A34-Lancaster Farming, Saturday, October 7, 2000
I SEEM TO HAVE LOST
A CUSTOMER
SOMEPLACE!
John Berry
Lehigh Co.
Ag Marketing Agent
How much is one customer
worth? How much does it cost to
lose one customer? More than
you want to know. More than
you can measure in real dollars.
Most people only measure the
dollar loss of a sale, or how much
revenue was lost for the year. Big
mistake. For openers, multiply
that times 20 years. Rats! And
don’t even begin to count the
people they could have recom
mended! Then the real losses
begin to pile up.
Besides telling everyone in
their immediate vicinity, they
will tell all their office, everyone
at the next association meeting,
everyone at the next annual
trade show and convention
and (if you do a real bad job of
recovery or service) report it to
people in the industry media or
local media.
But that’s not the worst, your
competition knows especially
the ones who got your lost busi
ness. And they are celebrating or
doing a war victory dance.
The real cost is the difference
between “cost of lost” and “cost
to fix.” Now measure that
against the cost of servicing, fix
ing, discounting, or replacing the
situation, defect or problem
when you first learned of it.
Seems like a pittance compared
Dairy Farmers ToMeet
At Ronk’s Fire Hall
RONKS (Lancaster Co.) Sam Fisher, dairy
farmer from Brogue, is urging all dairy farmers
and interested parties to attend an important
meeting on Thursday night, Oct. 12 here at the
Ronk’s Fire Hall. The meeting will begin at 7:30
p.m.
Fisher said, “With dairy farmer prices still
holding around the 1979 level, I think it’s time
that dairy farmers demand that the U.S. Con
gress take immediate action to improve milk
prices.”
Arden Tewksbury, manager of the Progressive
Agriculture Organization (Pro Ag), will be the
main speaker for the evening.
Fisher noted that recent meetings in this area
by other organizations “did not offer much hope
to our dairy farmers.”
Tewksbury has longed urged a new pricing
formula for dairy farmers that reflects the aver
age cost of production at the farm level.
The Pro Ag manager said, “Dairy farmers
must realize that they are paying nearly $1.60
per hundredweight to have milk converted to
cheese, so in essence, dairy farmers are covering
a substantial amount of the cheese processor’s
cost.” Why?
Tewksbury said that when the Pennsylvania
Milk Marketing Board established the value of a
gallon of milk in the stores, the established price
covers the milk bottler’s cost.
Tewksbury said, “I think it’s time our dairy
farmers realize what is being done to them.”
Tewksbury concluded by saying, “the whole
sale cheese prices completely collapsed last
week, sending the barrel prices down to $1.03
per pound.”
This means that dairy farmers’ prices will
start to decease even more later this fall.
For information concerning the meeting, call
Sam Fisher, (717) 927-6979.
to the paragraphs above. The
painful part comes when you ask
yourself “How did this happen?
Could I have prevented this from
happening? How can I prevent
this from occurring again?”
Have you ever lost a custom
er? You aren’t alone. It’s not a
one-person battle. It’s not a one
idea solution. You need your spe
cific facts before any ideas can be
formulated. Here’s how to devel
op a plan.
1. Start by switching places
with the customer. Try to use
your stuff in their environment.
Try to call yourself from their of
fice. Wear their shoes, and walk
around in them for a while.
2. Ask your customer brutal
questions ones you don’t want
to hear the answers to.
3. Get your best team of posi
tive thinkers together. Solve or
resolve as a group.
4. Bet big. Identify and know
the big picture, and be willing to
gamble on a (multifaceted) solu
tion that has consensus from the
group.
5. Develop a core-issue base
that could have prevented the
situation from happening. You
only have 10 big, reoccurring
problems. List and dissect them.
Then benchmark the best prac
tice for resolve. But, remember,
prevention is the cheapest med-
icine. That is the biggest clue for
where to start fixing the problem).
6. Get small. Get great little
ideas lots of them eliminate
the dumb ones.
Now is the time to test your soil and apply
Martin’s Limestone to maintain proper soil
pH for maximum nutrient availability
Call your local Martin Limestone
dealer or call Blue Ball, PA
(800) 233-0205
(717) 354-1370
Marlin
LIMESTONE
7. Name your solutions. The
new “Gitomer Greeting” meth
od. Brand your solutions espe
cially the cool ideas that bring
value to the customer.
