The Leaky Bucket Analogy - ISSA



1019175100965 The Leaky Bucket Theory,The ARCSI VersionPresented by Industry ExpertsAlonzo Adams, Busy Bee Cleaning Company Kathy Gage, Marvelous Maids Tom Stewart, Castle Keepers David Kiser, Champagne Services All businesses have experienced losing their loyal customers.? Some businesses would lose them because of bad customer service or they were not completely satisfied with their product or service. The leaky bucket theory is often used by marketers to explain this phenomenon.In marketing, the leaky bucket theory is an analogy used in describing how a business loses its customers.? In this theory, a business is like a bucket being filled with water but with holes in it.? Thus the water in the bucket just goes out through the holes.? Naturally, when there are holes, even if water is continuously poured into the bucket, it would not be filled up.? The water being poured into the leaky bucket represents the new customers of the business.? The water inside the bucket represents the existing customers, while the holes in the bucket represent the reasons why they leave or in other words, the problems in the company that make the customers leave.? There could be many reasons why they leave, thus, many holes are in your bucket, so to speak.?? The leaking water coming out of the holes are the lost customers.? In order for the business to survive, businesses have two options.? First, the company can choose to fix the holes in the leaky bucket to prevent customers from leaving.? Alternatively, a business can attract new customers (filling up the bucket with additional water) by promoting it.? Of course, this can be done at the same time.As in a leaky bucket, it would be cheaper to first plug the holes in the bucket before you deal start pouring in more water.? Fixing the leakage should be the number one priority.?? In order for the business to be successful, there is a need to retain customers by giving excellent customer service and by also providing great value for their service.? The business already has its captured market, it only has to ensure that they would continue to be its customers.? Once these customers are satisfied with the firm’s services, they will stick like Velcro.? People are creatures of habit, and as long as a business has consistently satisfied a customer, its competitors would be hard pressed to grab these loyal customers away.Finding new customers is much more difficult and expensive if you have not resolved on retaining your old customers first.? Putting in more water into a bucket full of holes and expecting it to be filled up to the brim would entail all the works needed to introduce your product into the market once again.? The smart move is to fix first the leaks, then find more water to fill your bucket.Business owners should constantly check their bucket: does it have a few holes in it? Are there areas within your business that might be a potential threat in losing your customers?? Owners should always be on their toes to fix these holes.?? Do not leave these problems unattended and unsolved.??It is important that these be fixed immediately. Otherwise, your business would lose these customers, probably for good.The Leaky Bucket Analogy Think of your company as a giant bucket of water. The water in your bucket represents your customers—the lifeblood of your business. Every drop of water that leaks out of your bucket is a lost customer and lost sales, including all future revenue. Ouch!If your company is like a leaky bucket—and every business is to some degree—then it is paramount to your survival that you continuously fill your bucket with more water. After all, no water, no business!So the question is: How leaky is your bucket? How many holes does your bucket have that are letting your customers constantly pour out? Be honest—does your bucket simply have a few leaks around the seams that let customers occasionally seep out, or is it riddled it with holes, and customers are gushing out from every one of them?The guess is that your bucket has more holes than you even know about. But don’t be too embarrassed; most businesses do. The ARCSI is proud to present industry experts with the four "R's". 1) Retention 2) Recovery 3) Resurrection 4) Release 1) Client Retention StrategyClient Retention is not only important but vital to almost every businessYou must realize that it’s far more expensive to find new customers than keep existing ones, and therefore it has become absolutely mandatory to invest in existing client relationships and ensure that they keep growing in a mutually-beneficial manner.Question? Retaining your clients is really important right? … but am I focused on it?? Am I successful at it?The benefits...1. Repeat Business 2. Opportunity to up sale?3. Receive Referrals4. Getting off on the right start?Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship.Customer retention starts with the pre-saleYour sales team must be clear and concise about what you can and cannot do. Never over problem and agree to unfavorable terms. Your new client will hold to your promiseHave the proper material outing what the expectations are from you & client (Policies & Procedures)Your sales person is vital in this process. They must be able to ask the right questions to identify is this the right client for you as well as see if you are the right service for themIf they fit your companies customer profile. their likes and dislike must be properly documented on a work orderAfter we have agree on the price and terms of the service we follow up with an email confirmation that contains the following....Date of ServiceTime WindowInitial Cleaning PriceRecurring Cleaning PriceService DescriptionPoliciesAgreement to be signed?We call the day before to confirm the appointment and to verify they received the email confirmation.The agreement part of the service confirmation must be signed to initiate service. The signed agreement is attached to their customer file-this prevents a lot of confusion.Once the buying decision has been made and the customer has been acquired, a different process begins: relationship maintenance. Customer