Tuesday, November 25, 2008

Marketing Strategies: Customer Retention

I really appreciated Jeffery Gitomers email this week and thought it deserved re-enforcing with some comments here. Several of my clients have been struggling with retention of both staff and customers, and looking for ideas on how to reduce this.

Most businesses spend lots of time and money going after new customers. Most businesses also have a turnover (loss) of current customers, some as much as 50%. Many of them know they are not getting repeat customers, but do not calculate the retention statistics. When presented with the facts, upper management will say “this is normal” because they wouldn’t want anyone to think it was abnormal. In fact, a 50% or more loss of customers is preventable.

What most businesses fail to rationalize that their present customers constitute 100% of all their sales, and 100% of all their profit. Yet by comparison of marketing dollars spent, they’re spending far less to keep their existing customers than they do to gain new ones.

Here’s what Jeffrey recommends you do this holiday season to keep your customer base:

1. Call as many customers as you can personally. No email, no letter, no card, just call. Leave a message telling them how much you appreciate their business this year, and how you look forward to earning their business next year.
2. If you are going to send a card, sign it personally with a note thanking them in addition to whatever your printed message says.
3. Resolve to help them over the course of the next year, so that you can be seen as more than a vendor or a product provider, and be looked at more as a partner.

Back to the issue of statistics, there is an old saying that goes 'you get what you expect'. This can be loosly translated to 'you get what you measure'. So if you are not using key performance measurements in your business, you should be!

A key in keeping customers is providing them with value - things they see as important and would be willing to pay for. So why not follow up with your past customers and give them something they would value? This keeps you on the radar as the goto person for what they need!

If you sold them a house, show them how to build equity. If you sold them a copier, show them how to be more efficient in the office.

Everyone has a value that they can share, and most don’t take advantage of it. By giving value that will make your customers appreciate you, they will think twice before they stop doing business with you. And they won't think twice about referring someone else to you.

If you have not visited Jeffrey's website, you can jump there by clicking here


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