8. Ask yourself “what’s wow
about this solution or idea?” If
the answer is “nothing,” don’t
bother doing it.
9. Ask the group how this so
lution will prevent future occur
rence of the same problem. If the
answer is “it doesn’t,” don’t
bother doing it.
10. Ask the group how this so
lution will benefit the customer.
If the answer is “it doesn’t,”
don’t bother doing it.
11. Get closer to the custom
er’s “real” life. Meals and ball
games can reveal relevant truths
that “arm’s length” relationships
won’t uncover.
12. How do you do this with
your existing budget? You can’t.
You must have a “win back”
budget. Funds that are ear
marked to fix problems, create
resolve, and build goodwill.
13. When you get back in
thank the customer for dumping
you. Tell them that without the
loss of their business, this innova
tive solution would never have
been possible, and that you are
willing to offer some (major?)
concessions for a retry at the
business using these changes (no
tice I have not apologized or
groveled customers are less in
terested in apology than they are
in great ideas, recoverable ac
tions, and solutions).
Get real: Know the difference
between problem vs. symptom.
Losing customers is a symptom.
Poor service, poor product, late
delivery or back-orders are prob
lems.
Winning back the customer is
a huge victory as well as finan
cial gain. There’s only one person
angry when you get them back
your competition.
FALL AGLIME APPLICATION
Don’t put
Put
Consider Your
Business Stakeholders
A good reputation is one of the
most precious (and most fragile)
possessions of any business. It is
a primary component of your
competitive advantage in the
marketplace. It usually takes
many years to build a solid busi
ness reputation, yet if manage
ment makes poor decisions, an
excellent reputation can be lost
in a fortnight.
All too often, business owners
assume “they are the company,”
and these owners make decisions
in a vacuum without considering
the consequences of their actions
upon others. They fail to realize
one of the keys to building and
maintaining a solid reputation is
to be constantly aware of (and
beholden to) the stakeholders of
your business.
Every business has many sta
keholders. These tire groups of
people who either exert an influ
ence on (or are influenced by) the
decisions you make. There are
two categories of stakeholders:
internal and external.
Internal stakeholders. There
are four potential classes of inter
nal stakeholders: your manage
ment team, your employees, your
investors/owners, and (if incorpo
rated) your board of directors.
External stakeholders. There
are six potential classes of exter
nal stakeholders: your customers,
your suppliers, your creditors,
government, the general public,
and special interest groups.
Whenever you are considering
a decision involving difficult al
ternatives (whether the decision
involves business decisions or
ethical choices), be sure to con
sider your stakeholders as part of
your decision-making process. If
you do not want to negatively
impact your company’s reputa
tion, you should always weigh
the impact of your alternatives
it off.
it on.
upon each of your stakeholder
groups as part of your decision
making process.
This consideration should help
you facilitate sound business and
ethical decisions with the least
negative consequences, provided
you reach a decision having the
strongest positive impact on the
greatest number of stakeholders.
Whenever I am faced with
such decisions, I reflect on how
each of my alternative courses of
action will create (or enhance)
value for each group of my sta
keholders. Suppose I wanted to
expand a manufacturing facility,
increasing production to keep up
with rising demand. I would first
consider alternatives that in
crease value for all of my internal
stakeholders and then look at the
corresponding potential impact
on my external stakeholders.
Suppose a business was con
sidering disposing of hazardous
waste by dumping it in a back
lot. Although management might
initially justify the decision based
upon considerable savings in op
erating costs, ultimate public
awareness of the toxic contami
nation would enrage customers,
the general public and special in
terest groups, significantly tar
nishing the company’s reputa
tion. This would lead to a
barrage of lawsuits from the gov
ernment (for EPA violations),
employees (for health reasons),
and investors (angry about di
minished value).
If you justify decisions based
upon what is best for manage
ment and fail to take your other
stakeholders into account, you
are exposing the company and its
reputation to considerable risk.
When you make the effort to
choose wisely after considering
the consequences on all your sta
keholders and reacting accord
ingly, you will minimize that
risk.