Specializing in bringing together all components necessary for long term business growth,
profitability and success; and ensuring
that they are working in harmony.

Posts Tagged ‘improving customer service’

Marketing Strategies and Customer Retention

Wednesday, July 10th, 2013

What good is a business concept without advertising?

What good is advertising without returning customers?

And what good is success without a long term strategy?

Effective advertising needs to reach your intended market – it requires consideration for the ideal ingredients to make this happen.

Maintaining and growing customer share is a result of perceived value, great service and an engaged team who are there to serve

Success comes when you offer great products and services and as a result, the customer falls in love with you!

Now – you have built a solid model for growth – knowing how and where to grow is the next part that is both fun and tricky.

Big banks and fees – here they go again

Wednesday, October 12th, 2011

In response to new rules that recently went into affect designed to insulate merchant’s excessive fees, Bank of America, and Chase have decided to shift the burden to their customers by having them pay a monthly 5.00 fee for the privilege of using their debit cards. And, just one swipe per month will do ya! Wells Fargo is also trying out a lower fee of 3.00.

In fairness to the banks it is important to point out that they have spent hundreds of millions of dollars to create a system that provides for debit card services. This investment included the technology and infrastructure to support required, to offer debit card convenience. Wal-Mart and Home Depot led the efforts to alleviate the cost to the merchants through legislation. I personally would have supported relief for merchants generating under fifty million annually.

Needless to say, the fees are being shifted AND because the big Banks have lost their credibility for goodwill – it is difficult to feel sorry for them. So let me reiterate, this is a charge levied against you for accessing your own money! So, let’s get this straight, first you get paid literally next to nothing for giving them your money to invest, then they charge you excessive credit card rates* for you to borrow (compare your APR to the current Prime rate for lending – even 8% is excessive)

Worse yet, many small business owners today are often sneered at by these guys at the idea of giving them a loan, or a decent line of credit.

Fee addition: How did we get to this?

For any of you old enough to remember, there was once a time Banks actually liked their customers. Rather than charging excessive interest rates on credit cards and loans, they actually paid decent rates for holding your money. Now of course, one hardly is paid anything at all (if anything) and for many, is expected to pay them to take your money.

Banks use to climb over one another to offer you a free toaster or microwave oven if you opened an account with them. Then came the ATMs. Suddenly they were offering additional incentives to get us all hooked on using ATMs. The banks also competed for bragging rights as to who actually had the most ATMs. Then the big push began to encourage consumers to use their ATM cards (soon to be renamed their debit or check cards. Of course all the incentivizing and bribing was not necessarily carried out to the benefit of the customer (as the banks would have you believe)

  • Labor savings – ATM machines kept their cost down by allowing banks to eliminate staff, which would have been previously required to manage those who needed to cash a check. In addition, automated withdrawals though ATMs also reduced human error through computerized record keeping.

As an added bonus, banks realized a financial bonanza in charging non-customers excessive fees to access their networks!

  • Debit Cards – As with ATMs, debit card use was incentivized to lower their cost of business under the guise promoting customer conveyance. Once again, it reduced the labor cost of constantly refilling their ATMs with cash. Better yet, removed another roadblock for a customer to spend money if they did not want to use their credit card. Now, the “I will need to write a check or withdrawal from the ATM” obstacle was eliminated.
  • Overdraft Fees – For years, banks enjoyed another money bonanza of offering overdraft protection for anyone who spent money without having an adequate balance. The majority of those affected were not intentionally over-drawing, they just neglected to double check for new fee’s banks were slipping in which affected their balances.

  • Fee’s are like heroin to banks – Senior Bankers I have spoken with actually confided that they have “fee committees” set up to think up new fees! It is an addiction for Banks to both make up and enforce them. Therefore, when they are taken away to the benefit of the consumer, well, the banks, like any heroin addicts, get upset!

Rather than placing focus on taking care of their customers and encouraging long-term satisfaction, Bank of America, Chase and Wells Fargo are moving forward with a plan to access fees for their customers who use their Debit Cards – and the continued war against their own customers grinds on. Well unless their customers wise up and move their money to a Bank or Credit Union that is not so fee addicted.


Customers: When they don’t return due to silly policies

Thursday, October 28th, 2010

Recently I dined at a popular eatery in Northwest Austin. The well dressed man in front of me had just ordered his meal and then after paying for it, held out his stamp card (frequent stamps provide for a free meal) and began: “Last time I was here, I forgot my card; would you be able to stamp it for last time as well?”

The order taker declined exclaiming that it was not the policy to accommodate customers who failed to remember their stamp previously and that there were no exceptions to the rule.

Forty-five minutes later, as I was leaving the premises, I overheard two professionals chatting about their dining experience.  One of them was the man who had been declined the stamp for his previous meal “I am never returning to this place again, he fumed – I don’t care how good the food is!”His friend tried to reason with him. He even emphasized that it had been part of their Friday tradition for over 1.5 years to visit the eatery but to no avail.

How sad, I thought to myself, that one silly shortsighted policy could cost so much money. Out of curiosity, I calculated the following:

10 meals required to receive a complementary meal = $10.00 average = $100.00 – less $10.00 (one meal) = $90.00.So, if he had been dining at least once a week (as it appeared in the conversation) then:

52 weeks = $520.00 x 1.5 years = $780.00.

Here are the facts:

The man did not look like he was not a scammer but an honest professional. He had happily patronized the Café for over a year. It was a tradition. He had a simple request, which was denied and then left and stating, “he, would not be back”.

Many places will consider request such as the one the regular customer had on a case-by-case basis. It takes a small amount of discernment to sort the free loaders from the sincere. However, establishments that fail to do so with blanket policy decisions tend to end up spending far more money on bringing in new customers rather keeping existing ones.

So here is my question, “was declining his request for a simple stamp worth it?”

Last weekend I took my boy to a new donut place up on Parmer near Cedar Park. Looking forward to a new experience, we ordered nearly 9.00 worth of donuts milk and coffee. As always, I also requested regular sized water with extra ice. The owner held up a tiny cup and stated that he could offer me “this size only “as a courtesy. “Otherwise he continued, I have to charge you for a regular drink.”

Sitting down I asked George how many people he thinks actually make the same water request that I do. “Not many he replied. Most people don’t drink as much water as you” I then challenged him to a lesson in Business 101. What was our intention of coming in here today I asked? To try a new place”, he replied. In addition, “how many times a month do you think we would return if we had a pleasant experience? Probably, well, at least twice a month. “So, if we spent $9.00 per visit X 2 X 12 months, how much is that?” $216.00. Moreover, how much would the regular size cup probably really cost him? .25 x 2 = .50 x 12 = $6.00 per year. So, how much was it costing him a year by losing me as a customer? $216.00 – $6.00 = $210.00.

“Was declining a request for regular size water worth it?”

Everyone understands the basic premise that it is less expensive to keep a customer then to lose one. Great companies learned this that hard way when they failed to pay attention to customer nurturing. Instead, billions of dollars continue to be spent annually to lure new customers – where if businesses both large and small spent less keeping their existing ones happy, then they would have more resources to build out and expand and yes, increase the chances for higher profits!

“So, are short-sighted policies that deny simple courtesies to customers always a smart idea?”

Well, you do the math.