Tom Feltenstein

We’ve been bombarded with public relations nightmares recently. From the Gulf Oil Spill to Toyota, to the McDonald’s recall of tainted Shrek glasses, we can’t help but wonder what’s going to happen next. A veteran of the McDonald’s team, I’m impressed at the quick action the company took to remedy the problem. McDonalds’s took care of business pretty darn quick by announcing a voluntary recall of $15 million dollars worth of Shrek glasses when, from a regulatory perspective, the glasses weren’t really toxic to kids. But they know the power of perception and they did not want to lose the trust of their customers. To read more about McDonald’s recall, click: The brilliant lessons from McDonald’s recall.

McDonalds issued the recall as a precautionary measure out of concern for its customers’ health and didn’t allow the crisis to take control — unlike British Petroleum’s fiasco in the Gulf. If we’ve learned anything from BP and Toyota, it’s that allowing negative public opinion to stick to a company is the road to certain death. Granted, these are all vastly different incidents, but the underlying message is the same – take quick action, make smart decisions, and accept responsibility.  As business owners our customers’ trust is paramount if we want to keep them. The most important aspect of business is to adhere to the 10 Commandments of Customer Service, the first of which is “honor thy customer.”  How have you managed crises in your business?

One of the funniest movies I’ve seen is My Big Fat Greek Wedding. One scene in particular stands out. When the daughter, Toula, tells her father she wants to go to college, he looks at her and cries, “Why you want to leave me?” Today many business owners find themselves spouting the same words to their customers. Customer loyalty is a major concern because without repeat business, you will never grow. The most precious asset a business has is its current customer base and it takes a great deal of time and energy to cultivate those relationships so when they leave, it hurts. On average, it costs five times as much to acquire a new customer than to retain an existing customer. It is important to have in place a solid customer retention strategy, but far too often these strategies aren’t proactive enough to prevent the loss of customers.

In order to take action you must first be able to see the early warning signs. Take a look at your current customers, are they acting differently? Has the regular customer who eats lunch at your restaurant, three times a week only been in once or twice this month?  Are there people who used to come in your store or shop very regularly that you haven’t seen in months? If so you need some answers and quickly.  Setting up ongoing customer feedback systems and “listening posts” throughout your organization will enable you to spot unfavorable trends so that you can take action to reverse such patterns before it is too late.

When one of these long lost customers reappears, offer them a discount coupon or free gift and thank them for being your customer. Sometimes that’s all it takes to draw them back in. You might also tell them that you are evaluating different areas of your business and ask if they can offer some suggestions on things that might be changed or improved. Often this is the only opening they need to let you know the real reason they haven’t been around much. Once you know the real problems you can address them. How do you retain your long time customers?