How to set and meet customer expectations

According to Emmet C. Murphy and Mark A. Murphy, authors of Leading on the Edge of Chaos, a 5% reduction in your attrition rate (churn rate) can increase your profits by 20-100%.

So if you’re turning over $1.5M a year, by improving your churn rate by just 5%, you can increase your profits by $300K – that’s astounding.

In this article I’m going to be deep diving into one of my 9 customer retention strategies – customer expectations.

I consider this customer retention strategy one of the easiest to implement. I mean come on, customer expectations, that’s not hard right?

Well, you’d be surprised. A lot can go wrong during the sales process. Whether it’s sales guys trying to sweet talk a close, or prospects not fully understanding the agreement, somewhere along the way a customer’s expectation of the service he/she will receive, is established.

It is your job to make sure that this perceived expectation of service, meets what you are capable of delivering.

To help you, I’ve put together my three step crash course to setting and meeting customer expectations.

1. Be honest about customer expectations in sales process – don’t over promise

I can’t stress how important it is to set expectations right from the get go with your sales people. There is nothing a customer hates more than a company under delivering. When your sales guys set expectations so high and you can not deliver, that’s when you run into problems.

A great example I like to bring up is SEO (Search Engine Optimization) companies. There is such a bad rep about these guys just ripping people off left, right and center. But at the end of the day, a lot of the time it’s the sales guys (or biz owners) who are setting expectations far to high.

Comments like, ‘you’ll rank first page google’ are common practice and when they fail to deliver, the customer is unsatisfied, complains and cancels.

Think about a particular service that you have chopped and changed providers frequently. Ask yourself, why did I leave the last company. 68% of the time, it will be because their service did not live up to your expectations.

Be honest, and set accurate expectations early to stop customers leaving later.

2. Revisit customer expectations after the sale closes

This step is particularly helpful for business owners who take a back-seat in the sales process. If you have someone else handling all your new customer acquisition and sales, make sure you revisit expectations with all new customers after the sale closes.

This is a great way to ensure that everything your sales guy has promised, actually is doable. It will also give you a good chance to understand what they want and make sure you deliver and exceed their expectations.

A customer loves when their expectations are exceeded.

Have a think about the last time you went, whoa that was a great experience. It may have been the local Steakhouse, or the friendly lady down the road that sells you cookies. Something about their service made you go whoa.

You need to create that ‘whoa’ factor in your business and start turning customers into raving advocates.

3. Keep your promises and apologize when you don’t

Everybody makes mistakes from time to time. Sometimes you wont meet customer expectations for one reason or another, there might be internal or external factors… but lets face it, sometimes sh*t happens.

It’s times like these you need to be honest with yourself and apologize when you don’t meet customer expectations.

Rune Tispmeak from Stea IT speaks about this in our case study on how he saved a $180,000 year contract – definitely worth a look and see how he went about admitting his shortfalls and overcoming a sticky situation to re-earn a client’s trust and further strengthen the relationship.

Here’s an excerpt from the case study:

“I was concerned enough that I got straight on the phone to the managing director and we had a very honest discussion. I said to him as a business owner I valued honesty and constructive criticism and if there were problems I wanted the opportunity to correct them. He admitted to me, that they were considering all options as they did continue to have ongoing concerns about our ability to meet the needs of the organisation”.

Download the full PDF here.

So there it is, my three step crash course to setting and meeting customer expectations. I hope this has been helpful and you can start retaining more customers.

Remember, by improving your churn rate by just 5%, you can improve profits by 20%. 

Gordon Tan

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Gordon Tan is an entrepreneur based in Australia who has started and sold multiple technology companies with a combined value of $150m. This included a client satisfaction benchmarking platform which gave him first hand insight into the best practices of over 6,000 businesses. After retiring at 35 he is now a recognised thought leader on winning and retaining clients - His two passions: making clients the heartbeat of a business no matter what the product or service and this blog.

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