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Customer Retention
The
following fact should be enough to get every business to
establish a customer retention method for their business but
sadly it is not.. The average business spends
7 to 9 times more to attract new customers than to keep old
ones. Yet customer loyalty is, in most cases, worth ten times the
price of a single purchase.
Customers become your customers for a large
number of reasons. However, they stay customers for much
different reason than they became customers. The National
Association of Small Business Research shows that the average
business will lose 40% of every new customer in the first year
and another 20% the second year. Yet most businesses spends 80%
of their budget attracting new customers and only 20 percent or
less on their present customers. This ratio does not make sense
since present customers on average spend 33 percent more that
new customers and cost very little to retain them.
A survey on " why customers quit" found the
following.
3 percent move away
5% develop other friendships
(from Retention Programs??)
9
% leave for competitive reasons.
14% are dissatisfied with the
product.
68% quit because of an attitude of indifference toward the
customer by the owner, manager or some employee.
From the above statistics it is fairly
obvious that we should spend our time and money on the
customers in the 68 percent group. Here is where the greatest
effort should be. The first step of course is to train employees
in customer relations. Teach them to be friendly and just act
nice and helpful without over doing it. In my 40 years of
experience in business I was shocked to learn that a great
percentage of employees do not know how their employer wants
them to act. Strange as it may seem most employees want to be
nice, smile a lot and talk to the customer. You just need to
give them permission and a little bit of training.
The second way to solve the 68% problem is
with card programs. It has been found in business research that
Greeting Cards and Postcards are the simplest, most
effective and most inexpensive method. We have a program that we
use presently and have used for over 40 years of various kinds
of businesses. This always has worked for us and it works for
hundreds of other businesses, without fail. It works because the
program makes friends with the customer and establishes trust.
The customer becomes one of the family. And we all know that
friends buy from friends and the people they trust.
Simply put this is our program, it is called
"Customers-For-Life".
1. After Every First Contact Or Sale.
Send A Thank You Card
2. One Card Mailed Every Month To
Every Customer. Print Addresses in Handwriting Type and
Hand Stamp. No Labels No Postage Meter Every card is being
sent to the person you love the most.
Each card must have a personnel message
inside. Happy Birthday, Happy Halloween, Groundhog Day, July 4th
etc. No advertising. The emphasis is personal from you to
them. "Customers-For-Life". program is design to create
relationships, to make friends and establish trust. Your name
and company name is all that is recommended. Individuals who are
a business should just use their name most of the time. Most
people want to turn this into an advertising program, with every
card telling about the details of their product or service. No,
No and Double No, because after sending a couple of cards with
nothing but ads it becomes junk mail in the eyes of the receiver
and you defeat the purpose. They just start throwing them away.
Cards have a 98% open rate and a 33% save rate. Capitalize on
it. After one year of this you will never stop as long as you
are in business.
Customer Referrals There
are two real easy ways to get referrals. The first method is
after establishing a friendship and a little trust is
simply ask. The asking part is done at the time of
sale or at a service call. If you are in a service business like
a salon for example you can say something like this as the
customer is leaving. "Thank you so much Mary for coming in and
don't forget to tell your friends where you received that
beautiful "hair do" The best way is to make it easy and fun.
The second way is the easiest way.
Surprisingly our tests show the most effective method is
to just thank the customer for the referrals already given In
the "Customer-For-Life" card program above. Make sure that
three cards a year say "Thank You for your referrals". It
does not matter whether they gave you a referral or not, the
customer will still feel like he was thanked for being a good
customer.
The "Customer-For-Life" method always works.
The world record new car salesperson Joe Girard used it
religiously. I personally have used this program in five
different businesses and it work successfully every single time.
From the very beginning I received positive comments on the
cards Almost any business of any size can adapt this program and
be successful with it. It always, more than pays for itself and
sometimes can get record setting results. |
