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Marketing Magic: The X Factor in Your Marketing

The Importance of Customer Retention Marketing

October 21, 2013
Adams Hudson
Adams Hudson
Let’s begin by looking at the marketing type that maximizes the hopeful result of branding. Extremely smart marketing types call this information segmentation and mass individualization based on experiential results. They use words like this to validate their fees — just as I will if you’re thinking about buying something from us — but for this article, let’s call it what it really is: customer retention marketing.

Oh, sorry. You wanted something more glamorous? You want to talk about getting more leads for fewer dollars or how to guarantee differentiation in your market? You’d rather learn how to turn one sale into many? You feel our time would be better spent discussing the nuances of phone-melting headlines?

If you’ll practice the rare art of active customer retention, all of those can happen. This is already known by a small, well-rewarded group of contractors who’ve held a tight lid on this weapon as long as they could.

In fact, after more than a decade of preaching to what I thought were empty pews, we’re seeing massive change on this subject. It used to be when I asked seminar crowds or interviewed contractors, only about 6 percent of you did any customer retention. We estimate it to now be around 11 percent and growing. So why has this number nearly doubled? Well, before disclosing how every contractor reading this can capitalize on this former secret, I owe those in the 11 percent a tip or two on jumping ahead. Fair is fair.

You Can’t Teach Experience

To experienced retention marketers: Your previous advantage may have eroded slightly, but since you’re proactive, here are some suggestions and observations:

Increase Maintenance Agreement Aggression — This is a version of forced retention and is a natural ascension from your normal customer group. Use your clout to push for it. Negative option renewal highly recommended.

Push for Greater Differentiation — This can be accomplished through initiatives which, due to its high-tech nature and health slant, elevate your marketing position considerably.

Stealthily Pursue Web-Based Lead Generation — Web-based lead generation and others allow customized, flexible lead flow largely under the befuddled noses of competitors. Those who get in early tend to maintain an advantage. It’s inexpensive, fast, and worth a try. Consider tying in your Web presence with your direct mail retention pieces. This will allow those Generation Y’ers to access more information about your business by going online. Make it easy for your readers with QR codes that link to social media accounts and landing pages on your website.

Wean Yourself from Yellow Pages Addiction — Use the funds you once used to spend on the Yellow Pages to extend your newsletter, thank-you campaigns, and follow-up referral sources. Allow your remaining Yellow Pages ad to be a pure lead generator; small, fast and uncluttered.

Welcome to Retention Marketing

To recent retention marketers who are now using newsletters, or are relatively new to maintenance agreements, the real warning is to not quit. We see too many of you get the instant differentiation benefit and positive comments from customers, followed by a tendency to jump to the next thing. Sporadic efforts lose the momentum and bring confusion to your staff. Retention is a program; it’s not an event.

Also realize that retention marketing’s effect is like compounded interest. The true magic requires patient, continued pursuit. It builds on itself, multiplying the effects, allowing low-cost marketing advantages for the earned loyalty, shorter sales cycle, easier upsells, more referrals, and greater response rate.

On The Fence

For the group who is still thinking about doing customer retention, you can read my list of things to do and what you’ll get by doing them. Sometimes that’s all the spark that anyone needs. Yet for true change, something else must happen.

As most success coaches will tell you, it’s not about checking off items on a list. It’s about changing your mindset. And since it’s my job to be your personal tour guide for guilt trips, check this mind-shift: The normal contractor gets a customer in order to make a sale, while the marketing contractor gets a sale in order to make a customer.

Admittedly, that sounds odd, and the scarcity of those who get the above is almost the point. Regular readers of this column know why, but, this should make it clear: The contractor who is wisely counterintuitive in marketing wins at marketing. Period. Those who think, act, and do like everyone else get results like everyone else. I’ve also noticed their complaints are like everyone else’s too.

So, by really understanding and applying the marketing contractor mindset, you’re automatically in the small segment, differentiated from the pack.

Most contractors seek to get the sale — a noble goal that I fully understand. So their marketing follows that pursuit to the fullest. Those who do it well get there with hard-hitting direct response. Those who do it poorly struggle with mediocre and frustrating results from a variety of sources too lengthy and painful to cover here.

Getting the sale instead of the customer, though alluring on the surface, is limited by meager expectations. It is finite. Yet relationship thinking allows you to access the infinite.

Imagine your business just a couple short years from now. Instead of a sort-of satisfied group of customers (so labeled merely because they bought something), you see a huge crowd of raving fans. The company’s twice the size it is today, each customer a direct supporter or salesperson for you. Nearly half of them have a maintenance agreement, and they’re encouraging the other half to join them. All feel they know you to a degree, and vice versa, because you’ve built a relationship not based purely on the sale.

Loyalty is nearly unshakeable. Why? Because it’s easy to quit using just a contractor, but very hard to quit a relationship.

Readers of The NEWS can get a free customer retention report and customer retention newsletter sample by emailing freeNEWSstuff@hudsonink.com or by calling 1-800-489-9099.

Publication date: 10/21/2013

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