I am a terrible “bah humbug!” when it comes to “trick or treat” but I do take a keen interest in Ghosts.
The Ghosts I mean, to clarify, are clients who don’t ever complain but just disappear. We may have just have started doing business with them and they suddenly fly away to a competitor, even back to their old supplier. Or worse, they are stalwart clients who have been quietly using our products or services for ages and now they don’t. If we ever think to challenge them they tell us things like their priorities have changed or they have “outgrown us”. In all honesty, we know for the most part those excuses are in the same category as “the cheque’s in the post”; a form of words that we cannot sensibly refute but everybody knows is a “business lie”.
So why have they gone? First of all, do you care? What is the cost to you if they go? Well, let’s do the calculation. How many have you had leave you over the last 12 months? And how much does it cost to replace a new client? Now most businesses cannot answer that question, so let’s change that to how much would you be prepared to pay if someone could just give you a decent client? Chances are the real cost of acquiring a client is way above that, but let’s use that if we need to for our calculation. How much, therefore, would it cost to replace all your ghosts over 12 months? That could be a large number.
Now the big number. How much profit would you have gained from each of those ghosts had they not left you?
What, therefore, is the total cost of Ghosts to you over the past twelve months? Bear in mind, this is a real number. This is money that should have been in your bank and now is not. This is a cost to the business just to stay still. Whatever growth figure you had in mind for the year, you have to add this figure to it in order to stay on track.
If you knew you had that large cost in say, operations due to wastage, or in accounting due to excessive bank charges, would you be keen to reduce, minimise, even eradicate it? No doubt this a number big enough to care about. Particularly when you think that the competition has got your money instead; the client is still buying, just not from you!
So how did the Ghost come about? What department or function was responsible for scaring them to death, driving them away, making them feel they were not valued? Your organisation did it to them. But who and how? Anybody who speaks with your brand, verbally or in writing, could easily create a ghost. Inadequate communication, bad customer service, poor customer experience, lack of good up-sellling or cross-selling, all could be the root cause of your quietly growing, and increasingly expensive, graveyard.
Time to stop the plague of Ghosts? Time to investigate with your Sandler trainer what can be done? It would cost some money, time and change throughout your organisation to fix the issues, but would it be worth it?