Marketing Magic: Silent Profit Killer Hiding in Your Business

October 12, 2009
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Adams Hudson

You can hear it in the phone calls. You may see it reflected in a sloppily clad technician. It often hides in the “meant to” things in your business, still undone.

None cost you a dime, and therein likes the crackpipe of marketing futility. First hit “seems” free, yet costly as heck, continually addicting, recklessly damaging.

It’s customer retention. We all like to think it’s there, working for us because we’re just so darn good at our job. No customer could ever forget how timely, fair, and magnetically unleavable we are. Until they actually leave, taking their business and referrals forever.

Contractors are too often swooned by the cheapness of what I call anti-retention. And in a tumbled economy, the damaging effects are horrifically magnified. What is it?

Put simply, anti-retention is anything that doesn’t help you keep a customer. A few of the most rampant culprits in the contracting world include:

• Ignoring them. This is No. 1. Tattoo this on your forehead.

• Treating non-customers (first time callers) and customers the same: on phone calls, through marketing, add-on offers. Segmenting makes sense, and this is where you start.

• Setting an appointment and being late without a phone call to alert. Do you like it when your appointments are unapologetically tardy?

• Failing to explain what exactly you’ll be doing on the call and what the homeowner can expect. The grunting assumption by many techs as they clomp through a home is not charming. The words rude and irritating come to the minds of those who too often consider this painfully typical.

• Not creating a customer ascension model toward a maintenance program that keeps them comfortable - and you regularly in their homes.

• Expecting but not engineering referrals for your business.

There are more, but you get the picture. Don’t send me hate mail that these don’t apply to you until after you start calling your CSRs, plant customers to watch the service calls, or ask customers how many times they heard from you after the invoice.

ACTION PLAN

The good news is all the fixes are totally in your control. Too often the smug attitude (too costly to consider in this economy) is “Oh, well, these things just happen.” This pervades the HVAC industry until you have a climate of complacency and anti-retention that isn’t just deemed acceptable, it’s expected. Ask your customers. We made 6,000 phone calls last year, and the results were not pretty. Not my job to be telling lollipop stories here.

I can’t think of one thing that will suck the morale, profits, and life from a company any faster. Patricia Fripp, past president of the National Speakers Association put it like this:

“When you lose a customer, you lose two ways: You don’t get their money. Your competitors do.” I’d like to change that slightly to three ways: You lose their referrals too. (How many times do you recommend a business you no longer frequent?)

There’s one awesome solution: take A.C.T.I.O.N. Here is a six-step ACTION plan that can save your business from the evils of anti-retention.

Acknowledge: This is a standard staple of improvement whether you’re in AA or Over Eaters of America. Before you can fix anything, you first have to acknowledge that yes, there is a problem in your business, and yes, it’s causing you to lose customers, waste money, and miss the profit ship. Make out a list of target areas to improve (looking back on comments or complaints is a great place to start).

Change: You know the areas you need to work on, now it’s time to get down to business. If the problem is appearing professional, have a team meeting and address the issue of dress. If it’s poor customer service, hire an expert (Steve Coscia is a great choice). If you have no idea where to start and you’re in the coaching club, that’s what we’re here for - just call! The point is that waiting won’t get you anywhere. You have to start right now to change the environment of anti-retention before you don’t have a business left to worry about.

Team Work: Ever heard that old saying, “The chain is only as strong as its weakest link?” From the receptionist to the CSR, to the technician to the accountant, customer retention is the job of your entire team. It starts with a service mentality. Every single person’s job, first and foremost, is to take care of your customers. When the whole team works together for that single purpose, there’s no limit to what you can accomplish. It’s called synergy, and it works.

Implement: You’ve identified your anti-retention areas, started changing them, and you’ve got the team all together on the same page. Now it’s time to implement proactive customer retention programs. First, that doesn’t mean spending a bundle of money. You spend $275 to $325 to get a new customer, but keeping that customer is a fraction of that - about $3-$4 apiece. My personal favorite retention piece is a newsletter program. You can boost your image, have direct response ads, and reinforce the relationship with meaningful content in one fell swoop.

Ongoing: Customer retention isn’t a stop-and-go effort. This is a complete paradigm shift, which is just a $50 expression for a complete change in your mindset. Going back to the before is no longer even an option. That’s why you’ll notice that I said customer retention program, not event. Make active customer retention a scheduled, automatic, systemized part of your business.

Nurture: Now I’m not going to go all kumbaya on you here. We’re not talking about group hugs and nap times - though that may be your cup of tea. What we’re talking about is nurturing an environment that fosters retention. Reward your employees for retention-minded efforts, and reward your customers for their loyalty. You’ll come out ahead on both counts, and guess what? Rewarding loyalty tends to breed more loyalty. How can you top that?

Free Sales and Marketing Tools of the Month: Get a four-page Customer Retention report called “Who Do Your Customers Think They Are?” and a free newsletter sample from Hudson Ink. You’ll also get an audio seminar called “Customer Retention Goldmine” with your polite request on your letterhead faxed to (334) 262-1115 or a similar e-mail to freenewsstuff@hudsonink.com.

Publication date: 10/12/2009

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