Computer programmers know all too well what “vapourware”
is.
Vapourware, is when the sales guys get so caught up in
the sale, they tell a potential customer that your software product does “X” –
when in fact, it doesn’t.
“X” is something that particular customer has always
wanted done.
So, naturally, they buy.
Next day, the head programmer is freaking out, because he’s
been told to make the software product do “X” within an unreasonably short
amount of time.
Because software development usually takes more time than
less, the sales guys keep stalling the new customer, to buy time for the
developers to create the feature which never existed in the first place.
Hence the term, “vapourware” because the software to do “X”
never existed before – but was sold as if it was.
Vapourware occurs in all industries and sectors, not just
ones based on software.
Anytime a company makes a claim about their products or
services which is NOT true – that’s a form of vapourware.
For the company, it’s a seemingly great way to steal
customers from the competition.
Internet Service Providers are a great example of this –
each one promises faster, more reliable service than their
competition.
The second they have a disruption in their service, which
causes a massive slowdown or shutdown, all those customers that were falsely
promised faster, more reliable service, call to complain.
It’s why so many of us have jumped back and forth from
one Internet Service Provider to another, and even back again.
Why?
There is a misconception in business, that constantly
bringing in new customers sustains a business. This misconception starts at the top, and flows down throughout all levels of a business.
When this misconception reaches the marketing and sales teams, they figure they can say or do anything to convince a potential customer to become a new customer, because it's the new customers which sustain the business.
Why is that a misconception?
Here are the latest stats from some of the business world’s
best sources:
1. A customer is four times more likely to defect to a
competitor if the problem is service-related than price- or product-related – Bain & Company.
2. The probability of selling to an existing customer is
60% to 70%. The probability of selling to a new prospect is 5% to 20% -- Marketing Metrics.
3. For every customer complaint there are 26 other
unhappy customers who have remained silent – Lee
Resource.
4. 96% of unhappy customers don’t complain, however 91%
of those will simply leave and never come back – 1Financial Training services.
5. A dissatisfied customer will tell between 9-15 people
about their experience. Around 13% of dissatisfied customers tell more than 20
people. – White House Office of
Consumer Affairs.
6. 70% of buying experiences are based on how the
customer feels they are being treated – McKinsey.
7. 55% of customers would pay extra to guarantee a better
service – Defaqto research.
8. It takes 12 positive experiences to make up for one
unresolved negative experience –“Understanding
Customers” by Ruby Newell-Legner.
9. A 5% reduction in the customer defection rate can
increase profits by 5% to 95% – Bain
& Company.
10. It costs 6 to 7 times more to acquire a new customer than to retain an existing one – Bain
& Company.
So what can we learn from this?
Constantly bringing in new customers is important to any
business, however, it is far more important to take care of your current
customers, because keeping them happy is what drives your business.
What’s all this have to do with “vapourware” and selling
products and services that don’t exist?
It’s the broken promises we make to our customers which
cause the biggest headaches, and lead to the highest customer turn-over.
Sell your customers on the Sun, the Moon and everything in
between, but if you can’t deliver that, then when they find out – and they
always find out – that customer will drop you like a hot potato.
Leaving you with one less customer – or a hundred, or a thousand, or even a million fewer customers – because the more you promise but don’t deliver, the quicker your customers will come and go.
Like a revolving door of customers.
Consider this, there is a high end coffee shop in one of
the poorest parts of Toronto. They sell exceptional coffees, lattes, teas,
fancy drinks and gourmet baked goods, at high-end prices. They provide up-scale
service too – if you get anything from them that’s not just right, they’ll
immediately take it back and replace it free, without any questions. Your
satisfaction is their top priority.
Yet, this high end coffee shop, is in one of the poorest
areas Toronto.
How do they stay in business?
The people in the area can’t afford a $5 cup of coffee every
day.
The answer – they have regular, repeat customers. The
coffee shop has been in business over twenty years, and over that time, has
built a large following of people that will come from all over the city, to
munch on a $4 cookie, while sipping a $5 hot caffeinated beverage.
Years ago, the area was more prosperous, and those living
there were well to do. As the neighborhood changed, the wealthy customers left
the neighborhood.
Had this coffee shop relied on attracting new customers
to sustain itself, it would have gone out of business a long time ago. However, they've constantly delivered what they promised – exceptional foods, drinks and
service.
So their customers keep coming back. Despite no longer
living or working in the area.
Do you tell your customers one thing, but deliver
another?
Do you have issues retaining customers?
Perhaps you should look at your products and services, to
make sure they deliver what you are telling your customers they deliver.
Because it’s easier to keep current customers, rather than replace them with new ones.
