Some
Customer Retention Ideas
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Why
is Customer Retention So Vital?
Even
if you
believe (rightly or wrongly) to curtail your marketing spend when
times
are tough, it is essential that you market effectively and
profitably
to your customer base and keep your customer retention as high as
possible.
It's all to common to see someone working furiously trying to to
get business
in the front door but only to lose them again via the back
door!
Now,
more
than ever, it is essential to retain your profitable clients and
ensure
that they remain loyal. You've probably already heard the
statistics bandied
around that it's about 5 times more expensive to acquire and sell
to a
new client than it is to sell to an existing one.
Not only that, but it has been suggested that increasing your
customer
retention by just 5% increases your overall profits from between
25%
to 85%!!! This is usually because people spend a fortune
acquiring
business but usually once a customer is in place, then running
costs are
typically a lot lower.
Whilst first time buyers tend to be "tryers" - just
testing
you out, long term customers tend to be more satisfied with the
relationship
and consequently less prone to switching to competitors, less
price sensitive
and offer more word of mouth referrals for you.
They're usually cheaper to service too as they already know your
processes
so need less "education".
Additionally, increased customer satisfaction and retention
increases
your staff motivation and job satisfaction too. Not surprising
really!
Who'd want to work for a company that's only got angry customers
calling
to complain or leave all the time? Consequently, this can lead to
a virtuous
circle because happy staff treat their customers better.
If you are in a business with little differentiation, staff
service, communication
and attitude towards customers is everything!
Some Reason Why People Might Leave
You:
- Bad
Service.
(How can you improve this?)
- Pricing
Issues.
(How can you help your customer afford your services
?
e.g. Can you offer payment by installments or a slimmed
down
version of your service?)
- Customer
has Expired, Retired, Been Fired or Re-Hired.
(How often do yo update your records?)
-
Customer has Moved.
(Can you still service this or sell the client to
someone else?)
-
Customer no longer has a need for the service.
(Have you listened to your customers needs
recently?)
-
Customer Received a better offer from a competitor.
(How can you keep your customer loyal - see
below!)
Of
course,
while there are many others reasons you can see clearly from this
that
good, regular communication is the key here!
How
You Can Increase Customer Retention - The Wrong Way.
Some companies try and keep their clients by using
contracts
that are difficult to get out of. Anyone who knows me will know
how much
I hate this. In my line of work, other 'tricks' of the trade can
include
owning domain names that the customers use. (Sometimes the
customer isn't
even aware that they don't own their own domain name!)
Or Legacy Code. If you have a shopping cart or
some kind
of database website using code written by a specific programmer,
it can
be difficult to switch website supplier so watch out for this!
In a nutshell, no-one likes to be kept by a chain. It will breed
resentment
and will possibly cost you more than the value of the
customer.
How
You Can Increase Customer Retention -- The Right Way.
Basically, it all comes down to good communication and great
customer
service! Simple really.
Here's a few specific things you can do.
Email/Fax/Write/Ring - REGULARLY.
Contact your customers on a regular basis and ask them if
they
are happy and if there is anything they want help with. Make them
aware
of your product or service improvements and keep supplying tips
and advice
that will help them use your services. (This is what I devote a
lot of
time to and I can say with 100% confidence that it has catapulted
my business
forward.)
It is why I am writing this right now!!!
Be Personal & Keep Your Service Memorable.
Remember clients' birthdays. Send Christmas cards. Have
an account
manager that knows your customers by name. Use decent CRM(Customer
Relationship
Manager) software to be aware of which customers buy certain
products
(seasonal items, high ticket etc) and market specifically to
them
at the right time.
How about this? Offer a personalised website
address
for them to view your proposal or tips or feedback. So, you are
called
ABC Trading Ltd and your client is called John Smith, then how
more likely
is it that they'd read an article at
www.abctrading.com/JohnSmith
??
Have Fun.
Life is for living! Unless you work down a coal mine or
with
unexploded bombs, try and have a little fun and this will filter
down
to your customers. Happiness, like sadness is
contagious.
Pay
Attention To Complaints And Compliments.
If someone is happy with your service ask for a
testimonial
and add it to your website. If they're not happy, then run through
exactly
why they're not happy and try and elevate them to the point where
they
are happy! Either way, you need to ask.
Offer Loyalty Rewards.
If you have an online shop, offer regular bonuses to loyal
customers.
Offer rewards for "long service". If someone has been a
customer
for a long time, then even a randomly received box of chocolates
to say
that they've been with you for xxx months or years can be a real
shot
in the arm for their perception of your business.
Say Thank You!
If someone has bought from you (or even better - referred someone
else)
then simply thanking them for their business is often overlooked
by many
busy business owners.
By the way, if they have referred another business, ALWAYS reward
them,
no matter how insignificant the sale may be to you.
Use Mystery Shoppers.
OK - so YOU know how important great customer service is. But how
often
do your staff ask the right questions or handle complaints when
you're
NOT around! You can simply test it by getting a mate to call up
and ask
'scenario' type questions.
(Remember to REWARD staff if they do an exceptional job - this is
your
lifeline to the outside world.)
Give People MORE than they Expect.
The bunch of roses in the boot of your new car is the kind of
thing that
you half expect. A coupon for your wife to spend the day at a
health spa
isn't. So Aim BIGGER.
Remember, 5% increase in customer loyalty means an extra 25% to
85% in
profit
- so go the extra mile because it easily pays for
itself.
Upsell & Cross Sell
When you have a PERSONALISED relationship with your
customers,
you can upsell your other products and services and even offer
other peoples'
products and services as a way of leveraging the relationship. So
if,
you sell cars, why not HELP your customers, by getting them a
great discount
at the local tyre and exhaust place. DON'T just send loads of
adverts,
they'll resent it.
Survey
Your Customers.
Show your customers that you care what they think by not only
surveying
them as quickly and efficiently as possible but also let them know
AFTERWARDS
what other people think and what you are going to do with THEIR
tips and
suggestions. Taking up a customers time with a survey only to be
not appreciated
afterwards will have the opposite effect!
A trick here is to use your employees to get the
your
customer feedback. They have the relationship with your clients
(and if
they don't they should) They can speak to your customer by name
and should
know their history. Leverage that relationship and train your
employees
to always ask for feedback. Make it policy.
Handle Complaints IMMEDIATELY
This needs no further explanation. No excuses, just do
it.
The upshot of what I am saying is that when times are tough, you
have
to communicate more than ever with your
customers.
Look at it this way, if someone was chatting up and flirting with
your
wife/husband/partner and you weren't constantly being attentive
and trying
to keep them happy then you already know what happens next! This
is exactly
what happens with your customers!
Other businesses are 'chatting them up' all the time by offering
inducements
and promises and so now more than ever you need to keep them
loyal.
If
you would
like more help about how to use the web to increase customer
retention,
please
visit http://www.mklink.com/getstarted
today or call 01454 852414.
'till
next
time,
Mike Knight. MKLINK
Internet Marketing
Tips
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