Customers do 100 percent of the buying. They also do 100 percent of the repeat buying. And they do about 100 percent of the referring. I realize this may be too simple and obvious for most of you, but you’d never guess it by the actions of most HVAC contractors.

Retaining Business

A lost customer means that you cut off a prime source of future sales and referrals. And it’s a loss that carries on for the life of the sales he’s going to give and refer to your competition.

The fact is, previous customers spend their money 33 percent faster than first-timers, they’re 40 percent more likely to buy the upsell offer, they’re three times more likely to refer others, and they cost one-sixth the amount to retain as they initially did to attract.

Think that through for a moment. You spend roughly $275 to $325 in marketing costs to get a customer. You spend zero to watch him leave. When he re-enters the open market, you’re forced to buy him again.

Every one of your customers represents an opportunity for long-term service and profit. So, do you: a) openly attempt to drive them to your competition; b) not really do much after the sale; or c) use a strong retention program.

If my guess is correct, you smiled at “a,” you sheepishly admitted to “b,” but knew I wanted you to say “c,” which, of course, is the best answer.

Bad news of the day: If you do “b,” you may as well agree to “a” because your customer perceives a lack of contact as a lack of a relationship, which they have no stake in losing. So, why should they stay with you? If you’re starting to get the point (and I hope you are), let me get to the bottom line: You must give your customers a reason to stay.

A strong customer retention program is as essential as any acquisition marketing you can do. The most successful ones are based on several elements:

• Good Records — Your customer database is the most important data in your office. You should be able to mail to your customers instantly, knowing their purchase and service history. You can tailor messages accordingly without mailing a great offer to someone who just paid full price for the same. Think list segmentation, not one huge list.

• Maintenance Agreement Program — This is for customers only, so there’s no need to attempt to market maintenance agreements broadly. It would be costly and counterproductive. Non-customers don’t even know you; why should they enter a commitment with you? First, market for tune-ups; then when you get the lead, sell the maintenance agreement in person. This is referred to as a two-step process. When you present the invoice for service or repair to customers, you present your offer of undeniable savings and benefits, and sign them up.

• Loyalty Bonus — Discount bucks, or other pre-paid services, dissuade customer attrition. Coupons can work superbly. Wise marketers accept competitor’s coupons for dollars-off services. Why wouldn’t you?

• Referral Program — Satisfied customers make up your strongest sales force. Product or service claims from them have instant credibility in the eyes of a prospect. And the results for you can be substantial. If every customer you have refers one customer to you, you would double your customer base. Customer gets a customer is a smooth way to increase business, but it won’t happen if you don’t ask. Offer discounts for system purchases that includes referrals.

• Customer Retention Newsletter — A newsletter program is an automatic program, shared two to four times a year that builds relationships and gently prods for all of the above, plus more sales and huge retention. The best newsletter campaigns give customers rich, interesting information that is useful in helping them run their households safely and cost-efficiently. Spice up your newsletter by using QR codes to link your offline and online worlds. These are an added benefit for your newsletter and can help increase website traffic, allowing you to fit more quality content (how-to instructions, energy saving tips, etc.) into your newsletter.

Customers only know you care in the same exact way anyone would know you care. You’ve got to tell them, show them, and prove it to them. A strong customer retention program is the tried-and-true method for doing just that.

NEWS readers can receive a free spring newsletter sample by sending a request to freeNEWSstuff@hudsonink.com or by calling 800-489-9099. Visit www.hudsonink.com for more information.

Publication date: 5/27/2013 

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