Making sure your projects satisfy your customers is an important part of doing business. Customers today have high expectations. They want successful projects to be delivered on time and within budget. While experience can help make sure that happens, getting there can be a struggle – and the costs of missing those expectations can be severe.
The costs of unsatisfied customers
Dissatisfaction jeopardizes the lifetime value of your customers, and that matters because acquiring new customers is a costly business. Customer acquisition costs are typically five times as high as retention costs. You have advertising and account handling to pay for, and that figure doesn’t even include the uncertain nature of the bidding process. With that in mind, it should come as no surprise that repeat customers are an average of 7.5 times more valuable than one-time customers.
To quantify that difference, imagine that the lifetime value of a customer is equal to the average life expectancy of the customer’s business, multiplied by the number of purchases per year they make, times the average revenue of their projects. In this case, assuming a conservative five-year life expectancy, 0.5 projects per year and an average value of $200,000 per project, you find that the average long-term value of a repeat customer is around $500,000. That’s half a million in revenue you could lose from an unhappy customer. Don’t let it happen to you.
Here are five steps you can take to make sure your projects satisfy your customers every time.
1. Use a template
Leveraging a template simplifies that process. For a service-oriented business, having a project template increases the accuracy of your initial estimates by making it easier to identify hidden costs, and it can prepare you for those costs that are often overlooked in the initial bidding. In the hands of trusted advisor, the value of using a template is compounded, helping you to deliver a more mature product than many of your competitors.
2. Leverage historical data
Once you have applied your template, leverage historical data to improve the accuracy of your bid even more. Look at where your margins were lost in similar projects. Variances between the planned costs and your actual expenses can give you powerful clues as to where you might need to boost your figures to ensure that the project in question ends up being just as profitable as you planned.
3. Improve collaboration
Before you submit your bid, you should also collaborate across departments. Using a modern consumer-grade social collaboration tool that captures conversations, files, and data and provides contextualized suggestions, you can make it easier to understand what might have happened in past projects to impact customer satisfaction. By talking about the proposed project with people who have worked on similar actions, you can gain some clues as to how you can satisfy your customer’s needs and avoid common pitfalls.
4. Automatically capture billables
Next, look at ways to automatically track and apply billables. From hours to expenses, having a tool that seamlessly captures those costs will help you make sure your consultants never miss out on getting paid for the work they complete. Your invoices will be more precise. The virtual paper trail generated by that type of integrated solution not only provides a trace that will be useful in the event of a billing dispute, but can also help make sure that project phases and deliverables are appropriately managed, fulfilled, and billed.
5. Update your template regularly
Finally, make sure you are updating your template regularly. As you complete projects, you will be generating quantified proof of best practices, average costs, and commonly overlooked expenses – some of which you may have missed when you developed the template initially. Update your template as you realize these extras expenses. Your customers will be happier, and so will your employees and contractors.
To find out more about how you can ensure consistent customer satisfaction, check out our on-demand Webinar on Delivering Client Value Profitably.