Keeping key customers’ business has always been important. But today, with consolidation taking place at all levels of the LBM distribution channel—from manufacturers and wholesalers down through dealers and builders—the fact that companies are acquiring others with increasing velocity makes the shrinking number of key customers more valuable than ever before.
Complicating an already challenging situation is the reality of “the Amazon effect,” which refers to the evolving disruption of the marketplace by the rapid growth in e-commerce. From our perspective, the most relevant part of this effect is the “I want it now!” expectation by customers of all stripes.
When researching data for a webinar in July on “Building Customer Loyalty and Retention,” I ran across some insights that bear repeating. Shep Hyken, a customer service and experience expert whose articles appear in Forbes, shared the astronomical cost to companies when their customers change suppliers, and pointed out that often it was bad customer service—not poor product quality or high prices—that was the cause. He wrote: “While the overall service experience is important, it’s the connection to the customer that can make an even bigger difference. Satisfied customers aren’t the same as loyal customers. Satisfactory is a rating. Loyalty is an emotion.”
This webinar, which featured a conversation with Carl Herrmann, operations manager for Sears Trostel Lumber in Fort Collins, Colorado, focused on how Carl and his team turned a tough situation with an unhappy customer into a satisfied and loyal, client. I encourage you to check it out.
There’s no question in my mind that technology is a critical element for LBM companies to build their business. But it takes more than that. What I love about this story is that the real-world solution came down to the most fundamental aspect of running a business: just listen, really listen, to what our customers need from us.
Then again, there are times when listening to customers helps us realize that we want that customer to go away. This month’s Real Issues. Real Answers. tackles the topic of firing customers. Whether or not you’ve ever fired a customer (the odds are good, since 94% of LBM Journal readers have), I encourage you to read this lively discussion. Nearly 200 readers shared their stories, their insights, and their calculus as to when it makes sense to fire a customer. If you’re looking for different perspectives on dealing with a soon- to-be-former customer, you’ll find it here.
I’ll leave you with this nugget to chew on. Regardless what business we’re in, our customers are more than willing to tell us what they want and need from us. If they don’t offer it up, it’s up to us to ask. Then just listen. Then just deliver. If we don’t, we’re at risk of firing ourselves.