Ten more next year and Joe is losing $50,000.

But if Joe had handled the situation correctly, Jane could have turned into one of his most loyal customers. Here’s what he (and you, when it happens) should do next time:

1. Own up to the mistake. The sooner the better. It’s hard for people, and businesses, to admit mistakes – but do it anyway. In the story above, the employee passed the mistake off to “the dry cleaning process.” Never do that. Even if the problem is something completely out of your control, stand up and take responsibility. Yes, it may be hard on your ego. But wha

It’s bound to happen sooner or later – yes, even to you and your business. Sometime or other, you will make a blunder that upsets a customer. It may be an employee mistake (honest or intentional), it could be a defective product, it could even be an unreasonable expectation on the part of your customer. The cause really isn’t important.

What is important is that you have an angry customer on your hands.

What, you ask, does this have to do with marketing advice? Everything. Because it costs you eight times as much to get a new customer as it does to keep an old one. Because your angry customer isn’t going to stop at avoiding your business – she’s going to tell everyone she knows just how sorry you are. Because if you have been getting a steady stream of new customers (at eight times the cost, remember) but your overall numbers aren’t growing as fast, you are losing money. Bigtime.

Here’s an example: Jane is a regular customer of Joe’s Bargain Dry Cleaning. Once a week she brings her entire business wardrobe in for cleaning. Since her entire business wardrobe isn’t that big, she spends about fifty bucks every time. This week, a stain on her favorite blouse isn’t removed, and Jane calls in to complain when she gets home. The employee Jane speaks to claims to be sorry (though she doesn’t sound like it) and says that not all stains can be removed by the dry cleaning process. She will, however, give Jane a coupon for a free one-item dry clean.

Well, Jane wanted to wear her favorite blouse tonight for her big date with Jim. Now she can’t. Since she lives right around the corner, she asks if she can bring the blouse back now and have the stain treated. She is told that Joe’s does not accept same-day orders after 10 a.m.

Jane hangs up totally disappointed. Forced to wear a less-flattering blouse on her date, she is somewhat lacking in self-confidence (it’s hard to feel good about yourself when you think you look bad) and her date does not go well. She vows never to darken the door of Joe’s again. And she doesn’t.

Now, lets crunch the numbers: Jane was spending $50 a week at Joe’s. Subtracting two weeks for Jane’s vacation time, that means she was spending $2,500 a year at Joe’s. Ten Jane’s in a year (if Joe is really lucky) and that is Twenty-five thousand dollars Joe will not be putting in his back pocket this year. Ten more next year and Joe is losing $50,000.

But if Joe had handled the situation correctly, Jane could have turned into one of his most loyal customers. Here’s what he (and you, when it happens) should do next time:

1. Own up to the mistake. The sooner the better. It’s hard for people, and businesses, to admit mistakes – but do it anyway. In the story above, the employee passed the mistake off to “the dry cleaning process.” Never do that. Even if the problem is something completely out of your control, stand up and take responsibility. Yes, it may be hard on your ego. But what

angry customer isn’t going to stop at avoiding your business – she’s going to tell everyone she knows just how sorry you are. Because if you have been getting a steady stream of new customers (at eight times the cost, remember) but your overall numbers aren’t growing as fast, you are losing money. Bigtime.

Here’s an example: Jane is a regular customer of Joe’s Bargain Dry Cleaning. Once a week she brings her entire business wardrobe in for cleaning. Since her entire business wardrobe isn’t that big, she spends about fifty bucks every time. This week, a stain on her favorite blouse isn’t removed, and Jane calls in to complain when she gets home. The employee Jane speaks to claims to be sorry (though she doesn’t sound like it) and says that not all stains can be removed by the dry cleaning process. She will, however, give Jane a coupon for a free one-item dry clean.

Well, Jane wanted to wear her favorite blouse tonight for her big date with Jim. Now she can’t. Since she lives right around the corner, she asks if she can bring the blouse back now and have the stain treated. She is told that Joe’s does not accept same-day orders after 10 a.m.

Jane hangs up totally disappointed. Forced to wear a less-flattering blouse on her date, she is somewhat lacking in self-confidence (it’s hard to feel good about yourself when you think you look bad) and her date does not go well. She vows never to darken the door of Joe’s again. And she doesn’t.

