Article featured in Authority Magazine.

Empathy and listening. Engage customers by understanding their situation or going beyond what they expect. The delivery of a kids’ book to a family experiencing a disaster demonstrates a depth of experience and empathy, as no one has engaged the kids who have to go through this awful time. It brings comfort to the parents who are also dealing with this unique situation.

Building lasting customer relationships has many benefits, including increased revenue, positive word-of-mouth recommendations, and saving on acquisition costs. But how does one do this? In this interview series, we are talking to Product Managers, founders, and authors who can share their “Five Tips For Building Lasting Customer Relationships”. As a part of this series, we had the pleasure of interviewing Stefan Figley, President of 1–800-Packouts.

Stefan Figley is president of 1–800-Packouts, a leader in the contents and personal property restoration franchise industry since 2016 and part of the Five Star Franchising platform of home service brands. Figley has nearly 30 years of experience in the franchise and marketing industries, with a focus on brand growth.

Thank you for doing this with us! Before we begin, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to this career path?

My career started in global marketing, where the key is to make a meaningful connection that will keep a customer coming back. I naturally moved into franchising as I got a chance to help individuals build a business and take care of customers. In both instances I get to help build relationships. I enjoy working in a business where we help people, whether it’s having something they like, getting more time to do something for themselves, or taking a worry off their mind. I get a chance to do this directly with individuals building a business and our end customers.

Can you share with our readers the most interesting or amusing story that has occurred to you in your career so far? Can you share the lesson or takeaway you took from that story?

There are a few, but one sticks out in my mind. I have learned that one must always be engaging because you never know when you’ll be making a first impression. A first impression isn’t the only one you get to make, but it gets you started on the right path.

One of my team members went to a potential customer’s house. When she entered the house, she asked if she should remove her shoes to protect the beautiful home. She set them next to a pair of well-worn tennis shoes. She toured the house and discussed the concerns of the homeowner and the services we could deliver. At the end, she put her shoes on, thanked the homeowner and left.

About an hour later, the homeowner called our team member and said she was very happy with the walk-through. The well-worn tennis shoes, she said, belonged to a competitor, who was finishing a tour with the homeowner’s husband. She was impressed by my colleague’s professionalism and consideration. She wanted someone working with her, not just working for her. That was the start of a long-lasting relationship with a very good customer.

Relationships have a start, an on-going period, and an end. I use this story as an example of how to start a relationship. That is what we all do in business, and anyone who does not think about it this way is starting further behind to build that engagement and trust with customers.

Are you working on any exciting new projects now? How do you think that will help people?

In my business, we have multiple relationships to consider. One is our franchisees and potential franchisees. Currently, we are working to develop a new experience for them as they enter our brand. It is my job to build a strong professional relationship with them, to help them be successful business owners, and deliver a deeper experience about what it is to be an owner in our company and what we expect to be delivered to end customers. I have built a team of franchise business coaches to continue to offer franchisees the most support we can.

Policyholders are the end customer in our industry, and we need to understand and empathize with them. If they are working with us, something bad has happened to their house. We are trying to help get them back to normal. We have programs that help them understand our process, but this is mainly for the adults. One thing that is not addressed much is the impact these situations have on children.

So our marketing team wrote and produced a children’s book that helps them understand the process on their terms. There are two versions, one with a boy and one with a girl. The story takes each through a disaster and the experience of getting their favorite toy cleaned and back to them.

These books help families understand we are there to help them, and this reassurance is key to establishing lasting relationships. My franchise owners enjoy helping people. That is something we discuss in the onboarding for owners, and these books are an example of how we try to deliver above and beyond for our end customers. It is nice to see the reactions of homeowners and folks in our industry when they pick up one of the books and realize what it is about.

For the benefit of our readers, can you tell us a bit about your experience with building lasting customer relationships? Can you share an anecdote or two that illustrates your experience in this area?

Establishing lasting relationships is the key to growth for a service business. I have been working in this area for almost 30 years. I have worked on call center elements, the sales process, retention and customer service and win-back efforts for a multitude of service brands. One thing I am sure you have heard before, but I think it is crucial, is “Don’t burn any bridges.” In many industries relationships span a significant amount of time and there will be some good and bad elements of it, but I have seen the strength of taking the high road. When you are playing the long game, everything comes back around. Establishing lasting relationships is the key to growth for a service business. I have been working in this area for almost 30 years. I have worked on call center elements, the sales process, retention and customer service and win-back efforts for a multitude of service brands. One thing I am sure you have heard before, but I think it is crucial, is “Don’t burn any bridges.” In many industries relationships span a significant amount of time and there will be some good and bad elements of it, but I have seen the strength of taking the high road. When you are playing the long game, everything comes back around.

