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Your EnterQuest Bulletin - Issue 239
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| Thought for the week: "Business is not financial science, it's about trading...buying and selling. It's about creating a product or service so good that people will pay for it." Anita Roddick |
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In this week's issue:
The prodigal customer
What would you do if 20% of your customers stopped doing business with you?
It's thought that most businesses lose between 15 to 20% of their customers every year. So to achieve just a 10% increase in sales, you have to find 30% more customers. These statistics are startling, considering the average business spends more money finding new customers than it does on keeping old ones.
But why would a customer stop doing business with you? They might do so for any of the following reasons:
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3% move away.
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5% develop other business friendships.
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9% leave for competitive reasons.
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14% are dissatisfied with the product or service.
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69% quit because of an attitude or indifference towards the customer by the owner, manager or employee.
This means that most of your customers - the 69% - stop doing business with you because they're unhappy.
Their unhappiness could result from a number of reasons, but will cost you business in the end, no matter what reason they give for their unhappiness or defection. Research by T Mobile found that for small businesses a lost customer can equate to as much as £5,000 in lost revenue (as reported in The Guardian). Can you afford that kind of loss? Thought not.
And here's more food for thought - according to the same survey, 35% of lost customers would have stayed with their existing supplier/dealer/provider if the business they were dealing with had simply apologised for getting things wrong.
Now, unhappy customers don't keep quiet about the way they feel - they tell friends, family and colleagues about their experiences and that means you're losing out on potential sales from these guys too. In fact in 2006, the Institute of Customer Service (ICS) reckoned that more than 60% of customers are willing to complain most of the time, a figure which jumped 10% in five years.
So, how do you get all of these people buying from you again? Well, it's down to how you respond to their answer or complaint. You have to assume the statistics are right and that you did something to offend them. Apologise and ask for forgiveness. Resolve their complaint as quickly as possible - and don't leave it to junior members of staff to do it. Deal with it yourself. Good businesses use good - or even great - customer service to keep customers coming back, and there are studies that show that good customer service has a positive effect on a business' finances.
So, imagine that your customer hasn't been buying from you in a while. You ring them up to ask why. How do you tackle this potentially tricky situation? Begin by telling the customer the truth - that you've noticed they haven't been buying from you for a while and you sense something is wrong. Be forthcoming and ask 'Is there anything wrong?'. Follow that up before your customer responds by adding 'Have we done something wrong or did we offend you? If we did, it certainly wasn't intentional'.
Don't under-estimate this strategy. Even big businesses use it. Think about how many times you receive a call from your mobile phone network provider, asking if you'd like an upgrade or if you're happy with the service you get. So keep good customer service as your business' number one priority - it might just help to boost your revenue.
How to outsource successfully
You can outsource almost anything. Over the years outsourcing has extended into areas such as secretarial and PA services, bookkeeping, telephone answering, PR, graphic or web design etc. The question to ask yourself is, must you do that particular task yourself or in-house?
If not, rather than hiring extra help, consider outsourcing. It can help to cut costs or free up time - in other words, get others to do what they're good at while you concentrate on exploiting your own strengths. Here are some handy dos and don'ts to follow if you're thinking about outsourcing:
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Identify non-core areas. Identify low priority and non-billable tasks and those where you might be more effective if you freed yourself up from them.
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Identify potential suppliers.
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Go for quality. Find the best supplier you can afford.
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Set your requirements out clearly on paper in the form of a tender. Be specific. Then ask about costings, charges and fees.
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Test each supplier first where practicable.
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Draw up a good contract. This will help to ensure you get the services you want rather than for what the supplier would like to provide.
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Be prepared to change suppliers if you're not happy with the service you're getting. Keep a file on alternative suppliers.
Don't:
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Forget about building and maintaining the relationship with the person you choose. This will help to maintain the quality of service.
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Let costs get out of hand. They can escalate if you don't control them.
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Skimp on details of penalties if their work isn't up to scratch. If they can walk away and leave you in a mess, then you'll simply have to start at the beginning.
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Forget to ask for references from previous clients.
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To receive regular tips, articles and how-to guides to help you run your business more effectively you can subscribe to BETTER business magazine. |
Each week we provide you with summaries of some popular or emerging business ideas in the UK and elsewhere around the world.
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Cookware retailer. This business idea explores the niches and gaps in the cookware market, such as selling ethnic cookware, offering wedding list services and stocking items that are not only practical but also look good.
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Online takeaway ordering. hungryhouse is a website that enables customers to search for restaurants in their area that will deliver takeaway food. The site takes a commission from each restaurant a customer orders from.
Regularly improving your vocabulary is not just about learning a new word and its meaning. It will improve your general knowledge and make you feel and act smarter in all sorts of personal and business situations.
Do you know the meaning of the word 'brio'?
a) a type of ballpoint pen
b) dour or depressive
c) enthusiastic vigour or liveliness
d) an abrasive manner
Answer at the end of the Bulletin.
The following topical business issues have been recently reported in the media. Did your radar pick them up?
1) Online auction sites like eBay and QXL have agreed to inform businesses using their websites to sell goods that they must meet the demands of which legislation?
a) the Online Auctions Regulations
b) the Electronic Selling Guidelines
c) the eBay and Associates Act
d) the E-Commerce Regulations
2) Which area of the UK is set to spend the most money celebrating Christmas this year?
a) Scotland
b) Wales
c) East Anglia
d) South West
3) The majority of small enterprises say they use the roads for business, but why do most say they won't use public transport?
a) it's not convenient
b) it's not fit for purpose
c) it's too infrequent
d) it's too expensive
Answers at the end of the Bulletin.
Optimise your press release for news search engines
There's a growing trend in the PR sector to optimise press releases for Web 2.0 applications such as news search engines. Dubbed PR 2.0, this emerging field is no longer the preserve of search engine optimisation specialists. NewsForce.com's archive of relevant articles helps you learn more about PR 2.0 and the type of content you need to produce to succeed.
The Apostrophe Protection Society
This website will help you to avoid making a faux pas if you're writing a sign or updating your website. It explains the rules of when and where to use an apostrophe in written English, and shows examples of correct and incorrect usage.
Designing Demand workshops
The Designing Demand website is from the Design Council and aims to help business owners find out how design can help their business. You can book a free workshop on the website and also read about case studies and success stories from businesses that have used the service.
Calling all British Small Business Champions
The British Small Business Champions (BSBC) awards are open for entry. The awards are open to firms with no more than 50 staff and have been trading for at least five years. Six area champions are chosen to go forward to the national final, with the overall national champion winning £10,000. Two new categories - Young Entrepreneur and Most Promising New Business - are available to enter this year.
This book is an up-to-date and practical one-stop guide for people thinking about raising finance to start or grow a business, or manage the finances of a business they already run. It covers fives sections - getting off the ground, growing the business, coping in a crisis, pricing, and good cash management. Check out:
Just one word answer
The answer is c).
Brio means enthusiastic vigour or liveliness.
The market stall trader's brio attracted a large crowd to look at his goods. |
How's your business radar? The answers
1) The answer is d). After talks with the Office of Fair Trading (OFT), online auction sites have agreed to inform business traders of their obligations under the E-Commerce Regulations.
2) The answer is a). Consumers in Scotland will spend an average of £848 each over the festive season, according to business advisory group Deloitte.
3) The answer is b). A joint report by the British Chambers of Commerce (BCC) and the Royal Automobile Club (RAC) found that 70% of smaller firms thought public transport wasn't fit for purpose. |
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Good luck
The EnterQuest Team
This information is meant as a starting point only. Whilst all reasonable efforts have been made, the publisher makes no warranties that the information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate. |
