Seems that buying low and selling high is going around. I think you can buy Charter Cable for $29 right now. No, not the monthly service … the entire company. But if you’re a MicroSoft co-founder, losing $7 billion is taken slightly more casually than someone else, like say Sweden.
We all like bargains. But “cheap” people - those who consider price as their sole purchase parameter - only comprise about 4-7 percent of the buying public depending on whose figures you like. (Funny, they seem more numerous because they’re so annoying.) Yet, to be a real bargain to those we call humans, the value must greatly exceed the price.
A tip for the sales and marketing people out there before we move on. Quit positioning your things in a commoditized/shoppable way. How? Bundle your items and services in a way that gives high-perceived value, making bargains more achievable, less shoppable. An example is adding coupons for future service or products can have a value of say $200, but only if something is purchased, thus raising the value and bargain quotient, while you secure another sale. You’re welcome.
Now, back to the story. Last month we discussed marketing balance. You must balance your exhaustive, costly, yet highly rewarding lead generation marketing with its counter-point: keeping those customers. It is the keeping that is so grossly overlooked in contracting, but it is the marketing Holy Grail.
FREE PSYCHO-ANALYSISLook, I know why you don’t do it. There’s an 88 percent chance you’re male. We hunt. We kill. We eat. We grab wife by hair and drag out of way of TV set, preferably toward the kitchen. (I sense punishment coming my way.) In other words, we’re fairly rotten in our keeping habits. I lose remotes while actually holding them.
We’re naturally poor at customer retention. Don’t tell me, “Oh, I send them an invoice, a tune-up reminder, and a refrigerator magnet” like that’s supposed to endear my service work to you. It won’t.
You’ve got to make your customers want to remain such, make them happy referral sources for you, and make sure it doesn’t take them a second to come up with your name. For most contractors, the above happens only as an accidental by-product of either good memory or chance, scarcely by system. You can’t take chances anymore.
HVAC sales have slipped and wiped out some competitors. Offering credit for big-ticket items used to grease that sales close, but now credit availability has tightened that up.
Customer retention marketing for your credit-worthy, proven buyers cannot remain an oversight, especially while hungry (even desperate) contractors are lining the streets for a shot at your customers. Your retention efforts have never been more valuable.
Two funny points about a solid retention program:
1.They cost 1/6 what it takes to acquire a customer, and
2.The rewards are higher transaction sizes, faster sales cycles, and more referrals. (Pure customer acquisition by the way, generates zero referrals.)
What I’m getting at is, customer retention is a real bargain.
MOST RELIABLE SOURCE OF INCOMEYou cannot buy a list better than the one your customers have already paid to join. In our work with 14,000 contractors or so, the evidence is indisputable. Retention marketing (a.k.a., marketing to your current customers) can transform a contractor from struggling to the elusive next level.
Now, maybe you’re asking, “Why would I spend marketing money on customers that are already mine?”
First, they’re not yours unless they know you’re theirs. Many contractors have the misguided notion that if you call on a customer once - do a great job, provide a great deal - you become their contracting company. Not quite.
You have to keep your company’s name in front of your customers. We all forget things all the time. Imagine how quickly customers can forget your company’s name without additional contact. It can and does happen almost as soon as they close the door.
You’ve already made a sizeable investment of time and money in getting the customer. You can keep them for a few dollars, or lose them for free. Your choice.
SO HOW DOES IT WORK?Retention marketing is about the relationship, pure and simple. It’s strengthened by good service and regular contact. It is weakened by either no contact, or purely for commerce. Building the relationship can be very simple.
•A thank you note.How many contractors do this? Few. You’d be an instant standout, reinforcing what you hoped to build in the service call. The thank you should come from the salesperson and/or the company owner/president. Then, if you’d like to increase your investment just a little bit more, how about including a …
•Refrigerator magnet.Your company’s name and contact info in the customer’s home 24/7 is a pretty good way to remind them that you’re their contractor. While the refrigerator is frequently traveled territory in most households, what about the equipment you’ve come to repair or replace? Try a …
•Equipment sticker.When a customer has a problem with heating or cooling, or hears a funny noise, the first thing he does is look at the system. He has no idea what he’s looking at, but he’ll still open whatever door and look at it. Same for the thermostat. You think your company name and telephone number would help him here? If he’s unable to fix it (yeah, right), maybe consider…
•Service or product discount coupon.Including a coupon as a thank you virtually ensures you get the next call. (Your goal is to keep them out of the Yellow Pages!)
These are mostly transaction-driven, yet for year-round retention, get ready ...
KEEP CARDS AND LETTERS COMING!If you want to stay in your customers’ mind, they must hear from you regularly. This includes holiday cards, periodic customer-only offers, plus the top dog of retention: the tried-and-true customer newsletter. This fairly small marketing investment pays dividends many times over. Newsletters should be automatic, which means twice or four times a year, without fail.
One caution: This is a marketing piece, but it’s not a hard-hitting sales piece. It is to position you as a trusted advisor, who by the way outsell salespeople 4:1. Most newsletters entirely miss this point. You can and should include ads and coupons on the back as a favor to your customers.
A customer retention campaign investment will range from a minimum of 8-10 percent of the total marketing budget. The average HVAC Yellow Page budget is five times higher! (Gosh, wonder which one will pay the higher return?)
Retain your customers, knowing they’ll spend 33 percent more than first-time callers, and refer you 107 percent more often. Retention marketing also opens the door for maintenance agreements and a variety of upsells. Even a caveman knows that.
NEWS Reader Freebie Bonus This Month:Get a free 4-page Customer Retention Report and Free Newsletter sample. E-mail your request to firstname.lastname@example.org or fax your polite request to 334-262-1115 on company letterhead and it’s yours. You can also call 800-489-9099.