Another key element to lasting relationships is communication. It sounds easy, but I think it might be one of the most difficult parts of the relationship. Many customers don’t think they are being told the truth or worry that they are being taken advantage of, for whatever reason. On the service side, we must communicate.

I launched a communication plan for a home service brand that regularly asked customers for feedback. I had some doubters tell me that customers only like to complain. Here was my analysis after running it for the first year: Customers we engaged for feedback had a retention rate of 97% vs. customers who we thought were fine because they never contacted us, who had a retention level of 71% over the same period.

Why? I think we were able to hear the feedback and frustrations and address it directly. If we don’t know what it is, we can’t do anything about it. I believe that we need to know what the game is so we can play it correctly and not stick our heads in the sand and avoid the negative.

In today’s fast-paced and constantly evolving landscape, what strategies do you employ to maintain a strong connection with your customers and anticipate their changing needs?

Today, the fast-paced environment is daunting for many business owners and companies. Social media, blogs and reviews are coming from all over. For many companies, this is how they hear from their customers. I want us to be more proactive and seek feedback instead of sitting back and waiting for something to stand out.

Feedback is good and bad, but if you wait for it, you’ll hear 10 negative comments for every positive one. In today’s environment I think that is even higher, now it is more of a factor of 15 to 20. Communication is more crucial in 2023 than before. There is a lot of noise. To maintain a strong relationship we must know what customers need. The best way is to go ask for feedback and stay on top of communication.

Can you discuss the strategies that companies can employ to strike a balance between driving revenue and profitability, and focusing on building customer relationships and loyalty?

I would do an analysis of what has been happening over the last 18 to 36 months, if you have the data. If the business is a recurring service or a recurring purchase, what is the average length of a customer relationship?

At the same time, what is the real cost of acquiring a new customer? I emphasize “real” because I have seen many folks fail to calculate their time or their team’s time and the effort it takes to make the acquisition process happen. Once you have that information, you can combine data with an ongoing communication plan to understand the issues and needs of an existing customer. You will be able to see the cost difference to retain a customer vs. acquiring a new customer.

This is not simple, but even gathering this data will show you a threshold for retention/loyalty efforts. You will be able to have a fairly good idea of when an effort to retain might not be worth it, and you can let the customer go. But don’t burn the bridge. If you cannot meet their needs now, you want them to move on without negative feelings, because they might return if they cannot get what they are looking for from another source. I have seen this very clearly — customers have high expectations and the industry may not be able to deliver it, or it can be delivered only at a significant cost. They come back. I have seen it over and over.

Could you describe the metrics and measures you use to evaluate the success of your customer relationship-building efforts, and how you identify areas for improvement?

First off is actually tracking customer account data. Sounds simple, and might be. But it is not looked at by as many as you might think.

I have seen many business owners and managers go with a gut feeling about why and when customers leave. Sometimes they are generally correct, but the extended problem is that gut feelings are not actionable for others to work on. Pulling together the length of a customer (number of services or length of time) and the amount of revenue they have brought into the business, understanding at what point you have customers exiting the business, is important.

For example, in one company I led, we had an overall retention rate of 84% annually. This is a good number to watch, but it is a high-level metric that looks backwards. If you see it drop, you do not know why, and it already happened months ago. Change it to how many customers leave after a particular action in the business.

For this company, we saw that 87% of customers who left within a year left after the third service. I asked the team and franchise owners what they thought was happening and got a mixed bag of responses. So I started a research program to call any customer who canceled at this stage. The response was overwhelmingly simple. They did not feel they were getting value for what they were paying for. The first service included a one-time fee and was four times as intense as the recurring maintenance service. From the point of view of the customer, they saw a great first service and then felt that we didn’t care as much on the next two. They thought it wasn’t getting done.

From here, we could develop a strategy to address it. We changed the up-front fee and built a contract that spread the cost over a minimum of 12 services. We also added a fee for any cancellation before the 12th service. And we increased our messaging regarding the process of our service, providing a clear picture for customers to frame their expectations. We moved the average exit to the 10th service. This was a clear sign that the effort was impactful, and revenue proved it!

Regarding customer-facing teams, what steps do you take to ensure they can deliver personalized, proactive, and efficient support, tailored to the needs of each individual customer?

Hiring the right people and training! That is the simple answer. I want our locations to spend more time hiring the person for the job. Experience is good, and it is important in some industries. But for my current company it is more crucial to find the right person and train them on the specifics of our industry.

Take more time to evaluate candidates for customer-engaging positions. I feel multiple interviews with different people on your team are warranted. We all see different characteristics in people and get different reactions, allowing us to get a bigger picture of who might be representing our company/brand. I believe in utilizing different tools for a deeper review of a potential team member (i.e., Predictive Index, 6 Genius), but this is not for every position.

