What changes things for us is usually not some new radical thought or revolutionary idea no one’s ever proposed before. It’s when we finally put time-tested advice we’ve heard hundreds of times into practice that our lives are changed. The home comfort industry will always have peaks and valleys, but how low the lows are is an indicator of the relationships (or lack thereof) you’ve built with your customers. When your customer base feels a connection to you, they’ll help carry you through the valleys. But if they don’t, you’ll spend the offseason just trying to survive.

Our motto for years has been, “The three most important words of business success are retention, retention, and retention,” and that’s as true today as it was at the beginning of capitalism. Whether through their own needs or through their referrals, your current customers hold incredible unlocked potential, and a strong customer retention program is among the most important marketing efforts you can have.

The Cost of Leads

No one will ever argue that new customers and first-time home visits are important to growth, but when you think about your most valuable business assets, your existing customer database is No. 1 on that list. Once you land a lead — of any type, closed or not — it should be entered into your database and categorized. Every lead is data entered for current and future marketing — because if you’ve got a name, you paid for it one way or another. The average cost for a new, first-time lead these days is $225-$350. On average, it costs businesses eight times more to acquire a new customer versus getting follow-up business out of an existing one. Then when you factor in your closing rate and what price cutting or bars you had to lower to get that lead originally, you’re likely losing significant money on that lead if you never go back again. It’s a harsh reality, but without proper retention strategies in place, it’s better for you to have never received most leads in the first place.

What Retention Means

Customer retention is the step beyond mere transactions, addresses, and dollar signs; it's about creating meaningful relationships with customers that extend beyond an invoice. Research shows that people crave a connection with those they do business with and desire to feel like their business matters to the company. Contractors experience an average 11% average attrition each year from their database, meaning for every 1,000 homeowner addresses you have, you’re losing 110 each year. Some of these are unavoidable due to people moving out of your service area or deaths. But the largest chunk of that pie, 7% (70 homes for every 1,000) leave because they felt you didn’t value them enough to earn their future business. We tend to think the majority leave us due to being upset or price shopping, but, statistically, that’s not the case. The bad news is that kind of loss can be crippling to a company when ignored. The good news is that it can be slowed with some simple tender love and care (TLC).

Personalization and Tailored Experiences

As some of the largest corporations in the world are discovering, one-size-fits-all approaches are no longer effective in the marketplace. People want to be seen as people, faces, and personalities rather than just a means to an end. Businesses that personalize their interactions and offerings based on individual customer preferences and behaviors are more likely to retain customers in the long term. Utilize customer data to segment your audience and deliver tailored experiences that resonate with their needs. This goes beyond birthday cards and neighborhood radius mailings, too. Up the game into personalized recommendations based on previous work and cross-sells. No shoppers want to wade through endless pages of things they aren’t interested in to get to the one page they are. Use the data you have to build a customer profile, enabling you to market to them more effectively.

Loyalty Programs and Incentives

Implementing loyalty programs that reward customers for repeat purchases can significantly boost retention rates for you. These programs could include exclusive discounts, early access to new offerings, or incentives for referring friends or family your way. This works for you in many ways:

• Customers feeling valued keeps them engaged;
• When they refer friends they’re marketing for you and are now invested in your success with their loved one; and
• Loyalty programs generate a natural buzz about your company.

An Open Forum

Now, this one may not be for the faint of heart, but people want to be heard, and the quickest way to show you care about your customer base is to stop talking and start actively listening. For this to happen you must give them an easy way to provide their feedback and have a response system in place. Contrary to popular belief by some of you begging for reviews, most customers are more than willing to give you glowing praise for your top-notch work, but they just haven’t been asked or given an easy way to do so. And you can also give those who are most vocal about a complaint a chance to air their grievance (and for you to fix it) before it goes to Google for all eyes to see. Listening to customer feedback and actively working on improvements demonstrates your commitment to their satisfaction. Conduct surveys, pursue follow-up, and humbly use this input to enhance your products or services. Effective marketing should be a two-way conversation. When customers see their suggestions being implemented, they feel valued and are more likely to stick around.

Regular Communication

And finally, the most important part of this is taking stock of how often your base is hearing from you and what you’re asking of them when they do. Maintaining regular communication with customers keeps your brand top-of-mind, but it goes beyond that. If the only time customers are hearing from you is when you’re asking them to buy, then it won’t be long before the relationship (if I can even use the word here) will be seen as one-sided and predatory. Your communication level needs to be regular enough to keep you recognizable but also with enough valuable information to establish your company as a trusted friend, rather than just another business after their money. According to the BBB, a healthy business to prospect relationship consist of 10-12 “quality touches” for every sales solicitation they receive. A quality touch is communication that adds value to the homeowner and aids in their buying decisions while also establishing you as the trusted expert.

In the age of empowered consumers, mastering the art of customer retention is essential but can also seem completely overwhelming.