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$10,000 Oranges

$10,000 Oranges

One of the things that makes me annoyed is when you reach out to a company customer support and you get an underpaid, demotivated customer rep that does not care at all and does absolutely nothing to help.

I could tell you about a few of my horror stories, but I am sure you have your own.

Sometimes I wonder if these companies realize how much business they lose because of poor customer service.

A couple of years ago I went to a fruit store for the first time and spent approximately $10 in fruit and vegetables, including some oranges.

This story is a bit long, but please bear with me, it will all make sense at the end.

When I went home, I opened one orange, and to my disappointment, it was dry. I opened two more just to confirm, they were the same!

What is the lifetime value of a customer for a company? Let's think a bit about that.

Let's suppose that a regular customer of a fruit shop spends around $10 in fruit and vegetables per week. If he can retain the customer for 20 years (which is not hard if you sell quality products and provide a good customer experience), this customer lifetime value to this company will be $10,000 ($10 x 50 weeks x 20 years).

Selling a low-quality product (in this case spoiled fruit) to a first-time customer is a recipe to make sure the customer never comes back. Thank you, but no thank you, the oranges left me with a sour mouth.

You don't get a client for life with only a good transaction, but all it takes is a bad first customer experience for you to lose the customer forever.

I mean, these oranges, that cost me less than $2 could represent a potential loss of $10,000 to this company.

Let's assume that I decided to go back to the store and complain about the spoiled oranges, now imagine that the rep that received my complain would say "I am sorry sir, there is nothing I can do."

I would never come back to that store again and I would tell about it to all my friends.

Can you imagine losing $10,000 just because of some dry oranges and a careless customer rep?

Now, imagine that the rep would say "I am truly sorry that your oranges were dry, let me get you a new bag or oranges, and please also accept this pineapple as a way to compensate for the trouble caused."

That would change everything, wouldn't it?

Now, not only I would come back, but I would tell about this positive experience to all my friends.

And let's suppose that 4 of my friends become customers, have a similar experience and they also bring 4 new customers each. This way the store would have gained 21 new customers (me + 4 friends + 4 friends of each friend which makes 16, 1 + 4 + 16 = 21)

So if each one of the new customer's lifetime value is $10,000, that represents $210,000 over the lifetime of these customers to this fruit store.

Do you remember how everything started with some spoiled oranges? Impressive isn't it?

At The Fabric Hut, we know that we are not perfect and things don't always turn out as we expected, but we always listen to our customers and try to do our best to make them happy.

I wish you to be very, very happy today.

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