When you have the right people, you must have the story of the brand consistent with every employee. This is training and internal communications. “Practice what you preach.” That is 100% accurate. Train the elements of interactions over and over. Your customer-facing teams will repeat the elements that management is talking about daily. If there is a negative context in the office, it will seep into customer engagements, whether face-to-face engagements or more importantly through phone conversations. If you have customers calling in to the office or a call center a lot, it is important to engage with them right there. That is a one-to-one contact! I had small mirrors handed out to everyone in a call center with the training to smile over the phone. Think about it, you can remember your own engagements over the phone where you felt comfortable with someone, as if they were smiling while talking to you. That small element changes the overall feeling of that engagement. By focusing on that, you have the ability to tailor elements for that individual.

What tips do you have for responding to negative feedback from customers, and what steps can be taken to turn those experiences into positive outcomes?

It is crucial to treat negative feedback as an opportunity. It is an opportunity to improve that individual’s perspective, even if it doesn’t save them as a customer. Remember, don’t burn bridges.

It is also an opportunity to provide a positive outcome for the customer in the end. Within reason, of course. When responding and engaging, make sure you let the customer have a chance to provide their side. Listen, take notes and don’t get defensive. Try to gain an understanding of the root problem, not just the symptoms.

Be polite and try to resolve the problem. Explain the process you will be going through and why. Ask if doing this is this addressing their issue. Most of the time it is a misunderstanding. If it is due to bad service, rectify the service for the customer. That is what they paid for. Use this to train the employee or employees who performed it to improve their delivery and potentially avoid a similar situation in the future. Many times, just listening helps a lot. You can then make a business decision based on the facts to drive a positive outcome.

Lastly, how do you use technology or AI to enhance your customer relationships, and what tools have you found to be most effective in building and maintaining them?

Utilization of CRM systems is a must in my opinion. The argument that I hear on this is the cost. I have business owners stating they don’t want to pay the $200-$400 monthly fee for the software. If you have followed my process for building relationships and the actual value of the retention of customers, this is a minimal cost for most companies.

I would suspect that it costs $100-$200 minimum to acquire a new customer for a service business. If a tool helps you increase your retention because it manages communications more regularly and provides your entire team with historical data, it pays for itself quickly.

As for AI, there is potential to assist with developing all the content for a strong retention communication plan. Just having tools is not the success. You have to enter the data, and correctly, as it will drive all the needs in the future. If you have done this correctly, I am expecting that AI will have a large impact for businesses as they increase their ongoing communications with customers. It might assist the gap that customers currently have with companies and on-going communication.

Here is the main question of our interview. In your experience, what are five key components of building lasting customer relationships? If you can, please share a story or example for each.

1. Empathy and listening. Engage customers by understanding their situation or going beyond what they expect. The delivery of a kids’ book to a family experiencing a disaster demonstrates a depth of experience and empathy, as no one has engaged the kids who have to go through this awful time. It brings comfort to the parents who are also dealing with this unique situation.

2. Know your retention numbers and the value of your customers. Once you have a knowledge of the actual value of your long-term customers, you can strategically develop the best responses and ongoing efforts to maintain that confidence in your business. Data of the service where most of our customers exited showed us that we had to manage expectations differently, and it allowed us to address the cause. We were able to change how customers perceived our value.

3. Communication. By developing an open communication stream, including summary of service, in-between service, upcoming service appointment, etc., we were able to build confidence for the customer. They see the transparency and have fewer issues with a company, building a better relationship.

4. Feedback. Remember to ask for feedback and don’t be afraid of it. We took a proactive approach regarding getting feedback, which provided us with multiple opportunities. If there were any negative feelings, we got to hear them directly and address them, usually resulting in a more positive outcome. We were also able to drive potential reviews by customers because we requested feedback and then asked them if they would take a few minutes to post a review.

5. Training. Continuous training about your company and a consistent message from the entire team provides a strong message to customers. We developed regular stand-up meetings every week to discuss the company. It was short and positive. It repeated our desired journey and who we are, providing the team a consistent message. This translated to their engagements with our customers and reinforced confidence in our services, building a strong and longer relationship.

How do you ensure that these ideas are implemented throughout the customer journey?

Live the journey. We meet regularly to continue discussing our customer experience (journey). Proactive feedback provides us with ongoing data we can train our team with and everyone begins to hold each other accountable. We don’t stop talking about it, measuring it, and improving it.

How can our readers further follow your work online?

I’m on LinkedIn at  https://www.linkedin.com/in/stefanfigley/ and readers can follow 1–800-Packouts at https://www.linkedin.com/company/1-800-packouts-corporate and https://www.facebook.com/1800PACKOUTS.

Thank you for the interview. We wish you only continued success!