Customer Appreciation: Are You Doing It Right?

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Call it marketing or customer service or just call it business strategy — you hardly need to debate the importance of demonstrating to your customers that you value them. We all want to retain customers and usually go above and beyond to please them — by giving something extra, by offering lower rates, or by providing premium service.

Larger businesses have loyalty programs to handle this, but small-business owners usually like to use their own discretion and not allow employees an easy way to make these decisions. But good employees want to keep regular customers happy. They may go ahead and offer these “extras” anyway — by giving the room overlooking the pool, making small repairs in addition to the contracted job, or by over-pouring.

These “extras” are part of your  cost of retention, but do you know how much that cost is? Are these extras proportional to the business you are getting from those customers? Are these extras in addition to the priority rates/service you are offering those customers? All these are important questions, but the most important question is — Does your customer even realize you are giving her something extra?

I was working with a small software services firm, and we used to face this problem quite often. Employees tended to do work that was beyond the original scope because they were so invested in delivering a quality product and having a satisfied customer. But doing so would often result in schedule over-runs and the customer would complain about the delay. As the engagement manager, when I explained the cause to customers, they had no idea we had done so much more. Even when there were no delays for customers, cost for the company went up or the employees worked extra hours.

Demonstrate the “Extra” Value

If you give me something for free that I didn’t need or ask for, I am not going to value it. How many times have you used the  photo-editing software that  came pre-installed on your computer? What about the cookies you got at the hotel when you checked in – how many times did you just forget the bag at the reception desk or in your room?
The customer wants to be in control. If you want to offer me the “extra,” why not let me choose what it would be? By giving it for free without even asking, you are telling me that it had no extra cost for you. As this article about over-pouring mentions, I will come to expect the “extra” as regular.

Empower Your Employees to Offer “Extra”

Train your employees to measure the “extra” value and “extra” cost.  Tell your barista or floor manager that you are okay with them away certain extras for free if they think it is the right thing to do. Encourage them to identify these situations, empower them to make the decision, and enable your systems to track the same.

Measure The “Extra” Cost and Results

This means updating your cash register software or just creating a spreadsheet so employees can enter these “extras” and you can measure the cost. Having a good idea of the cost will help you tweak these incentives and also come in handy when calculating your margins or measuring employee performance.

So what do you do to make your best customers feel appreciated?

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About Nilesh

Nilesh has worked in the IT industry for nine years, and is both a PMP and an MBA in marketing. He has worked in and with small businesses, managing projects, leading teams, and improving business processes.At Markitty, Nilesh translates requirements into tasks and timelines. He jumps into whatever is needed, whether it’s marketing, design, or technical architecture. He also keeps the others sane with his intermittent wisecracking.