The Road Not Taken – Robert Frost
Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;
Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,
And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.
I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
If you came to a crotch in the road and had to choose between the safe road and the dangerous one, which would you choose?
As a business owner, you know the hardships in choosing the path less traveled.
You also know the treasures if you can survive.
The road less traveled can also be used in complaint management.
Every business has a rule in complaint management.
They try to fix the problem, within corporate policies.
If it’s outside of the policy, many apologize but offer nothing further, accepting an unresolved pissed-off customer is a lost customer.
Do you know the Lifetime Value of your customer?
Imagine all your customers had a number stamped on their foreheads when they interacted with your employees.
The number would be the amount of sales influence they have on your business.
For a hair salon, that number could be $2,700,000.
Would you treat a customer complaint differently knowing they have the potential to lower your sales over the next 20 years by millions of dollars?
Lifetime value is a combination of future spending plus influence.
An average salon customer spends $100 per visit.
She makes 9 visits per year.
She goes alone.
Over 20 years, not accounting for inflation, she will spend $18,000.
Then you factor in her influence. She has friends and a social media account.
Anthropologist and Evolutionary Psychologist, Robin Dunbar, theorizes we have about 150 meaningful and stable relationships at one time.
He calls this Dunbar’s Number.
The average Facebook user has 338 “friends”.
Using Dunbar’s number as the potential for negative influence, the upset customer could convince 150 of her friends to never buy from you, or $2.7 million in lost sales.
Even on the low side, if she convinces her closest friends to banish you from their lives, you would lose $108,000 ($18,000 x 5 friends plus her)
If you knew she was an online influencer with a million followers, you would do anything to avoid the criticism.
Why wouldn’t all businesses treat all clients with that same intention?
Great businesses do.
But things happen and making the right decision is like that crotch in the road.
Our judgment clouds as our ego sprays nonsense in the air.
Imagine Linda books an appointment at your hair salon.
She visits every 6 weeks, never misses an appointment
She has been a regular for 5 years.
And she’s a great tipper.
Today she’s carrying a hair colouring bottle she purchased online.
It has Chinese letters on it.
You have a policy of no outside products.
Her sister uses it and it’s a miracle product that replenishes the colour to the roots as hair grows.
You can’t read the bottle. You don’t know how to apply it and it’s against your policy.
Linda accepts full responsibility, plus she’ll give you a $50 tip if you look the other way.
You ask her to sign a waiver and she happily does.
Two days later, Linda calls in a panic.
Between bursts of tears, she sobs that her hair is falling out.
She blames you.
What do you do?
You went against your better judgment to satisfy a client.
Something went wrong.
You are protected legally with the signed waiver.
This is a question of morality.
Linda’s hair is falling out.
The great business owner doesn’t look at her clients like cash registers. She treats them like friends.
Without a solution, Linda will whine her way onto social media, telling anyone who stops to listen to not buy from you. She won’t mention the waiver.
She will transfer her pain to you, unless you help her.
The bad business owner will remind Linda of her waiver and do nothing.
The good one will listen, comfort her and offer her a free haircut when her hair grows back.
The great one will invite her to the salon. Call her friend who sells wigs and offer to buy it for Linda.
Owning a breakfast restaurant for seven years taught me that 50% of all customer complaints were not our fault.
We had to take responsibility 100% of the time.
And when we didn’t, we lost future opportunities.
Linda ate at our restaurant and returned her meal.
There was a hair on her eggs.
The hair was about a foot long and dyed black.
There were 20 more just like it on her sweater.
We complemented her meal, handed her a $20 gift certificate, and gave her an endless supply of coffee.
She had bigger problems.
I wasn’t going to be the asshole to remind her about them.
Linda buys from you too.
When things go bad, which they will inevitably do, it will be your response that will either destroy or save the relationship.
When you know the lifetime value of your customer, it gets easier to do the right things.
$2.7 million is written on Linda’s bald head.
As a salon owner, I will buy her the most expensive wig to stop her pain.
She’s proven her loyalty to me.
It’s now my turn to do the same.
You can compute the lifetime value of your customer by doing the following:
- Figure out the average spend each customer makes.
- Multiplied by the average times per year they buy. If they buy once every 10 years, use 1/10 or 0.10.
- Multiplied by the amount of people who buy with them (restaurants have an average of 3 people per table). Most times customers buy alone.
- Multiplied by Dunbar’s number, 150.
- Multiplied by 20 years in business.
Clients at my breakfast restaurant had $675,000 tattooed to their forehead. ($15 x 5 visits per year x 3 people per visit x 150 (Dunbar’s number) x 20 years).
A $15 invoice is ordinary. It’s easy to forget the compounding effect of an ordinary response.
Share the number with your staff.
They will act extraordinarily differently by choosing the road less traveled.