When Companies Lose Customers …
United Parcel Service suffered staggering customer defection as a consequence of its 15-day Teamsters work stoppage in 1997. The result was that, even after their 80,000 drivers were back behind the wheels of their delivery trucks or tractor-trailers, many thousands of UPS workers were laid off. A UPS manager in Arkansas was quoted as saying: "To the degree that our customers come back will dictate whether those jobs come back."
The UPS loss was a gain for Federal Express, Airborne, RPS and even the United States Postal Service. They provided services during the strike that made UPS' customers see the dangers of using a single delivery company to handle their packages and parcels. FedEx, for example, reported expecting to keep as much as 25 percent of the 850,000 additional packages it delivered each day of the strike.
UPS' customer loss woes and the impact on its employees was a very public display of the consequences of customer turnover. Most customer loss is relatively unseen, but it has been determined that many companies lose between 10 percent and 40 percent of their customers each year. Still more customers fall into a level of dormancy, or reduced "share of customer" with their current supplier, moving their business to other companies, thus decreasing the amount they spend with the original supplier. The economic impact on companies, not to mention the crushing moral effect on employees—downsizing, rightsizing, plant closings, layoffs, etc.—are the real effects of customer loss.
Lost jobs and lost profits propelled UPS into an aggressive win-back mode as soon as the strike was settled. Customers began receiving phone calls from UPS officials assuring them that UPS was back in business, apologizing for the inconvenience and pledging that their former reliability had been restored. Drivers dropping by for pick-ups were cheerful and confident, and they reinforced that things were back to normal. UPS issued letters of apology and discount certificates to customers to further help heal the wounds and rebuild trust. And face-to-face meetings with customers large and small were initiated by UPS—all with the goal of getting the business back.
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