At a recent dinner party I happened to mention shopping at a local independent retail store. My friend Sean angrily remarked he never shopped there.
I was surprised 
because Sean is very loyal to the local business community. He makes a point of shopping in town, even if going to the city or buying online will save him a few bucks. So I asked him to explain.
It goes back to his career. You see, Sean sells cell phones. He’s an independent sales person and works out of his home, rather than a retail location.
His main focus is larger companies that need multiple phones for their employees. However, he also sells to small businesses that only need one or two phones.
Sean gives great customer service
What makes buying a phone from him different is the level of customer service. Sean goes above and beyond for his customers. He helps you decide which phone and which plan is best for you. He’ll deliver the phone to you personally. And if you run into problems, he cuts through the red tape of the corporation and solves it for you.
But there is much more to being a customer of Sean’s. Sean is extremely loyal to his customers. If you buy a cell phone from him, he works hard to help your business succeed. He’ll recommend you to his vast network of contacts. He’ll frequent your business himself. In fact, even if he can save money by going to your competitor, if you’re his customer and they’re not, he’ll buy from you. Every time.
So why was he so mad at this local business?
You see, this local business used to be a customer of his. When his cell phone contract came up, he decided to shop around. This retailer found a cell phone that was a better deal than Sean’s cell phones so he switched.
Seems reasonable; get a better deal, switch suppliers.
So why was Sean so mad?
The guy saved peanuts
First of all, this new phone plan is $3 per month cheaper than Sean’s cell phones. That means this guy is only saving $36 a year.
Compare that to the $150 Sean recently spent in this man’s store. And he probably spent three times that amount annually. That’s a lot of money compared to $36 per year.
He didn’t shop locally
Second, the cell phone provider this guy switched to was selling to him out of head office in Toronto, not even a local competitor. If it had been someone local, Sean could have lived with that. But not shopping locally is a big sin in Sean’s book.
No loyalty to customers
Finally, there’s fair play. By shopping around himself, Sean could buy products much cheaper than from this local retailer. In fact, this guy’s not even the cheapest place in town, never mind compared to the city or online. But Sean purchased from him because he got good customer service from the staff. But mainly, he shopped there because he’s loyal to his customers. But this guy didn’t show the same level of loyalty.
So, the upshot is, this guy has saved himself $36 per year. But he’s lost $500 per year in sales. And I expect I’m not the first person Sean’s told this story to, and I won’t be the last. I know for myself, I feel slightly less inclined to shop at this retailer’s store. I just don’t quite have the same warm fuzzy feeling that I used to.
So, at the end of the day, was it worth it for this guy to switch suppliers? I suspect not.
Andrea J. Stenberg
Great post! I can see Seans point and I admire him for standing behind the “Local Shopping” rule too.
Customer service is major important but sometimes money talks and the lower price wins even if it is only a few dollars. I think it is the way it is sometimes with many. As a long time eBay seller I hear this from others as well selling online. Some buyer’s don’t care about the customer service, caring more for their dollar to last longer. Yet, there are those that thrive on customer service and will remain faithful forever. It’s a tough call in the business world!
Interesting perspective. Sounds like Sean took this personally, while the store was probably just thinking of it as a business decision, without looking at the possible ramifications.
Customer service is worth a lot to me, but some people don’t look past the moment.
Interesting post. looking forward to reading more from you.
Rob
#blog30
Andrea ~
You’re a great storyteller and I know I’m going to enjoy visiting your blog during the 30-day blogging challenge!
I see Sean’s situation as a double-edged sword syndrome. People NEVER fail to complain about lousy customer service, right? And yet the almighty dollar seems to always have the last word. People complain about poor customer service but I wonder how much value they actually place on it sometimes.
Good stuff here!
Melanie
#blog30
Great article Andrea!
It makes so much sense and makes a lot of valid points. Treat your customers right and they’ll keep coming back for more! I am SOO honestly amazed so few businesses actually practice this.
I have a little story of my own, nothing as grand as Seans though:
I’m a stickler for cheaper prices, I’ll drive around shop around and even buy international if it’s cheaper BUT what keeps me coming back to one place isn’t always the lowest price. Where I live in the USA, I have plenty of mailing options: UPS, USPS, FEDEX and there used to be DHL and a few local biz.
Do I use the loca guys…. no. I’d love to, they have neat prices and some decent customer service …. sometimes. But they are sometimes a bit rude.
There is a very small FedEx store hidden away near a main street and you are guaranteed to never know it’s there unless you are looking for it, heck even if you are looking for it you’ll miss it a few times. It’s owned by a older asian lady whose English isn’t exactly up to par. But, she for the most part a) knows that I’m an idiot and have NO clue about mailing anything and b) she’s extremely patient c) is willing to bend the rules enough to keep me very happy.
So, where do I go to send any package? USPS because they are dirt cheap? No, I save that for regular mail. I go to this cool older (not old just older) asian ladies small Fedex store. I know she’ll understand that I didn’t package something right and she’ll fix it, she’ll help me fill out forms even if I mess them up several times.
Customer service and loyalty as I know it have kept her little business, even though it’s hidden away, going strong for many years now.
–PK
Hello, fellow baby boomer entrepreneur! Piotr helped me find you and I’m so glad I stopped by.
I once made the error in my tailoring business of being too busy. I didn’t have a doctor’s alterations ready when he stopped in on the appointed day. Never saw him again. Ouch!
So I’m sure to never get too busy again, right? Umm. Let me go take care of a few things. Thanks for the story!
Thanks for the comments everyone! Piotr, I agree – treat your customers how you want to be treated. If you want loyalty from your customers, show it back.
Andrea
Great points, Andrea. Customer service and satisfaction are key to a company as it is much more expensive to find new customers than to retain old ones.
Corrine,
I agree completely. But getting new customers is sexy so people spend way more time focusing on new customers rather than working to keep existing ones happy.
And of course, what Sean’s story reveals is that all aspects of your business are connected. You can’t assume sales and purchasing are completely separate.
Andrea