Marketing Magic: The Common Problem of ‘Thermometer Marketing’
Customer Retention Marketing Helps Contractors Weather the Storm
Thermometer marketing — do you do it, too? I’m not talking about the marketing of things that read the temperature. I’m talking about contractors who wait on the weather to bring them leads. Or worse, those who answer, “How’s business?” with a weather report that begins with, “Well, it hasn’t really gotten hot yet, so …”
Tragic. Sure, your business is weather-related, but if it’s weather-dependent, you have — let me clear my throat here — a significant marketing problem. How are you supposed to run a reliable business and reliably pay reliable employees and yourself if you’re counting on something as laughably unreliable as the weather? Take all the time you need to answer that.
Also, if you’re not doing much marketing, and your competition isn’t doing any, I guess this means all those phone calls pouring in to all the HVAC contractors in town are each company’s very own personal customer list, right? Hardly.
Don’t Wait on the Weather
Of the calls you’re getting, 60-65 percent had better be from your customers. Since service calls dominate the incoming leads during peak season, your sales leads will probably be more from breakdown than from current marketing. So far, so good.
However, that leaves 35-40 percent out there in the market, looking for someone to come fix or replace their system. Who are these people?
Well, about 55 percent of those lookers are customers who came from contractors who let customers just walk off and leave, meaning they made no retention effort and just hoped the customers remained theirs. Sadly, that contractor still thinks these are his customers.
About 16 percent of the lookers got an ad or offer and responded. These folks were also plucked right off the database of another contractor. Add that up and nearly three-quarters of all the lookers have come shopping from other contractors’ databases, looking to you for help. Great news, right? Only partially.
If you’re getting 35-40 percent of your calls (lookers) from contractors without a customer retention program, then why isn’t the same thing happening to you? If you don’t have a retention program, it likely is.
Oops. Yes, now I’m talking about you and your customers, who are out calling these other contractors instead of you. Now, do you see why most contractors who wait on the weather also regularly complain that their business has leveled out? It’s not a coincidence.
This is why letting the thermometer do your marketing is not such a great idea. You assume you don’t have to stay in front of your customers. You assume you’re saving money by not following a customer retention program. But if you’re not contacting your customer base or otherwise staying in front of them, you’re losing customers just like everyone else. I’ll venture that it’s costing you more than having the program would.
In technical terms, your old customers have gone bye-bye, and along with them went their business, future business, and referrals.
HVAC contractors are in the costly habit of servicing a customer once and then thinking they’ll stay as customers. Well, they do stay — right in the customer files, rarely (if ever) to hear from the contractor again. If they do, it’s generally to be sold something. That’s not a relationship; that’s an obligation. This habit is costing you a quiet fortune.
Customers come into the files fairly well-announced, but they leave without a hint. You paid $275-325 to get them, yet virtually nothing to keep them. And once you lose a customer on a replacement sale, he’s out of the market for at least eight years. How much is that worth to you? If you think you’re saving money, think again.
Ask any salesperson at your company and they’ll tell you that customers buy faster, accept the up-sell more readily, and they refer more often. Your salesperson is right! Here are a few facts to consider:
• The existing customer’s buying cycle is 45 percent faster than first-time buyer;
• Loyal customers spend 33 percent more than a first-timers;
• Referrals among loyal customers are 107 percent greater than non-loyal; and
• Rate of referral is highest when closest to the point of contact.
These numbers support the need for regular customer contact. Yet customers aren’t getting that from most contractors. Only a small amount of contractors report having a year-round customer retention program. In other words, you can clobber the majority, if you attempt it.
How to Keep Customers
Jerry Wilson, author of “Word of Mouth Marketing,” said that keeping customers is simply a matter of regular communication. Jay Conrad Levinson, of Guerilla Marketing fame, said that a customer newsletter is “the best guerilla marketing tool on the planet.”
A well-run customer retention program has a customer newsletter as its centerpiece. They’re simple to use, quick, and customers keep them around. Best of all, if it is well-written and not purely advertising, you’ll instantly forge a better image and strengthen the relationship. Better relationship equals better retention, period.
Here are five rules your newsletter must comply with:
1) Make it professional. If it looks amateur, then you look amateur.
2) Don’t make it solely about heat and air. Why? You want to inform and entertain, not bore. Likewise, your other information helps position you as an advisor instead of a salesperson, and that’s a valuable distinction.
3) Balance your information with sales copy. Your customers expect to read great information and be sold. Use a more familiar tone in your sales and you’ll do great.
4) Make them regular. Like exercising, it must be regular to be effective. Twice or four times a year is fine. Since you’re getting more customers, this is the one marketing area you want expenses to increase.
5) Combine it with other marketing efforts. Integrate it with your online marketing efforts by using QR codes that become coupons or deeper offers. These are simple to do and make you look instantly more relevant.
Remember, your competition probably doesn’t have a customer newsletter, so you’ll stand out even more if you do.
Publication date: 11/11/2013