Many businesses have:
- No investment in Retention
- No alarm system for customers about be lost
- No rescue system for lost customers
- No customer multiplier system
Instead of massive sales budgets and advertising schemes, choose customer referrals, marketing, and customer retention.
Attracting and seducing strangers is hard work. It is expensive. Retention is a bargain and profitable.
Ideas:
- When invoicing customers, state that 1% of each billings goes to a non-profit. (No $50 gift cards or lunches)
- Send handwritten notes to current clients.
- Send a client survey with a voucher for a free dinner once completed.
- Send a monthly print newsletter to hot clients. Simply do a recap of what happened last month.
Some stats:
- The probability of selling repeatedly to an existing customer is 60-70% while the probability of selling to a new prospect is 5% to 20%.
- An existing customer will also spend 214% when compared to a new customer.
- A 5% increase in customer retention can increase profits 25% to 100%.
- If you can prevent 5% of your customers from leaving, you can increase your bottom line by 25% to 95%.
- 82% of customers go somewhere else because of customer service issues.
Churches are great a customer retention – they have evangelism baked in. It’s part of being a good Christian.
You can probably count on one hand the amount of personalized thank-you cards you received with any sort of bounce-back coupon.
Follow-up to ensure satisfaction.
Be assertive and proactive in moving a first-time buyer to customer to committed customer. A good way to do that is to auto-charge, like a dry cleaner mentioned in the book – a business charged monthly and were used many more time than a traditional pay as you go cleaner….look for that “auto charge” for your clients. The pay as you want customers were miserably noncompliant and did not refer customers at all. In contrast, the auto charge clients referred 70% and 80% used the service frequently.
Think Disney, which has built such loyalty with their customers.
Customer service is huge, since of all the services and products out there, there is no unique product advantage that any company has over you. If you have good human to human interaction, that’s where you can succeed.
It doesn’t matter if you have the best pizza or widget on the block, Dominos Pizza stills sells $3.8 billion per year. It doesn’t matter if you have the best product. “Being good” is a fallacy.
Train your entire team to deliver excellent customer service.
You can scale customer retention by developing a membership structure:
- Adding value – upgrade people for free (think airlines)
- Exclusive benefits and perks (think VIP members)
- Peer influence – being seen, recognized, and having status (think president’s club)
- Nature and the behavior of the person
The average business only communicates that it wants or needs something. “buy my new product” or “pay your bill”. Thinking of your customers as transactional instead of a relationship and you’ll be “that guy.” Think of anyone who you do business with having a tattoo that says “Please make me FEEL IMPORTANT” on their head. We do business with human beings.
Be encouraged as a business owner to use and share as much about yourself as possible and they will identify with you. It’s an emotional and personal connection.
The presidential candidate with the best personal story narrative was the one who usually won. The press locks in their own story – so tell yours.
Give people an interesting story to tell. Provide good tools to your customers (DVD, ebooks, actual books, newsletters), follow up courteously, diligently, and effectively with every new person sent your way.
Become the “hunted” and not the “hunter.” You can then instead focus on providing outstanding results for clients rather than prospecting.
Forced referrals equal making someone a “referring customer” of the month club and sending out letters to all their coworkers displaying their level of success. It makes others jealous. Give the club winner a spa package or a good gift that you’d get a wife, mother, or family member.
Giving referrals deepens the commitment of the customer which extends the life of that customer and increases the spending activity of that customer. “The single easiest way to double any business is for each customer to bring in a customer.”
Book two part-time appointment setters who would make phone calls and arrange appointments for you.
The common referral system is flawed: 1. send your friends over and I’ll give you $25 for example – you’re asking a lot for comparably little. Just because a current client likes you doesn’t mean a new one will.
Provide information that your customer can give out or forward (free report, white paper, or even a book!) This gives them the ability to presell to the person who has been referred before ever making an appointment. Provide “the most incredible free gift.”
Spend more money on referrals than on a cold customer. They are better customers in every way. If most business owners took a good customer to lunch every week and laid out this plan and asked the customer to do it, he’d probably increase the new business 2 to 20x that year.
Find your three raving fans.
Up-selling and cross-selling are the two best ways to bump up transaction size.
Call on birthdays, anniversaries, and big events.
Get lost customers back by:
- Acknowledgment that something must have gone awry causing them to wander off.
- Remind of core reasons they were a customer.
- Introducing “exciting news” about how you are “New and improved”
- Presenting an exclusive, extremely generous, irresistible offer
- A free gift just for stopping in
- imposing deadlines on offers
