Unfortunately, many businesses fall into the trap of ignoring the ‘silent majority’ of their customers. It happens organically and it is understandable, but this practice is a serious leaky bucket at the centre of any business. So what exactly is this mistake and how do we fall into this bad practice?
Every business has its fair share of ‘customer issues’. While many customers are a joy to service, some can be a real pain and cause a series of issues that have to be addressed. This generally requires the attention of many members of the team, from junior staff to the most senior. Of course, there are issues with this…
Firstly, while this may – in select cases – be a necessary evil for highly-profitable customers, with less profitable customers it eats into profit margins and often results in a loss making situation with the respective customer. Secondly, and perhaps worse, it takes attention away from the ‘silent’ customers.
As every business leader knows, customers are not born equal. While every customer is uniquely different in some way, I feel you can generally group customers into three groups:
Upon reading this summary, I’m sure you will recognise these groups in your own business. You can probably assign a number of names and faces to each group. When I do this exercise with business leaders, I generally find that as they do this they make comments about each group, such as:
The fact that group three are taken for granted is understandable. A business will generally always pay most attention to group one as they are the biggest customers. The customers in question place large and regular purchases and do not negotiate on price. For this reason, they add a disproportionately large amount of profit to the business. For this reason, the business leader does all they can to keep this customer group happy.
Group two consume a disproportionately large amount of time without adding any of the profit. They also fail to show any appreciation and gratitude; at times it’s a wonder why they even use your services. They are unpleasant to deal with and complain over every little thing. While their purchases are small, they demand tailored packages and special treatment.
Very often this group tends to be unprofitable – that is to say, it costs more to service them than the income they create – simply because of the considerable disruption they cause. While a small group of customers, their many issues seem to occupy a considerable amount of everyone’s time. You should actually identify this group and decline their custom, but that is not my point here.
By the time you have kept your biggest customers happy and serviced the many and varied issues of the perennially unsatisfied, there is no time left for group three. There just isn’t time to think about this group. They are the forgotten group; the silent majority.
However, group three should form a key part of your business model. While their purchases are not as large as group one, they are still profitable and add profit to the business every year. They are low maintenance and accept your services as provided without complaint. They pay fair prices and many even thank you. And because of the number of customers in this group, together they make a significant contribution to the bottom line profits each year.
Despite this, we ignore them. Worse still, we ignore them in favour of customers who are unprofitable and unpleasant. Not only does it fail to make sense, it just isn’t fair. While this group do not ask for anything, this does not mean that we should ignore them. Why? Because this strategy is unfair to this customer group and is unlikely to create a sense of customer loyalty. This is a major issue for any business.
Customer loyalty remains one of the most effective business growth strategies – yet one of the most overlooked. Customer loyalty is so powerful for several reasons. First and foremost, it is considerably less expensive to keep an existing customer happy than acquiring a new customer. Secondly, existing customers are much more reliable and their purchasing trends can be predicted, giving stability to the business. Thirdly, happy customers recommend their friends, family and associates; and enquiries via referrals are without doubt the easiest enquiries to convert into sales.