Faster than a speeding Moped, more powerful than a 60-watt
bulb, able to leap small children in a single bound…it’s me, Market Man!
Ok, maybe it takes me two leaps, but children are
growing bigger and bigger these days. Have you looked at the size of these things
they’re calling kindergartners? It’s
like they’ve all been eating their Wheaties…or else there’s something in
everyone’s water but mine!
Enough about me and my delusions of vertical grandeur. Let’s talk about the fantasy world you’ve
been living in. You know, the one where
you provide someone a service once and then think that makes them a
customer. Or the one where your service
and expertise is so amazing that customers remember your name and number
with total recall, never visit the Yellow Pages again, and refer you endlessly
to friends, family, and neighbors.
That’s the sort of LaLa land that will put you straight out
of business and into the unemployment line.
In the real world, it’s your responsibility to remind customers
that you exist and that you provided an exemplary service. And if they forget you, guess whose fault it
is? Bingo. Not theirs.
So, Who Are Your Customers?
Calls from returning customers don’t automatically
come. In fact, quite a few of the ones
you rushed out to see on a cold winter (or warm summer) day for an emergency
repair don’t even remember your name.
So, how could you expect them to remember that they’re your customer? When they need a contractor again, they’ll
probably be flipping through the Yellow Pages –starting the process all
over.
Now, don’t be offended that customers are so fickle. Instead, you’d be much better off recognizing
that human nature and sound marketing practices can work together to keep your
customer files filled with active customers.
So first, let’s clarify why your customers would lose
interest in your company anyway.
According to a survey of 9,000 paying customers, customers leave for any
of the following reasons:
§
4% said your pricing was unfair.
§
9% died or moved away.
§
12% had an unresolved complaint.
§
16% took a competitor’s offer.
§
55% left due to your “indifference”. This just
means they didn’t think you cared!
The
second reason is the only one you can’t do anything about. And, the last two figures actually relate to
the same reason: 71% left because you weren't there… but your competition was.
Customers
value relationships with their vendors.
In fact…
- 37%
said the relationship was the most important reason they bought.
- 22% said
it was because they owned another product of yours.
- 14%
were referred by a friend or family member.
Add those up, and 73% of your business has some relationship
tie in.
So, now you know two key points: customers leave because you aren’t there for
them, and they’re looking for a relationship.
But here’s where these issues get further complicated. Contractors typically spend up to 80% of
their marketing money going after people with whom they have little or no
relationship (Yellow Pages are the best example). Yet, if they would redirect a portion into
effective retention marketing, they could transform their contracting
business.
The simple fact is this:
Contact is the way to keep customers.
And, “contact” isn’t some kind of big marketing mystery. It’s easy things, like follow-up phone calls
after repair or service calls, thank you letters, holiday cards and customer
newsletters.
That
last example, the customer newsletter, is the crown jewel of retention
marketing. They’re simple to use, quick,
and customers keep them around.
Your newsletters should have
information that is not solely about the business. This is because you
must – repeat “must” – retain customers’ interest… and 2500 words on sump pumps
will not do it. In order to be effective
and interesting, maintain a 60/40 split of “general interest” to “specific
field interest” in your editorial split.
Call, email or fax us for a free sample.
The best
newsletter
campaigns give customers rich, interesting information that helps customers run
their households safely and cost-efficiently.
Plus, they bring your company name and logo right into your customers’
homes. It keeps them informed about new
products and services while proving customer benefits. Best of all, it’s
not perceived as “advertising” and thus forges a far better image and
strengthens the relationship. A better relationship equals better retention.
One other important note:
You’ve already paid to get these customers. Studies show that it costs
you $275-$325 to get a customer. Yet, a good Customer Retention newsletter only
costs about $3 a year including postage for four issues. It doesn’t take a financial genius to see
that retention marketing is far less costly than acquisition marketing – and
just as important.
What’s Investment and Payoff In Customer Retention?
A Customer
Retention campaign investment will range from a minimum of 6-8 of you’re
your total marketing budget. You should send newsletters between 2-4 times per
year to every customer who has written you a check in the last 48 months.
That’s a paltry expense when you consider all you’ve just read. But for you
fence-sitters, look at these figures…
§ Loyal
customers spend 33% more than non-loyal.
§ Referrals
among loyal customers are 107% greater than non-loyal.
§ Rate
of referral is highest when closest to the point of contact.
The fact is your company’s current customers are the
absolute #1 source of your future sales.
When you lose customers through neglect, you lose all of their future
business and all of their referrals to your competition. When you keep customers by maintaining
regular contact, you keep that pool of sales for yourself. So get your head out of the clouds and go
keep some customers – before your competition beats you to it.
