| Don't throw away $18,000! Case Study: Are You Providing Great Customer Service? | |||||||||||||||||||||||||||||||||||||||||
| Recently I had a customer service experience that could have been better. Way better. My intent with this blog post is to:
- Give you the background on a recent customer experience that I had. Please read this thoroughly and then leave your thoughts in the comment box. I'll do follow up posts and training. The more you interact, the better the training will be and your customer service!
BackgroundIn the beginning of 2011 I moved to Sacramento, CA. Which is about 1.5 hour drive from Napa Valley and Sonoma, "Wine Country." Perfect time and location to start learning about wine and try different varieties. That's what exactly what I did. I joined the quarterly wine club at Viansa Winery. in May 2010. Every three months they pick out six different wines for your shipment. They either ship it to you or attend the member's only party and pick it up there. Viansa is a member's only winery, meaning they don't sell their wine through retail. You can only get it straight from them. There's no membership fee. If you're in one of the wine clubs at Viansa, you're a member. The quarterly wine club is about $150 every three months for six bottles of wine. Very reasonable in my mind considering the benefits that you get. Viansa has a beautiful terrace overlooking a valley. The members party is held there and Viansa prepares food and pairs it with different wines. It's all complimentary if you're a member. It's like a country club in my eyes. Perfect way to build a community, retain customers, introduce people to different wines available and for guests to bring non members too. There are lot of other benefits of being a member as well. As a customer and from a business analysis point of view - I loved it. Until, my most recent customer experience. Read the emails below to see the interaction and then continue on to my notes. --------- [Start email correspondence]
Subject: Happy New Year! Your Viansa Family wishes you all the best in 2012! ---------
Subject: Re: January Club is ready for Pick up! Hello, This looks great! I'd like to RSVP for two for next Sunday. Thanks Chris ----------
Subject: Re: January Club is ready for Pick up! Hi Chris, Unfortunately we are at capacity for our members party this month and can no longer take reservations. But I will be glad to add you to the list for next month’s party on the 19th if you would like. I apologize for the inconvenience. Thank you and have a great day, [Name and phone removed for privacy reasons.]
---------- [End email correspondence]
Tell Your Customer Why - Do NOT leave them in the dark.That's the response I get? I'm a reasonable person, I know things happen and things don't go according to plan. But tell me!
- Is the event indoors and they are at the Fire Marshall's limit for maximum capacity? Tell Your Customer Why - Do NOT leave them in the dark. The majority of people are reasonable. But you need to tell them what happened and why - otherwise people's minds wander and they get irritated. For 90% of people explaining what happened is fine. Their email says nothing about limited seating. I've always been under the impression, "The more the merrier" and just RSVP so they have a head count and can be prepared. Their email even says: "** Our Member Parties have become extremely popular. Please call us at [Phone removed] or email us at [email removed] to reserve your spot. We want to make sure that we have enough wine and food for everyone!" [Emphasis is mine.] Nothing about limited seating or anything. Do that and….
Tell them how you'll fix it or make it up to them?I have no idea where my quarterly shipment is or even how to get it. I could email them and ask, but I shouldn't have to. Part of me wants to see what they do (if anything) and how long it takes them. Where's my shipment! As of this initial writing, it's been 12 days, and I don't know. Plus I missed out on the party. Hard to make up, yes. But not impossible.
Add a personal touch.In today's world we do so much over email. The power of a phone call is HUGE. If someone picked up and the phone and called me to apologize and explain things. I'd be fine. I'd still be a bit disappointed, but I wouldn't be canceling my membership.
Put yourself in your customer's shoes.This can be difficult, but stop for a second and put yourself in your customers shoes. Napa Valley and Sonoma county are rural areas. My guess is that 80% of the people have to drive at least 20 miles or more to get there. My girlfriend and I drive 57.7 miles each way to go out there every three months. We drive over a hundred miles at close to $4 a gallon gas to spend half the day at Viansa to BUY from them. I literally put the members only party on my calendar as I'm leaving the current one! How many businesses have customers like that? Not many….
Remember what you're selling. It's not just the product.You're not just selling a product. You're selling an experience. Whether it's just great customer service with one-on-one attention or a monthly party like Viansa. I'm not a wine expert. Based on purely on price, Viansa wine is overpriced. But, the cost of the bottle of the wine for the quality (it is good wine) and the experience as a member is great deal. If I just wanted to get wine at the cheapest price I would buy it at Costco. Or even turn to Gary Vaynerchuk's Wine Library TV. He's got great prices and a great experience (But I already spend enough time at my computer and want to go somewhere!) Now my experience is tainted. The other night I went to open a bottle of wine, saw the Viansa bottles and thought about the recent customer experience I had. I didn't open any of their bottles. Now the wine doesn't taste different, but the experience sure does.
What's the lifetime value of your customer?I'm 29 years old. I'm going to buy wine for the rest of my life. The question is from who. Let's say the average lifetime customer is for 30 years. 30 years x $150 x 4 (Number of quarters in a year) = $18,000! That's a lot of money…. but that's a TON of money from one customer. That's just from me purchasing the quarterly shipments. What's the value when you add in:
- Other bottles of wine bought. It's a lot more then $18,000 when you add that up. It's easy to keep a customer then it is to get a new one.
Are you throwing away $18,000?I ended with this point on purpose. You see how the math breaks down? That's about $50 a month. What costs about $50 a month? USANA's Essentials with shipping and taxes added on are about $50. The Essentials is the base product that most people start off with. What's the value when then start adding more products or refer other people? LIke the Viansa example above, it's a lot more. I've been a USANA customer for 8.5 years. Roughly estimating, I've probably average $250/mo in products that I purchased from USANA. $250 * 12 months * 8.5 years = $22,500. What about for the next 30 years…. $250 * 12 months * 30 years = $90,000 dollars. That's over hundred freakin' thousand dollars! I plan on living for more then 30 years too!
Your Plan of ActionHopefully you'll never look at a "small" $50/mo (Essentials) customer the same ever again. If the math I just went over didn't make your jaw drop, reread the post again! I'm using this example as a training series on Customer Service. The more you interact, the better the training will be. Think about these questions and post them in the comments below:
- What's the lifetime value of your best customer? Take one or two of those questions, think about it and answer below in the comments please. As a side note, you're hopefully understanding why Dr. Sam, Jason Parker and I are putting so much work into the Essentials For Life Program. You now understand the value of each and every customer. Look forward to hearing from you. Chris P.S. If you know of any great Winery's in Napa or Sonoma with the "community feel" - please share!
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