Huber said...

... so did you get the watch back??? I always like a happy ending!
Sylvia Huber

Ray Beatty said...

For those worried about my watch - yes I did get it back, in the envelope I sent. I was just pointing to the missed opportunity to give (as Winno would say) Faaaantaaastic service.