The golden
rule for success in business is to get your customers to believe that they are
more important to you than anyone else. This guide offers some tips on how you
can retain your customers by delighting them – and gain more sales from them.
Research shows that it costs between five
and seven times more to gain new customers than to get an existing customer to
buy from you again. This reinforces the importance of retaining your customers
and keeping them happy. Calculating the lifetime value of customers also gives
you an increased awareness of the importance of retaining customers. For
example, a customer that spends $500 a year with you for 10 years is worth
$5,000. Cut that down to five years, and you've just lost $2,500, plus you face
the cost of finding a replacement customer. To retain that $2,500 in extra
business is it worth spending a few dollars a year on keeping the customer
happy?
Listen and exceed
The
main strategy behind retaining your existing customers is to put in place a
continuous customer focus. This involves getting feedback from customers and
putting that feedback into action so that you can delight them through your
improved goods and services. Put more simply, listen to customers and exceed
their expectations.
The second part of your customer retention
strategy - exceeding your customers' expectations - is achieved by improving
your business through the feedback you receive. Improved processes should lead
to improved satisfaction levels.
Retaining and delighting customers
Here
are nine tips to gain repeat business and get your customers to think more
positively about your business. Business types vary widely, so some of these
strategies may not be specifically relevant to your business, but others will
be of use to you. Choose at least a few to implement in your business.
1. Under promise and over deliver
Keep customers happy by under promising
and over delivering. For example, if a customer orders products that normally
take three days to deliver, you might quote a five-day delivery, but tell the
customer that you will contact them if the goods arrive sooner. Another example
would be to quote or estimate more accurately, so that your final price is the
same or less than the quote. This is far better than the all too common
practice of exceeding the original quote or estimate that most customers find
annoying and unacceptable.
Also think of ways in which you can exceed
the customer's expectations. Simple thoughtfulness - reflecting on what would
be useful to the customer - leads to many successful tactics. A paint and panel
shop, for instance, supplies each customer whose car has been re-sprayed with a
small can of touch-up paint (complete with a brush attached to the inside of
the lid) to cater for future small abrasions or stone chips in the paintwork.
This gesture costs the shop very little since the paint is simply left over
from the job, but the goodwill gained from the customer is significant.
2. Keep
customers informed
Make sure that staffs keep customers
informed if promises can't be met. For example, if some mishap has delayed an
order, ring up the customer as soon as you know of this. Try to compensate in
some way for the lateness: for instance, through a free delivery or some extra
product or service. Think of something exceptional that will delight the
customer. If there is a small cost involved, weigh this against the customer's
lifetime value.
3. Encourage staff to be thoughtful
Ask your staff to perform at least one act
of kindness a day, such as opening the door for a customer, or carrying heavy
parcels to cars. Being prepared to 'walk the extra mile' can pay you real
dividends. For example, asking a staff member who lives close to a customer to
make an urgent delivery on the way home, or to check that an installation has
gone smoothly, can generate very positive word of mouth reports about your
business.
4. Do the unexpected
Give unexpected gifts or rewards to
customers. For example, if you've sold a customer a laser printer, you could
send a free toner cartridge refill after three months with an appropriate note:
"You're probably close to running out of toner, so we're sending you this
first free refill with our compliments to thank you for doing business with us."
One businessperson sends two free tickets
to sporting matches to selected customers, with a note thanking them for their
support. The owner of a hardware store engages Boy Scouts one Saturday a month
to wash the cars of selected customers who pull into his premises for supplies.
These 'out of the blue' rewards can have a powerful impact on building customer
loyalty and goodwill.
5. Thank-you letter
Send a thank-you letter within two days of
the customer buying from you. If at all possible, send a note the next day. It
only has to be a hand written note on a standard card. Other variations include
sending a cartoon with your caricature to say thank you, or even a cartoon card
(depending on the customer and how much they have spent).
6. Send out cards
If you can identify a small number of
highly loyal customers, then don't simply take them for granted. Continue to
acknowledge their custom with simple ideas like sending birthday and Christmas
cards to them.
7. Send out a newsletter
Try to keep in contact with customers at
least once every 90 days. Send a regular newsletter (either by conventional
post or email) to your customers. Add value to the newsletter by including tips
that will help them improve their businesses or their lives, as well as ideas
relating to your industry. You can also direct them to free reports they can
download off your website. This will encourage them to visit your website again
and be exposed to the new products or specials it might feature. Inform them about
what is happening in your industry, community or country. Keep the sales side
low-key so they look forward to reading the newsletter and don't see it as
simply another sales pitch.
8. Special reports, cassettes or videos
If your customers spend lots of money, and
the profit per item is large, then send them special reports, books, cassettes
or videos that are relevant and will help them build their businesses or
improve their lives. If you sell to other businesses, you could send them
copies of cassettes on selling or marketing, or motivation.
An alternative for especially good
customers is a video on their interests. Find out from the survey you sent them
what sports they follow, and then send them the appropriate videotape of
rugby's greatest tries, soccer's best goals, highlights of the netball series
or whatever. Make sure to stick your business name on the video.
9. Contest
for customers only
Reward customer loyalty by running a
customer-only competition or contest. Make entry free and automatic for
existing customers and publicise the results in your newsletter, promotional
material and website.
Gaining more sales
Try these further six tactics for gaining
more sales from your existing customers.
1. Offer related or complementary products
Send an offer of a product or service that
is related to what they bought, perhaps two weeks or a month after a sale.
Offer a discount or special deal. If you don't have any complementary products
or services, then find a business that does and offer their products. (Then get
that business to do something similar with their customers, but this time with
your products or services as the offer).
2. Anniversary offer
Come up with a special anniversary offer
one-year exactly after the customer first bought from you. If the tactic proves
successful, repeat the idea every year.
3. Try a telemarketing exercise
Ring up selected customers with a brief
message about a special or new product they may like to try. Offer some genuine
saving or deal as an incentive and make it clear that this is for existing
customers only.
4. Sale previews
If you intend holding a sale, send
invitations to selected customers to attend a special invitation-only sale
preview day or evening before you open the sale to the public. This rewards
loyal customers by giving them first choice of the goods on sale.
5. Privileged website access
Provide your customers (or selected
customers) with a special pin number or password that allows them to access
portions of your website that the general public can't view. These pages could
feature specials, loyalty discounts, first information about sales, etc. Make
sure the Home Page of your website mentions the existence of these pages, so
that potential customers are aware of the benefits and privileges that flow
from doing business with you.
6. Free training and updating
If appropriate, you could offer free
training for customers in a new technology or service. For example, a camera
shop might offer special evenings to demonstrate digital camera technology and
picture enhancement and how to organise the results into picture albums on a
computer. Can you do something similar? Try liasing with your suppliers to see
if they are prepared to share the costs of the promotion and provide a
technician to demonstrate equipment. If you run a service business, think of
inviting an expert to talk on a topic, or give the talk yourself.
Summary
There should be something for every
business in this list. The whole idea is to keep in contact with your existing
customers, to build goodwill and positive word of mouth, and to prevent the
chance of your customers being lured away by the competition. They couldn't
possibly after the way you look after them.
© ANZ Bank New Zealand Limited
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