retention techniques can help ensure that the customer stays loyal to the brand and is not lured away by competitors.Increase frequency and regularity of customer touchImplement faithful follow upProactively stay in touchWe use Newsletter to provide education & instruction to our clientsClient?Retention?needs to be an essential and vital part of your business strategy, you need to commit to client retention. ?You ?need a well-oiled process and plan to ensure it actually happens. Automate the process, make it more efficient and create ways to effectively accomplish it. For Retention-specific questions please email Alonzo at aadams@ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________2) Recovery from a Service ErrorWritten Customer Service Philosophy – Feedback is a giftBreakage – We used to lose more customers over breakage than over quality. Breakage Customer Service steps go into placeTeam leaves breakage formTeam does extra work as their apology – based on value of the breakageDepending on the severity, the office goes to the homeOffice calls the customer as soon as the team lets them know and they said the team felt so bad they did __________ (extra work) as their apologyIf we can repair the item, the office schedules the repair, notifies the customer, and follows up to see if they were satisfiedIf not repairable, the office suggests the customer purchase a replacement and deduct from a future cleaning.The office documents the breakage in the employee (used as an employee measure and in the customer file)Quality – Quality Customer Service Steps go into placeThe office calls the customerWe start the call by saying we are so sorry that you had some concerns about your cleaning this visit, we appreciate your call to let us know If I know why the quality fail happened…they had a newer employee with them today and we try to check everything, etc.…I let them know. The reason I do this is they have already decided why we didn’t do a good job…that the “girls” were in a hurry or they don’t care, etc. So I’d rather tell them why and then they know it wasn’t because we were in a hurry and we don’t care.We offer one of four options depending on the circumstances:a redoa discountto come see the home and then we sometimes offer a free clean a more experienced team (if they have a newer team)We mark the customer’s work order for future visits that this is a particular concern for this client and we have a line where the team leader initials that they checked that area each visit so that we don’t make the same mistake twice.We then track which option they took and follow up.Redo – If the customer is home, the team apologizes and fixes the work. The office then calls to see if they were satisfied with the redo. We do not necessarily send the same team back because we route by geography and we pay our teams for the redo.Discount – The paperwork has a special note to the team that the customer has a quality discount this visit and to pay special attention to that area. The office then calls to see if they were satisfied.Free Clean – Same as discount (usually only given if the office sees the home)New Team – We mark the paperwork as a SAVE House. We have special paperwork that goes out with these cleanings during that time that reminds the team. We follow up after the next three visits. The team splits a $50 bonus if the customer is happy and keeps our service after three visits. Liz Trotter’s company, American Maid, takes this to another level by having different action steps that the team takes as well such as choosing from a list of special items they can do for this customer like take a cute picture of their pet, doing an additional service for free, leaving a nice card, etc.For Recovery specific questions please email Kathy at kathy@ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________3) Resurrecting Past ClientsClassify lost clients into one of three categoriesNon-Controllable Loss (NCL)DeathMoving out of your service areaMoving into assisted living, long term care, jail, or some other arrangement where your services would not be applicableControllable (CL)All client losses that are not classified as non-controllable“Can’t afford service” is controllable. We constantly priority how we want to spend our money, it’s our job to create enough value to be deemed indispensable. Don’t accept excusesYour Choice (Fired, or F)Bad DebtHostileUnderpriced and will not accept rate increase or reduction in serviceShould be a very small part of your lossesFocus resurrecting efforts on our Controllable Loses (CL)Categorize CLs by reason and by prospects of resurrectingIt’s easier to get a client back who is having temporary financial problems then it is one who fired you for alleged theft.When client informs you that they are leaving service, find out how they intend to clean house in futureHire another companyHire independentClean themselvesKeep CLs on all correspondence that goes to active clientsNewsletterHoliday CardsHave a plan to reach out to CLs on regular basis – I like quarterlyCRMTickler fileUse different mediumsEmailDirect mailPhoneHave different messagesDiscountsYour old cleaner has an opening in her scheduleCustomize message to clientConsider bill rate when prospecting old clientsBringing back an old client can be a great time to increase rate, especially if they quit because of quality or poor service (aka a “crawl back”)Can entice old clients to come back by announcing a rate increase for new clients but if you resume service now you can keep your old rateFor Resurrection specific questions please email Tom at tom@castle- ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________4) Releasing a Customer The fish you have may not be the fish you really want 304800086995It sounds crazy. You spend a lot of money and energy attracting prospects to do business with your company. And here we are getting ready to tell you why and how you should release customers and allow them to be served by your competition. This one activity can be a liberating experience allowing you to focus on making your business thrive. Why Release a Customer Customers play a part in your company