Welcome to Customer Retention 101

Feb. 1, 2012
How do you feel when you get a phone call and there's that hesitation before the voice comes on, or you are asked to hold for an incoming call you never

How do you feel when you get a phone call and there's that hesitation before the voice comes on, or you are asked to hold for an incoming call you never wanted? And then some person you never met before asks you how you are, as if they remotely care. If you're like me, you immediately get defensive and the last thing you want to do is tell them how you are or listen to what they have to say.

There's a certain sales “vibe” if you will that you can always feel when somebody is trying to sell you something that you probably don't want or for which you have expressed no interest. With all due respect to sales people, and I know it's not an easy job, but nobody likes the feeling of being sold. Which made me immediately intrigued talking to Mark Redwine of Pioneer Equipment Rental & Supply, the subject of this issue's cover story. Mark is the cousin of owner John Redwine, and he is in charge of new equipment sales. He told me that he, a former schoolteacher, is not a sales “type” at all, that he's really not a salesman. He just tries to understand the customers' needs and see if there's a fit. My guess is he's probably pretty successful.

I was also intrigued by the philosophies of Mark Denny, Pioneer's industrial accounts manager. Denny pointed out to me, and I elaborate about this in the article, that he read a study that indicated that 96 percent of the people that stop doing business with a company don't tell them why. They just go away; they don't tell the company there's a problem. Studies show that of those that do complain, if the company makes a point of addressing the issue and resolving it to their satisfaction, they would probably remain as a customer and then tell 12 people about how the company made a mistake and then corrected it. I know I certainly tend to react that way and have great respect for anybody I do business with that offers to correct a mistake.

The conversation with Denny reminded me of one of the first rental companies I ever visited when I started with RER. I was hanging out at the counter talking with one of the inside sales coordinators when I noticed another coordinator with a stack of rental contracts calling people on the phone. I overheard him asking customers how their recent rental experience went and if they were satisfied with the equipment and the service the rental company provided.

After what seemed like a couple of fairly routine conversations, he ran into a complaint. The customer was unhappy about something. Listening politely, the counter person then asked a question. I don't recall the details, but in essence he said, “I wish you had called, I could have easily helped you on the phone.”

The conversation continued briefly and then the coordinator said, “Look, here's what I'll do. I'll give you the choice — I can refund your money right now, or we can just hold on to it and your next rental is on us.” The customer apparently seemed happy with this exchange and the coordinator ended the call by saying this: “But I want you to promise me one thing. If you have any problem at all with that equipment, you call me immediately. Ask for me and I'll make absolutely sure that machine works right for you.”

They then told me that that particular counter worker made those calls regularly. Whenever he had a few free minutes, usually after lunch, he would call the previous day's or previous few days' customers and ask how the rental went, how the machine performed and if there was anything else the company could do for them. The manager told me that since they began that process, the company's rate of repeat customers had gone up. I don't recall the percentage, but I remember it was substantial.

I remember asking if they were always so quick to offer a refund and he told me refund offers were rarely accepted. “They just want us to hear and understand their complaint,” he said.

I didn't get to hang out for a long time at Pioneer's counters or have extended conversations with its customers but judging by the company's rate of growth since it was founded in 1998, and how it continued to prosper through the recent recession, I'd say its customer-retention rates must rank among the industry's best. There is a lot to like about Pioneer and the way it treats customers certainly appears to be one of them.