”Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.”
Experts believe that companies in the service industry could raise their profits by 100%, if they succeed in stopping 5% more clients from going over to the opposition. Research was carried out in order to establish the cost of one lost client and the contribution long-term clients make towards covering costs.
A credit-card company discovered, for example, that £51 must be spent to win one new credit-card customer. In the first year, the client makes £30 profit for the company, and in the fifth year £55. The five year profit runs to £220. An industrial cleaning firm earns £980 per client in five years, a wholesaler £577 and an auto repair workshop £306.[/i][/b][/i][/b]
Loyal, long-term customers are also good publicity. Locally, clients will frequently perform an invaluable word-of-mouth publicity for your product or for the service you provide. Building societies found that someone else recommends every third house buyer.
1. Collect as much information as possible on each of your customers. Ascertain the sector, the requirements, the sales habits and trends, expansion, proportion of costs going on salary and on materials, as well as the profitability of the customers. If customers "jump ship", check your data to see whether the customers belong to a particular category - for example, a group of companies which uses an above-average amount of materials.
Both employees in dispatch and in the warehouse as well as in production and sales departments must be made aware of this fact. Ensure every member of the company's managerial staff works in the customer complaints department or in the customer claims department at least once a quarter. Do not allow any customer to just walk away. Look out for the warning signs. By talking to the client, discover where you can throw the "life-belt".
Perhaps we need to rethink our marketing and sales strategies, after all many experts will tell you that it's five times more profitable to spend marketing and advertising dollars to retain current customers than it is to acquire new customers. In years past the importance of focusing on customer retention was not as important, stickiness came naturally. We shopped in our neighborhood shops and our corner grocery stores. We had a personal connection with our service providers and the thought of shopping at another store would have never crossed our minds.
To achieve the objectives of the database and customer retention programs, the entire campaign should be designed and carried out with the customer in mind. The exercise will only be effective if the customer recognizes and associates some value with being part of your database. If they do not perceive value in your program all of your communications, coupons, special offers, and newsletters will be discarded. Your customers have been inundated with meaningless "junk" mail and email spam, so embed your campaign with value.
When you consider that the last two make up the majority of why a client or customer will no longer use your service or buy your products - it can be a hard pill to swallow. After all it means they are an inactive client because they felt you didn't care about them and your competitor did.
While a growing business needs to constantly capture new customers, the focus and priority should be on pleasing your existing customer base. Companies that fail to nurture and retain their customer base ultimately fail. You will also spend twice as much to get new clients as you will in maintaining your existing customer base. You will also be limited in your ability to attract new clients if you can't hold onto and satisfy your existing customers and clients.
The bottom line is that one of the key components in marketing and business growth is to spend the majority of your time and effort nurturing customer relationships, so that you get business from existing clients and customers.
Experts believe that companies in the service industry could raise their profits by 100%, if they succeed in stopping 5% more clients from going over to the opposition. Research was carried out in order to establish the cost of one lost client and the contribution long-term clients make towards covering costs.
A credit-card company discovered, for example, that £51 must be spent to win one new credit-card customer. In the first year, the client makes £30 profit for the company, and in the fifth year £55. The five year profit runs to £220. An industrial cleaning firm earns £980 per client in five years, a wholesaler £577 and an auto repair workshop £306.[/i][/b][/i][/b]
Loyal, long-term customers are also good publicity. Locally, clients will frequently perform an invaluable word-of-mouth publicity for your product or for the service you provide. Building societies found that someone else recommends every third house buyer.
1. Collect as much information as possible on each of your customers. Ascertain the sector, the requirements, the sales habits and trends, expansion, proportion of costs going on salary and on materials, as well as the profitability of the customers. If customers "jump ship", check your data to see whether the customers belong to a particular category - for example, a group of companies which uses an above-average amount of materials.
Both employees in dispatch and in the warehouse as well as in production and sales departments must be made aware of this fact. Ensure every member of the company's managerial staff works in the customer complaints department or in the customer claims department at least once a quarter. Do not allow any customer to just walk away. Look out for the warning signs. By talking to the client, discover where you can throw the "life-belt".
Perhaps we need to rethink our marketing and sales strategies, after all many experts will tell you that it's five times more profitable to spend marketing and advertising dollars to retain current customers than it is to acquire new customers. In years past the importance of focusing on customer retention was not as important, stickiness came naturally. We shopped in our neighborhood shops and our corner grocery stores. We had a personal connection with our service providers and the thought of shopping at another store would have never crossed our minds.
To achieve the objectives of the database and customer retention programs, the entire campaign should be designed and carried out with the customer in mind. The exercise will only be effective if the customer recognizes and associates some value with being part of your database. If they do not perceive value in your program all of your communications, coupons, special offers, and newsletters will be discarded. Your customers have been inundated with meaningless "junk" mail and email spam, so embed your campaign with value.
When you consider that the last two make up the majority of why a client or customer will no longer use your service or buy your products - it can be a hard pill to swallow. After all it means they are an inactive client because they felt you didn't care about them and your competitor did.
While a growing business needs to constantly capture new customers, the focus and priority should be on pleasing your existing customer base. Companies that fail to nurture and retain their customer base ultimately fail. You will also spend twice as much to get new clients as you will in maintaining your existing customer base. You will also be limited in your ability to attract new clients if you can't hold onto and satisfy your existing customers and clients.
The bottom line is that one of the key components in marketing and business growth is to spend the majority of your time and effort nurturing customer relationships, so that you get business from existing clients and customers.