Customer Retention
As you will be no doubt aware, retaining customers is essential no matter what your business. In this article let us have a look at this and try to work at it systematically and objectively, so that the principles learned can be re-used, over and over, to bring success, if not easily then at least a bit more comfortably, with as little stress as possible.
What is Customer Retention?
Let's imagine a scenario:
You are typing an important letter and your computer breaks down. You remember the technical geek you got some help from 6 months ago. You dig out the number, and pick up the phone and start dialing. 5 rings – no answer, 8 – rings, no answer, you are just about to get someone else's number from yellow pages when you hear, “Er, hullo, who is it?” As you begin to speak you hear, “Hang on a minute,” shouts something, says, “Er yes mate?” You try to explain the problem you are having and instead of being reassured that help is on its way, you get told to turn it off and on again and spoken to like an idiot.
If this happened to you, would you ever ring them again?
So customer retention is the way of serving your customer's needs that is right for you and your business, so that they will want to choose to come back to you.
That is part of the answer. The other part of the definition we are seeking is that by putting in place systems to record psychographic data from everyone who comes into contact with your business, you enable a response which is more likely to get your contacts to become customers and your customers to return.
You could envision it like a beneficial cycle, with contacts who get good service remembering when they need to buy leading to them becoming customers. As your business already knows a little about them, an approach to marketing can be tailored enabling a higher chance of making a sale, increasing your bottom line.
The marketing approach followed after making the first sale is important. Lets discuss a few strategies.
Email as a cheap method of reminding your customers to buy from you
You've made the sale or answered the question and you've collected the info, you've made mention of the Data Protection Act on your literature. This enables you to set up one of the easiest and cheapest customer retention tools, the autoresponder, or even simpler, just use email. This method can be kept really short, a few lines in an email or turned into a full blown newsletter with widgets and technical stuff.
You'll agree, email is pretty cheap and don't be fearful of technical wizardry. Try it first, practice makes perfect. Starting with email, learn and thoroughly understand how to use your address book and contacts, how to organise groups and folders, how to put lots of names into the 'To:' field at once. (Quick tip – never put everyone's names and emails into the 'To:' field, instead use BCC which stands for 'Blind Carbon Copy' in case you were wondering and send the message to yourself i.e. your own email address. Everyone gets copied in and their info is kept private.
Alternatively, or once you have mastered the basics, you can simply use what is known as an 'autoresponder' which is like automatic email. These vary in price but £10 a month is reasonable. You will need to be able to organise your contacts into categories like actual customers you just want to remind you are here and really special people who come back every month, or whatever categories you think you might need, basically those who have bought from you and those who haven't, because, think about it, you might not want to send the same message to both groups.
It also helps to be able to write in a way that makes people interested in what's going on in your company so if that's too difficult keep it short and simple so that your readers will think you are being a benefit to them, keeping them informed rather than being a bore.
If you wanted to flex your technical muscles you could develop an HTML newsletter and have all sorts of stuff on there. Whatever your approach to this method of keeping in touch with your contacts and customers remember email can get you into trouble.
Always, always get your subscribers' permission to email them, reputable autoresponders won't let you start sending messages until you tick a box which say 'Use Confirmations' which sends a message saying basically, 'You Subscribed' and asking the recipient to click a link which then starts your message/s. Failure to do so could result in SPAM complaints, eventually resulting in your ISP suspending their service to you.
Another important thing to remember is that a lot of unprofessional people use email and autoresponders to send message after message saying 'this is great, buy it' but we are raising our heads above the rest to success, that's why you've read this far, so don't shove sales speak down their mouths.
For that reason alone it may be wiser to leave emails of all sorts well alone unless you are confident you can do it. So, what other methods of customer retention are there available to those who want to keep their ISP?
Listening
When your customers complain do you do anything, or worse do you never even get to hear them?
If you have a website, set up a comments box so that people may put their suggestions and grievances in a form which:
a) is not very stressful for you
b) encourages honesty about how they really feel, good feedback
c) collects data which can be used to improve your business by helping you develop better strategies
Without a website you'll still want to be able to hear how your customers feel so that you can improve your service and deal with problems that pop up from time to time. You might consider a questionnaire, with every customer filling one in at the point of sale, or if you have a mailing list you can send questionnaires out periodically. Another benefit of taking some info about your contacts.
You can also use the mailing list to tempt previous customers to buy from you again by giving a discount to 'preferred customers.'
As an alternative to mailing your customers you could try calling them on the phone. However you will need to have their phone numbers. If you ring your customers for any reason it is always good to have prepared what you want to say, written down so that you can provide the same service to each one and also it makes it easier if you feel a little nervous.
The Guarantee
It is important that your customers know what they are getting right from the start. When they know their 'rights and responsibilities' from the start of any transaction with your company it is easier and less stressful. Your guarantee can be the place where all of this is set out. Let your customers feel in control by explaining how they get a refund and their options if there is a problem. Your customer service plan should deal with the customer from the first contact, i.e. when they see your ad, through the purchasing process to dealing with any problems or disappointments afterwards. If in doubt, hand a refund out. There is no point forcing unsatisfied customers to give a reason for the refund, as it will cause stress but there is value in trying to find out from them when they are calm. The customer may even be won back to doing business with you again if you get it right.
The time it takes to set out a customer service plan is time that will pay you back over and over as you'll spend less time dealing with things in a way which is not systematic and customers will be pleased more of the time.
Customer retention is about looking after the customers when they are with your company, i.e. they have your ad, get your number, ring you etc. During that time before and after a sale, customer retention is basically about good customer service, giving a decent service so that they know what to expect, dealing with refunds promptly and with as little fuss as possible, explaining the situation. To put it in another way, here is what Colin Barrow, author of 'Starting a business for Dummies,' has to say:
'The key elements of you customer service plan should include:
Initial Contact: The customer's first contact with staff creates a lasting impression and can win and sustain customers. All your staff need to be aware of how to handle enquiries quickly and competently. They should know how to leave potential customers feeling confident that their requirements will be met.
Information Flow: Keeping customers informed of where their orders are in the process influences their feelings about the way you do business. Your action plan needs to specify each step of your process: quotation order confirmation delivery notification installation instructions. A regular flow of information throughout this period makes your customers feel that they matter to you.
Delivery: Delivering the goods or service is a key part of customer service. Your product needs to be available in a timely manner, delivery lead times must be reasonable, and the delivery itself must be in a way that meets the customer's requirments.
After-sales Support: Good coverage in areas such as maintenance, repairs, help-lines, upgrade notification, instruction manuals, returns policy and fault tracing help customers feel that you care about their total experience with your products and business.
Problem Solving: Often the acid test of customer service: your staff need to be able to recognise when a customer has a real crisis and what your procedure is for helping them.
High customer service standards enable many firms to charge a premium for their products. Yet in many ways, good customer service can be a nil-cost item. After all it takes as much effort to answer the phone politely as it does with a surly and off-putting tone. So improved customer service is one route to increased profitability.'
The standards mentioned above fit for home business too. Yes maybe on a smaller scale, and maybe your customers don't want to have satellite tracking for their mail order products, but the ideals are true and making them applicable and implementing them to improve your business is the next step for you to take.