Now, lets crunch the numbers: Jane was spending $50 a week at Joe’s. Subtracting two weeks for Jane’s vacation time, that means she was spending $2,500 a year at Joe’s. Ten Jane’s in a year (if Joe is really lucky) and that is Twenty-five thousand dollars Joe will not be putting in his back pocket this year. Ten more next year and Joe is losing $50,000.

But if Joe had handled the situation correctly, Jane could have turned into one of his most loyal customers. Here’s what he (and you, when it happens) should do next time:

1. Own up to the mistake. The sooner the better. It’s hard for people, and businesses, to admit mistakes – but do it anyway. In the story above, the employee passed the mistake off to “the dry cleaning process.” Never do that. Even if the problem is something completely out of your control, stand up and take responsibility. Yes, it may be hard on your ego. But wha

n’t removed, and Jane calls in to complain when she gets home. The employee Jane speaks to claims to be sorry (though she doesn’t sound like it) and says that not all stains can be removed by the dry cleaning process. She will, however, give Jane a coupon for a free one-item dry clean.

Well, Jane wanted to wear her favorite blouse tonight for her big date with Jim. Now she can’t. Since she lives right around the corner, she asks if she can bring the blouse back now and have the stain treated. She is told that Joe’s does not accept same-day orders after 10 a.m.

Jane hangs up totally disappointed. Forced to wear a less-flattering blouse on her date, she is somewhat lacking in self-confidence (it’s hard to feel good about yourself when you think you look bad) and her date does not go well. She vows never to darken the door of Joe’s again. And she doesn’t.

Now, lets crunch the numbers: Jane was spending $50 a week at Joe’s. Subtracting two weeks for Jane’s vacation time, that means she was spending $2,500 a year at Joe’s. Ten Jane’s in a year (if Joe is really lucky) and that is Twenty-five thousand dollars Joe will not be putting in his back pocket this year. Ten more next year and Joe is losing $50,000.

But if Joe had handled the situation correctly, Jane could have turned into one of his most loyal customers. Here’s what he (and you, when it happens) should do next time:

1. Own up to the mistake. The sooner the better. It’s hard for people, and businesses, to admit mistakes – but do it anyway. In the story above, the employee passed the mistake off to “the dry cleaning process.” Never do that. Even if the problem is something completely out of your control, stand up and take responsibility. Yes, it may be hard on your ego. But wha

ally disappointed. Forced to wear a less-flattering blouse on her date, she is somewhat lacking in self-confidence (it’s hard to feel good about yourself when you think you look bad) and her date does not go well. She vows never to darken the door of Joe’s again. And she doesn’t.

Now, lets crunch the numbers: Jane was spending $50 a week at Joe’s. Subtracting two weeks for Jane’s vacation time, that means she was spending $2,500 a year at Joe’s. Ten Jane’s in a year (if Joe is really lucky) and that is Twenty-five thousand dollars Joe will not be putting in his back pocket this year. Ten more next year and Joe is losing $50,000.

But if Joe had handled the situation correctly, Jane could have turned into one of his most loyal customers. Here’s what he (and you, when it happens) should do next time:

1. Own up to the mistake. The sooner the better. It’s hard for people, and businesses, to admit mistakes – but do it anyway. In the story above, the employee passed the mistake off to “the dry cleaning process.” Never do that. Even if the problem is something completely out of your control, stand up and take responsibility. Yes, it may be hard on your ego. But wha

Ten more next year and Joe is losing $50,000.

But if Joe had handled the situation correctly, Jane could have turned into one of his most loyal customers. Here’s what he (and you, when it happens) should do next time:

1. Own up to the mistake. The sooner the better. It’s hard for people, and businesses, to admit mistakes – but do it anyway. In the story above, the employee passed the mistake off to “the dry cleaning process.” Never do that. Even if the problem is something completely out of your control, stand up and take responsibility. Yes, it may be hard on your ego. But what’s more important: your ego, or your wallet?

2. Make it right. Immediately. Don’t make them jump through hoops to get a refund or a replacement (or better yet, both.). Jane should have been allowed to come down right then and have her blouse treated while she waited. If the stain still wouldn’t come out, she would know Joe’s had done their best.

3. Make it better. Your customer hasn’t just been irritated. She’s been inconvenienced. Give her something extra for her trouble. After treating Jane’s blouse while she waited, she should have been given an entire weeks dry cleaning for free. Joe would have been out $50 in the short term, but his $25k for the year would have been saved. And Jane would never even consider another dry cleaner as long as she lived.

Following these steps will give you rabidly loyal customers. And when you combine that with steady new ones, your business will grow exponentially.