Case Study: From The Torture Chamber To The Spa
I have told this story to just about everyone that I know, and used it as an example on nearly every training course I have conducted. That total sum is a lot of people that probably won’t go to the first store, and will most likely go to the latter as their number one option. But now enough of the soft stuff - lets look at the numbers:
Store 1
I was prepared to pay $200, but would have gone to 400. Loss to the company - $400 – so what if they have turnover of a ten or twenty million a year?
Not quite – imagine if this happened once a day for other people like me (of which there are many in Singapore)
$400 x 365 = $146,000 – a bigger number, but maybe not that significant in terms of their operating numbers
But wait, there are many wealthy locals and over a quarter million expatriates with lots of disposable income in Singapore, and shopping happens to be one of the top two pastimes (along with eating). Let’s say we multiply the number by ten such experiences a day, and now we are getting past the million mark (1.46 million).
But there is more - that’s just dissatisfied customers. What about the unknown quantity, the people that I have told and that each of the other ten people a day may tell, who will then actually avoid going to that store. Singapore is a small place, and as the word gets around, people will choose to go somewhere else.
Unless this store does something dramatic with their approach to customer service, the numbers will grow exponentially and the owners will start to wonder why all the money that they are spending on advertising and shop fit outs are having such a lean return.
The cost to companies that select unsuitable customer service people and then fail to train them is astronomical – millions and millions of dollars in unrealised revenue that goes into the tills of their competitors.
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