The Customer Experience (PART 1)

The Customer Experience: How To Wow Your Customers (PART 1)

TRANSCRIPT: Hi, this is Steve Stauning with another Short and Sweet video lesson. Today’s lesson: Gaining the Undeniable Advantage. This is the one about the customer experience. How to WOW every single customer every single time. This was originally recorded live as part of our Undeniable Advantage Live Video Webcasts. To register for one of our webcasts, go to They are free to register, free to attend. We broke up this Undeniable Advantage Live Video Webcast into Short and Sweet video training lessons for you and your team. Enjoy.

We are live, this is Gaining the Undeniable Advantage. My name is Steve Stauning and I’m your host. Today we are talking about the customer experience, how to wow every single customer every single time.

Now let me tell you what to expect today, now this is a fact-based training. This means everything I’m going to show you is based on verifiable facts or studies unless I tell you it’s my opinion. If I say something works or I say something doesn’t work, it’s because we’ve reviewed the tests and studies. We’ve conducted some of our own, or we’ve had clients show success with these, and I’m giving you the results of that research, but know the laws.

Please know the laws, I’m not an attorney, nor do I know all the laws governing your business in your city, your state, your province or your country. Know the laws before implementing anything that I teach you today. “Steve Stauning said” is not a defense. In fact “Steve Stauning said” is not a defense even in my own house.

We are going to break today’s session up into four parts for the live version. We are going to talk about why good customer service even matters. We’ll talk about what good customer service actually means. We’ll talk about how to prevent customer service issues from ever happening in the first place, and then if you fail and if you have an issue, we are going to talk about how to respond issues when you fail or when your customer is being unreasonable.

Let’s dive in with part one. What is good customer service? Why does it matter? Why does good customer service matter? Why should you care? Let’s look at some quick stats. You know what, according to Bain & Company, a customer is four times more likely to defect to a competitor if the problem is service related versus if the problem is price related or product related. Let me repeat that. You are four times more likely to lose a customer over a service issue than a price issue or a product issue. That’s why customer service matters.

According to the book, Leading on the Edge of Chaos, just a 2% increase in customer retention has the same effect as reducing cost by 10%. Think about that. As your business or your industry starts to hit a flat period maybe in 2017, 2018, beyond, whatever, if you’re hitting that flat period and you think you need to cut cost, what if you could increase customer retention by just 2%? It’s the same as cutting cost by 10%.

How about some more stats? You know what, according to Marketing Matrix, the probability of selling to an existing customer is about 70%, the probability of selling to a new prospect is less than 20%. Oh, by the way, for those of you in the car business, this really fits with automotive retail. Did you know that the average car dealer today still closes just about 20% of their traditional ups on the first visit? These are people who they don’t know, who they don’t have a relationship with, who just show up on the lot. They close about 20%. That’s a new prospect.

When they call their database, people who’ve done business with them before, and they set an appointment that shows with that database and they are an average dealer, they are going to close at 67%, again, if they are just an average dealer. Again, the probability of selling to an existing customer is about 70% according to Marketing Matrix, but the probability of selling to a new prospect is less than 20%.

According to Bain & Company, it costs six to seven times more to acquire a new customer than to retain an existing one. Again, if we are watching our cost, we need to work on our current customers, we need to work on customers for life. We’ll talk about that later today. “Steve, you know what, when someone is unhappy, will a customer just tell me they are unhappy?” No, actually they won’t. According to the White House Office of Consumer Affairs, dissatisfied customer is going to tell 9 to 15 other people about their experience, but only 1 out of 26 people who were unhappy will ever complain to you.

In fact, another study showed almost the exact same data. According to 1st Financial Training Services, 96% of unhappy customers don’t complain at all. 96%. Oh, by the way, 91% of these 96% will simply leave and never come back when they have a customer service issue with you. Since they won’t tell us when they are mad, we’ll have to ensure that they are all happy, right? Yes.

In fact, according to TeleFaction Data, customers who rate us on a scale of five, on a scale of one to five who give us a five are six times more likely to buy from us again compared to those who only gave us a 4.8. That is a major difference with only two basis point movement in how they rated us. People who rate us a five are six times more likely to buy from us again versus those who gave us a 4.8.

Oh, by the way, we know ratings matter, right? You’ve read the headlines. Dimensional Research says that 90% of people say, “Online reviews influence their buying decisions.” In fact BrightLocal tells us that 88% of consumers trust online reviews as much as they trust personal recommendations. That’s right. 88% of people will trust what strangers have said about you on online reviews as much as they will trust their own friends about you. So we need happy customers, don’t we? Absolutely, but there is a little bit more.

Go Fish Digital found that just one negative review could equal … just one negative review could equal a loss of 22% of potential customers. Three negative reviews and it’s a potential loss of 59% of potential customers, and four negative reviews and it’s a potential loss of 70% of potential customers. We’ve got to have an always-on customer satisfaction bias about how we do our business.

Let me give a little more data. According to, 78% of consumers have ended a business relationship due to bad service, but here is the kicker. If you give bad service but you resolve it, 70% of those will continue to do business with you if you resolve that complaint, but remember 96% of people who have bad service from you won’t complain. Now 90% of consumers will pay you more to ensure a good customer experience, but just how much more will they pay you? American Express tells us that 67% of consumers will pay 14% more for a great experience.

Let’s do that math, let’s do some car dealer math here. If we are selling an average car for about say $30,000, but we are giving people a great experience, we truly can expect to sell these cars for 14% more. That’s $4200 more on a $30,000 car. That means $4200 more in gross, in profit that we get to draw our commissions from. That’s why a great experience matters.

More than anything else, providing a great customer experience leads to client retention, increased revenue and increased profits. Basically though good customer service, think about it this way, good customer service costs you less and gets you more, so let’s figure out how to wow them.

You’ve probably heard that the customer is always right. I like to follow this Twitter account, it’s kind of fun, it’s called The Last Blockbuster, and they tweeted this recently. They tweeted that, “It’s statistically impossible for the customer to always be right.” They are right. Of course, Blockbusters aren’t doing so well, we know that, but the customer is not always right, but they are always the customer. They don’t have to be right. See, they are your boss’ boss. They pay the bills.

Now for some of you, you know that I do a lot of work in the car business, I’ve been in the car business a long time, and I’ve been to dealerships, probably more than 2 dozen dealerships that have this posted in their dealership because it’s a famous quote from a Sales Vice President at Studebaker, that he said in 1941. This quote goes up on lots of dealerships, boardrooms, in their hallways, in their employee lounges.

It says this, “A customer is the most important visit on our premises. He is not dependent on us, we are dependent on him. He is not an interruption in our work, he is the purpose of it. He is not an outsider in our business, he is part of it. We are not doing him a favor by serving him, he is doing us a favor by giving us an opportunity to do so.” Folks, these are words to live by, but they are just words, we’ve got to put them into action.