These two things are crucial when creating a business. How viable is your business, and how are you going to treat your customers. Both determine how long your business is going to be around and how well they are going to survive. You can have a killer business model, but if you have abysmal customer service you are going to fail. No one wants to do business with a company that doesn’t care or seemingly hates their customers. The same goes for your business model. You can have the best customer service in the world but if your business model ends up negatively impacting your customers they won’t be your customers for long.

What brought about this as a topic was my own recent dealings with a little company known as Citi. Now you might be thinking this is just me complaining, but trust me, I have some good points on building your own business strategy, so please. Read on.

I have been a faithful customer for years. Always paid my bill on time, kept myself in good standing with them and just recently I received a notice that they are doubling my APR for no reason. When I called their customer service to ask why I was being punished for being a good customer their reply was “You’re not being punished this is just the price of doing business with us.” What?

I was furious. I couldn’t believe that was the scripting they were given. Not only are they punishing me for being a good customer, but when I call to find out I get slapped in the face too? So what did I do? I canceled. I have a great credit rating, I don’t need to stay with a company who treats me like crap. And that’s where I, as a consumer, have the power.

Currently I would rate Citi’s customer service as poor, so there is no reason for me as a customer to want to do business with them. Their “new” business model to punish their good customers by making them pay much much more (double!) isn’t helping them get into any good graces either. So how is this going to help them as a business? Well, so far they have at least one loyal, good customer they have angered and who will never be using their services again, and during the times of economic hardship why would you want to punish the customers who pay their bills on time? The ones who pay every month and actually like having you as a service provider… are they really who you should be alienating right now?

Economic times aside as a business you should want to grow your customer base, not shrink it by sending them to your competitor (which is what I did). What if instead of increasing my APR they lowered it? Well instead of loosing a customer they would have gained one for life! Imagine the difference in scenarios?

“Dear Mr.Peters, we know that during this time of economic crisis times are hard for everyone. As a valued, loyal customer we would like to help you out by lowering your APR 1.5%. We have enjoyed your business and hope it continues.” Holy cow what a difference that makes. They would have a life long customer instead of one who is now leaving. Even that small of a percent make a big difference in your customers eyes.

What about you? What are you doing? Does your business model hurt or benefit your loyal customers? Does you current way of doing business foster or fester the relation between you and your customer base? Do you have rewards programs or give a better deal to your stellar customers? Does your customer service have a great attitude when calling or does it sound callow and uncaring? How does it compare to your competitors?

Now more than ever you are going to have to fight for your customers. Market harder, and smarter than your competition. Give better perks to your loyal customers, and foster those relationships even more. The old adage is that 20% of your customers give you 80% of your business, do you really want to alienate that 20% and send them to the open arms of your competition?

When building your business model keep your loyal customers in mind. Think about how you’re going to keep them loyal. When creating your customer service plan, keep in mind how you want to be treated by the companies you call. Remember this because your customers hold the power in this relationship by simply being able to go somewhere else.

Thank you for reading,
Josh “Shua” Peters

Image by Striatic

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Tags: busines plan, business, business model, customer service

This entry was posted on Tuesday, January 13th, 2009 at 7:57 pm and is filed under Home. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.