Categories : Coaching Communication Customer Service Management Measurement Relationship Building Retention Team Building Training


When a rural telephone company loses a customer, it does not lose one sale but a lifetime opportunity of profitability with that individual.

What could that customer have been worth?  To determine the average lifetime value of customers, estimate how much they will spend with your company on an annual basis and multiply it by the number of years they could potentially use your products and services.  For example, if an average customer spends $100 a month, 12 months a year for 10 years, their average lifetime value is $12,000.

Don’t stop there.  Next, factor in how much your customers could potentially increase their spending each year because they’re thrilled with your great customer service and expansion of products you make available.  Keep going!  Now add on the value of all the new customers that your loyal customers will refer to your telco.

I hope by now you see just how valuable each and every customer is.  And here’s one more thing to think about.  Increasing customer retention as little as five percent can translate into as much as a 100 percent increase in profitability.  It’s important for all employees in your telco to understand the lifetime value of their customers.  Then they will see the sense in building relationships with the very people who keep the company in business.

But let’s say your telco takes the easy way out and simply replaces departing customers with new ones.  That is actually the more difficult path to choose.  It costs more to attract new customers that it does to keep the old ones.  It costs even more to get new customers to the same level of profitability as the ones that fled to the competition.

According to Richard F. Gerson, author of “Beyond Customer Service: Keeping Customers for Life,” customer service is governed by the rule of 10s:  if it costs $10,000 to get a new customer, it takes only 10 seconds to lose him or her and 10 years for the customer to get over it.

Here are some tips on creating a loyalty-focused culture within your rural telco.

  • Establish a set of core customer service values that are expected of every employee in the company, regardless of their job description.
  • Customer loyalty begins in the human resources department.  HR personnel are front-line employees who create powerful impressions on recruits and new staff members.  They must focus on building loyalty with these individuals during every step of the application and interview process.
  • Measure customer service as the most important aspect of an employee’s job performance.  Employees at all levels of the organization need to know that their customer service skills will be evaluated and that great service will be rewarded.  If employee evaluations place more emphasis on productivity than customer service, the quality of service will diminish.

Keeping accurate, up-to-date records on your customers is vital to building customer loyalty.  Employees need to have easy access to this information so they can find out if they’re speaking with a new or existing customer.  If they’re dealing with an existing customer, they can quickly review the files to determine whether this customer should receive preferential treatment.

Try these suggestions to keep track of your customers:

  • Find out as much as you can about every new customer and record this information in your customer data files.  Be sure it’s updated with every contact.
  • Check your sales records so see how many regular customers you have.  If customers are not coming back, then you probably have a serious service problem.
  • Review  your customer complaint records.  Is there a pattern?  Were complaints resolved quickly and was there follow-up with your most valued customers?  Were the customers satisfied with the results?

There’s another reason to have loyal customers.  They often act as a sales team for your company.  Customers unhappy with your service often won’t purchase from you again.  They’ll tell others to stop doing business with you and that group can wreak havoc unbeknownst to you.  However, if you have reasonably priced products and good service, customers will do repeat business with you.  Plus, they will tell others how great you are.

Positive word-of-mouth advertising is a powerful marketing tool.  Customers who spread good news about your company and your products and services are the best sales reps you can have.  They are not employees and there is nothing in it for them to sell your products.  They’re perceived as having higher credibility than paid sales reps.

So how do you turn your customers into sales reps for your company?  That’s easy – do the unexpected.  Look for ways to surprise and delight each customer.  Here are five ways to exceed customer expectations.

  • If you have an automated phone system, be sure it’s easy for customers to navigate and always have an option to talk to a live person.  Call in as if you were a customer who knew nothing about your company.  Experience your automated phone system first hand.
  • Don’t end a call until you have asked the customer, “Is there anything else I can do for you today?”  This demonstrates to both you and the customer that all their needs have been met.  This confirming question also gives you an additional opportunity to satisfy your caller.
  • Thank your customers any time they compliment you or your company.  Ask new customers how they learned about your telco and, if possible, send a hand-written thank-you note to the person who referred them.
  • Reward customers for their referrals.  Send a small gift to the customer who sings your praises or refers you new business.  The gift need not be expensive.  It’s the thought that counts.
  • Follow up with your customers when they least expect it.  Call them just to say thank you and tell them how much you appreciate their business.  You can also use these conversations to ask them for suggestions on how you or the company can do a better job of providing service.  Be sure to listen carefully.  They’ll give you great ideas.


David Saxby is president of Measure-X, a Phoenix, Ariz.-based measurement, training and recognition company that specializes in customer service and sales skills training for utilities. He can be reached at 888-644-5499 or via e-mail at Visit the Measure-X Web site at