I spend a lot of time here yammering about customer service, particularly regarding thinking and automating it.
There’s a good reason: I can prove the connection to revenue.
Wouldn’t your business like to have more dollars in the cash box this week? Wouldn’t you like to lose fewer customers?
Of course, there’s a story.
A few weeks ago, my son was home for Thanksgiving. He and his brother went to rent a movie for us.
When they arrived at the counter, they are told that my account was “in lockdown”. Is Death Row next? “Lockdown” is an odd word to use with a customer.
Be careful with the lingo you use, as internal lingo leaks into your customers’ world. Sometimes it isn’t the kind of thing that you want your customers to hear.
One of my boys has his own account, so he checked it out and told me the story when they got home. I dug around and found the movie right where I’d left it: not at the movie place.
So I head up to the movie store to return the DVD. It turns out that I’ve had the movie for 26 days on a three day rental. Definitely my mistake.
The problem is that the late fee really isn’t a good revenue source. If it was, there wouldn’t be a Netflix. Think about it. People prefer waiting for movies by mail to paying late fees.
I asked the clerk why I didn’t get a call when the movie wasn’t returned on time. Historically, they call after the movie is late, but not this time.
Sometimes I get an auto-generated postcard or letter when a movie is late. This time, there was no call, no letter, no postcard, nor a visit from the Late Movie Fairy.
When I asked, the clerk said corporate had made some changes. They were no longer allowed to make calls. Instead, the calls are now made using an automated corporate system.
The clerk continued, “…but it doesn’t work very well”, saying that lots of people are not getting calls, or not getting them in a timely fashion.
I can relate.
When it’s a political candidate’s automated service doing a push poll to ask if I’m against the proposed tax on al dente pasta, I’ll pass. When it’s a business calling me to help me be a better customer, make the call. Please.
I said I’d prove that this is a revenue issue, so let’s look at the cost of a late movie.
I had the movie for 26 days (yeesh). That says several things.
First of all, I didn’t return to that business for almost a month. If you own a movie shop, you want me in there more often than that. When I return a movie, I might be tempted to rent another. Four bucks is four bucks, no matter what provoked me to spend it.
That’s potential revenue loss number one.
My late fee was $12 & change for 23 days of lateness. That’s a hair short of eight full rental revenue opportunities that were missed. If it’s a hot movie, that’s $32.
And that’s from a single DVD.
Imagine if they have just 10 late rentals of hot movies per week. IE: Rentals that are out of stock as a result. Maybe the customer will rent another, maybe not.
10 lost rentals a week is $40. Times 52 weeks is $2080 per year. What if it’s 100 per week? That’s real money: $20800.
I wonder why these businesses don’t send text messages 2-3-4 hours before closing to remind people about the almost-late movie that’s due. Text messages are easy to automate and can be sent using email (hint: ask permission first).
If Butterball thinks it’s worthwhile to send text messages to remind you to thaw your turkey on time (who hasn’t forgotten to do that at least once?), it seems like a natural for movie rentals – and probably other businesses as well.
The long-term reward in revenue and customer retention comes in thinking like the customer and doing for them what makes their lives simpler, more productive and hassle-free. I’ll bet you can find one new way a month (at least) to do just that.
Want to learn more about Mark or ask him to write about a business, operations or marketing problem? See Mark’s site or contact him at [email protected].