How many times have we read that it costs 5 to 7 times as much to acquire a customer as it does to retain one? And yet, knowing that existing relationships are more profitable, we spend the majority of our planning and budget on new customer acquisition.
Unless you’re a brand new company, quit it. Until you’ve optimized profitability of your existing relationships, you’re wasting resources.
What are you doing to make your customers feel appreciated? Don’t have time? WRONG! Appreciating people adds directly to your bottom line for three excellent reasons:
1.Your best customers buy more often
2.Their average purchase is two-thirds greater
3.They refer others in greater number
I love the Ritz Carlton’s formula.
They offer a warm and sincere greeting, using the guest’s name when possible. They pride themselves on anticipating the needs of each guest. They offer a fond farewell at the end of each guest’s stay.
Do you treat every customer as if they were your best customer? Maybe it’s time. Some of these basics should be automatic. Respect your customer’s time. Keep your promises. Keep your customer in the information loop. Deliver the same day your customer purchases. Show genuine interest in your customer’s satisfaction and success.
Look for additional customer touch points. Send “thank you” messages. Send birthday cards. Ask your customers about their dealings with your company, and ask their advice. Its flattering to be asked. Gather, analyze, and act on their feedback. Not only will your customers feel as if you consider their opinions valuable, you’ll also improve your service.
You plan to remember special dates for your friends and loved ones, don’t you? Birthday card for Grandma has to be mailed by Friday? Call your brother on his birthday? What are we going to do for the folk’s anniversary?
Do you know your customer’s birthdays? Hummm. Well, you do know the anniversary of their first purchase, don’t you? Why not? Send a “You’ve been our customer for a year, and we appreciate you” card. Drop a hand-written post card to your best customers telling them of the new inventory you’ve just received. If you think about it, there are dozens of reasons to contact your customers.
Back to anticipating your customer’s needs:
Do you sell products in a predictable order? Does your homeowner customer typically purchase a lawnmower, then a chainsaw, then a brush cutter? Send information about the next probable purchase to customers who haven’t even asked about it, yet.
Is it likely that your customer needs accessories when she makes a specific purchase? If she’s just bought a laptop computer, does she need a docking station for her desk? Does she need an MP3 player to store her downloaded songs? Would she appreciate a kit of cables, blank recordable media, and rechargeable batteries?
Can you introduce your customer to your service manager, and schedule her first preventive maintenance appointment?
As your customers own and use your products, they’ll learn of other needs they haven’t even suspected, yet. Help your customers to buy more from you by helping them to anticipate and don’t forget to always work with an appointment scheduling software, just to keep track of your appointments, there is nothing worse than having your customers waiting.
And when you screw up?
Proactively taking care of a customer’s problem can actually improve your relationship. Customers expect you to care. They prefer you to competently fix their problem, now.
One of the best customer service formulas is “Whomever takes the call owns the problem.” In other words, the employee who is dealing with the customer is not allowed to pass that customer off to another employee. Of course, that also means you have to delegate authority to your employees to accompany the additional responsibility.
Owning the problem means making it personal. Not “We’re sorry,” but rather “I’m sorry. I will fix this for you..”
What are your customers worth?
Don’t know? Here’s a tool from Harvard Business School to help you with your calculations.
Last thought (for today):
No more excuses. Buy a box of “Thank you” cards, and start sending them today.
Chuck McKay is a marketing consultant who helps customers discover you, and choose your business. Questions about helping your business thrive during an economic recession may be directed to ChuckMcKay@ChuckMcKayOnLine.com.
Thanks for the article today Chuck. As usual, you touch on the other points of the marketing cycle that businesses don’t tend to focus on. The easy way out is to advertise for new customers but the smart money is in your existing customers.
I posted a clipping from your article on one of my blogs at http://www.restaurantmarketingblog.ca/2008/08/dont-search-out-new-customers-until-you.html as I thought that it was an important message to get to some of the restaurants we work with. I hope that’s ok.
Keep the great stuff coming as always.