success. You provide a service or a product and they provide consideration financially or otherwise for your service. To make your business run smoothly and efficiently you set in place specific rules and processes. Some customers may try to “buck the system”. These customers can be disruptive and threatening to the success of your business. Much like a huge fish on your line that ends up being real trouble. Other customers may have circumstances that have made it tough to honor their end of the deal. Never forget that without customers you do not have a business. To that end, consider the customers situation individually before you pull the trigger releasing them. Is it something they can fix or is it a situation where you may refer their business to someone else? Reasons to Release a Customer 1. Complain about pricing of the service 2. Demanding – expecting immediate attention for trivial issues 3. Do not honor payment terms – always forgetting a check, 4. Miss deadlines for payments, information or feedback updates 5. Managing your employees work 6. Home is not prepared for cleaning – clutter, hoarding 7. Unsanitary or unsafe home environment 8. Unbecoming behavior – verbal or physical abuse, illegal activity 9. Time taxer – always calling, calling you personally and /or after hours, nitpicker, unreasonable It may be that you have a perspective of a customer from your team that paints a negative picture. Find out for yourself. Do not exclusively rely on your employees. Customers are valuable and there may be some reasonable misunderstanding. Conduct your own assessment that includes at least one conversation with the customer on the phone or in person. Sadly, there are many customers who have The Assessment Invest the time to find the truth about the customer. They could have lost a loved one or just their credit card and are having a temporary moment. A kind reminder might be a better solution. Communicating directly with the customer gives you the opportunity to listen and also explain what your perspective and pain might is in caring for their home. Some questions to consider as part of an assessment are: 1. Is there a pattern with this customer? 2. When was the last time this or other issues occurred with this customer? 3. How many times have you been involved in issues with this customer personally? 4. Is the customer a profitable account? 5. Has the customer been reasonable in resolving issues in the past? 6. Do you know other providers who have challenges caring for the customer? 7. How long have they been a customer? 8. Are there family / friends who contribute to the problem? 9. Is there something you discovered about your company that needs to be fixed or refined? 10. Is there a workable solution to consider? Fixing It By all means fixing the problem is the best solution if possible. It maintains good will with the customer and builds stronger loyalty if they see that you humbly listened and fixed something that irritated them to make them feel more valued as a customer. So, some assessments may transform the situation to something better than terminating the customer. When that is not possible and the customer is not reasonable or worth saving for reasons we have discussed then you must release them. How? Customer Release Policies Having policies make releasing a customer an easier decision. You have made the decision in advance of the situation. Here are some principles related to good Customer Release Policies. 1. Three strikes policy regarding payment, lockouts or other issues. 2. Zero tolerance regarding abuse, safety or issues that present a threat to employees. 3. Only you or someone you designate should be authorized to release a customer. Identify them specifically. 4. Implement a process to insure not doing business with this person in the future. This might include notes in a database, asking all prospects if they have ever been a customer in the past or maybe creating a list of people and addresses that are undesirable. Sometimes the fish you have is not the fish you really want. How to Release a Customer Resolve to address the issue boldly and confidently because you realize you are protecting your business and the people who work in it. Once you have made the decision call or see the customer in person. Sending a letter or email is an option also. Consider referring the customer to someone else possibly more suitable to meet their needs. Below is an example of a Customer Release Letter. Dear _______________, Champion Cleaning Services prides itself on providing great service and a great experience for you and your family. On a rare occasion we find the relationship is not working. Sadly, we have discerned, after conferring with our supervisors and staff, that we cannot meet your needs. After careful consideration we will not be returning to your home. If you have any questions please contact me directly at this number 555-555-1234. Thank you for your business and we wish you all the best. Sincerely, John Jansan The Liberation of Releasing a Customer The fact is some customers may not help your business. Like a tree needs pruning, customers need to be assessed on occasion if there are reasons to believe they are not contributing to the success of your business. Sometimes fishermen hook what they believe to be the fish of their dreams. Then after some time what appeared at first to be so great turns into a nightmare. Customers can be very much like that big fish. Cutting the line can allow your business to focus on more appropriate customers. The take away for you is to remember that you are in control. You have a valuable service to offer. Many people appreciate it. It is not right for you and your business to spend disproportionate time, money and energy working to please people who will never be truly appreciative or respectful of what they have in your service. Releasing them allows you to better care for the customers who do. It also shows you respect the business and the employees who also work with you to provide great service.For Release specific questions please email David at davidk@ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download