Customer Satisfaction: growing (or shrinking) your business

21 October 2009

Conference in December 3-4 (Thurs-Fri )
Queen’s Park Hotel, Bangkok – skytrain: Phrom Phong

How to lose business. The other day I went into a Yamaha music school near where I live. I wanted to rent one of their piano rooms for about an hour a day and, while I was there, enquire about their music appreciation activities for my young son.

The place was deserted except for the receptionist. She didn’t know anything about room rentals, so she called the owner. After a long discussion, she came back with the price: 300 baht per hour! I was a bit surprised. I only pay 30 baht an hour at a music school in Sukhumvit. After another phone call, she came back saying that she will accept 200 baht. I tried to explain that I wanted to rent a room regularly, so could she give me a monthly price? Still 200 baht/hour. Well, maybe it’s a really good, concert grand piano… So I asked to look at the room. It was the tiniest room imaginable with an almost toneless piano.

I said no thanks and didn’t even bother to ask about the music classes. I’ll never be going back there again…

I couldn’t help wondering… the school was deserted, so it would cost nothing but a few baht for the air-conditioning to let me use the facilities. The problem that most schools, restaurants, internet cafés and similar businesses have is to get customer traffic. Surely, one satisfied customer – even if he doesn’t buy much – is better than no customers at all? Customers bring customers, and eventually a growth in business.

I had a similar experience with Cabbages & Condoms. I recommend this restaurant highly – not only is the food and ambience really good, it’s part of the PDA and supports its community development efforts.

I was president of a Toastmasters club. We wanted to use one of their private rooms on a quiet evening for about three hours twice a month. There was no charge to use the room, we were just a large party of people coming to eat at the restaurant. Rather than order a buffet at 600 baht per person, we simply ordered a variety of items from the a la carte menu. We spent just over 300 baht pax as a result. It suits most people’s budget and the club blossomed.

But after a few months, the manager of the restaurant approached me, saying that we weren’t spending enough and if we wanted to continue to use the room, we had to order the buffet service.

We tried to negotiate, but in the end we stopped coming to the restaurant and found another venue.

A lot of business was lost. Not only did we bring new customers regularly to the restaurant when business was quiet (we were often the only people there), we also organized inter-club conferences, sometimes bringing 200 people at a time. Cabbages & Condoms was our home. It was ideal for all concerned. And many people who had never heard of the restaurant discovered that it was a great place for their own parties and for inviting their friends for an evening out. All of this disappeared when we left.

Compare this with the Elefin Café. A friend of mine invited me to a small dinner party there. It’s a beautiful wood & glass construction with comfy chairs, fresh coffee beans roasting on the premises and an internet café on the first floor. The food and ambience was excellent and reasonably priced. We had a small private room. I decided to try out the room as a venue for my smaller workshops.

Business multiplied. For six weeks, every Monday, eight people spent the lunch period at the restaurant. We didn’t spend a huge amount (considering that the set lunch only costs 120 baht), but we did also buy coffees and drinks and snacks while we there. And each person subsequently came to visit on other occasions and brought their own friends. One night, there was a birthday party for 12 people.

The experience was so wonderful that the Elefin Café is now my home for small workshops and various meetings. It will also be the home of the Bangkok Debaters Club that I will be launching soon. I will be bringing a lot of business. And many of my guests will bring in further business. It will soon become a busy and popular venue.

All because of one satisfied customer.

The same goes for Thai Language Solutions. I’ve been a satisfied student there for several months now. I actively recommend this school to my friends and customers who attend my Read Thai workshops or purchase my e-book Read Thai in a Day.

I even met a few people who had paid for a year’s lessons at Thai Walen language school, but became so frustrated with the bad service that they chose to pay all over again to go to Thai Language Solutions.

Thai Walen is a fairly successful and aggressively market language school, so they have no trouble in getting new customers who don’t know any better. But the visa department is already wondering why so many Walen students are getting their education visas re-registered to another school.

Many schools (as most businesses) depend on new intake through word-of-mouth recommendations. And nowadays, with so many internet forums, it’s easy even for people who don’t know anybody in the region to get advice about where to go, based on previous customer experiences.

Look after your customers, especially the dissatisfied ones. You don’t know how many friends they have.

Well, we do, actually. Studies have shown that the rule of thumb is as follows: each satisfied customer usually tells about 4 of his friends and colleagues, who tell a total of 2 other people on average.  A dissatisfied customer will tell around 8 people, who will pass on the story to another 8 people in total.

The cost of a dissatisfied customer due to lost business opportunities is staggering.

Please join us at the Understanding Consumer Psychology conference to learn more about how to harness customer power to grow your business.

Click here for more details.

One Response to “Customer Satisfaction: growing (or shrinking) your business”

  1. Precies! He did it again. Bewonder Apple ook bijzonder omdat het ze telkens weer lukt. Tot nu toe geen enkel bedrijf dat weer een echte bedreiging is Click

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