6 Low Cost Customer Retention Activities You Should Be Doing

Transcription

1 6 Low Cost Customer Retention Activities You Should Be Doing w w w. u n i v e r s a l f u n d i n g. c o m

2 With so much recession-recovery advice out there, it is easy to get confused about which strategies will actually benefit your business and which could be fatal mistakes. The slower than expected recovery with the economy is hurting most businesses, so it s natural to seek out suggestions that might give you an advantage over the competition. Carefully consider which ideas actually apply to your business model and industry. Our goal is to give you some tools for assessment and directions for low cost solutions that will nurture your best customer relationships. ANALYSIS One strategy to help any business survive and grow during this recovery is to focus on improving your customer retention practices. Always start with a good look at your business plan, then a careful analysis of your company s weaknesses. What area of your business needed some improvement before the recession? Are those areas still in need of some attention? If your customer service has always been exceptional, don t lose focus on that strength. Your existing customers are the most important customers, especially the 20% that are responsible for 80% of your sales. Whatever direction you choose to target your reform efforts, don t lose sight of the customers you already have. A natural reaction in this recovery is to cut costs, which is what your customers are doing too. They are probably not averse to finding a better price elsewhere, especially if you re not providing a quality follow through. At this critical time, you must not only keep an eye on what the competition is doing, but you need to upgrade your customer service practices as well. Customer retention is directly related to employee retention, so staff must be involved at every level of this process. You need them just as much as you need your customers. Your staff must be on board for these improved measures to take hold and stick long-term. Hold regular meetings that involve review of the day-to-day interactions with customers, emphasizing the positives and discussing how the negatives can be turned around. Show your employees that you care about them as much as you care about your customers. Customer retention is

3 directly related to employee retention, so staff must be involved at every level of this process. You need them just as much as you need your customers. Perform a gap analysis on your customer service program in order to compare your actual performance to your potential performance. You can make this analysis as in-depth as you want, but the basis should be in the questions: Where are we now? and Where do we want to be? One way to assess your current standing in terms of customer retention is to take a look at what percentage of new customers return for repurchases and how long each of your regular customers has been a repeat buyer. Are these figures where you want them to be? FREE ASSESSMENT TOOL A very useful free tool offered through Sales Training International is their Customer Service Diagnostic Questionnaire. This assessment can help you determine where your company is excelling with customer service and where some adjustments should be made to elevate the customer experience. Now that you have an idea of what areas could use some work, let s take a look at the 6 low cost activities to retain your current customers.

4 1. PERSONAL TOUCH One way to nourish your customer relationships is to make personal contact with each one and find out how they re doing. Because you may not know they re shopping for a better deal until it s too late, be the one to make the first contact. Let them know that they re important to you and your goal is to keep their business. Listen to your customers challenges and make note, so that you can find a way to provide them with a solution. Listen to their challenges so you can find a way to provide a solution. The power of saying thank you is often lost in the casual way we toss around the phrase. Everyone says it, even when we don t mean it, yet it s a powerful customer retention tool. One way to show your customers that you really mean it is to write them a letter or acknowledging their importance to your business and thanking them for their patronage.

5 2. SURVEY SAYS Conduct a survey to collect as much information as possible, paying particular attention to each customer s purchasing cycles. You ll be clued into something being wrong if they don t order at their usual time and you may be able to work something out before they seek out your competitor s services. Give this survey to each of your employees as well and ask them to fill it out as if they were a customer. Don t be afraid to ask your customers what other vendors are doing to retain their existing clientele. Don t be afraid to ask your customers what other vendors are doing to retain their existing clientele. Customers are likely to tell you what keeps them coming back to a business, especially if they can see that you are open to suggestions. The more you listen to your customer, the more you will learn about how to fulfill their needs and keep their business indefinitely. When you do the simple task of asking your customers opinion of your business you earn immeasurable marks in reputation that could lead to continued business, an increase in business or even a referral for new business.

6 3. INCENTIVE OFFERS As evidence of your appreciation to your most loyal customers, offer a discount or incentive to encourage larger or more frequent orders and referrals. You may also take the opportunity to propose a trade of services with your most loyal customers in order to mitigate costs and work together through hard times. Is there a way for you to partner with those customers in your marketing efforts by distributing each other s coupons or holding a promotional event together? Mutually endorsing one another s business is not only marketing gold, but a demonstration of reciprocal loyalty. Create an incentive program for your regular customers who have proven consistent purchase and payment cycles. Perhaps offering extended payment terms or discounts to these reliable customers will help cement their loyalty to your business. During this recovery with credit as tight as it is, this offer can be a life-saver to companies that may be experiencing shortages in their cash flow. This will also entice your new customers to be consistent with orders and payments to obtain these offers and discounts. Working with an accounts receivable factoring company can help alleviate the risk of offering extended terms to your customers without affecting cash flow. Offering credit terms is a very valuable customer retention practice, but it can be risky if you don t perform your due diligence first. You ve just offered a great incentive to your customers but you may be jeopardizing your own cash flow. Working with an accounts receivable factoring company can help alleviate some of this risk so you can offer extended terms to your customers without negatively affecting your cash flow.

7 4. REPACKAGE Sometime all the incentives and offers can t cushion you from the risk of losing a customer because of their tight budget. Repackaging your product or service might be a good way to keep their business as well as attract new customers. An example of this smart move is Sunrise Software, which repackaged a software and training program in order to cater to recession Add something to your product or service to provide a comprehensive bundle; it may be what keeps a customer from turning to the competition. affected companies. The promotion emphasized the benefits of upgrading while adhering to a recession-adjusted budget. Value-added services can be extra perks at no additional cost or part of a package deal that involve discounts based upon a combination of services. If you can afford to add something to your product or service to provide a more comprehensive bundle, it may be what keeps a customer from turning to the competition. Providing a written comparison between your product/service and your competitors is a good strategy to prove the value and benefits that your customer is receiving by staying with you.

8 5. REFERRAL PROGRAMS There are many ways to strengthen your customer relationships to the point that they would never consider going to your competitors. Nurturing that relationship will naturally encourage your customer to help build your reputation. To encourage this type of branding, you could offer referral incentives to customers who send new business your way. The best prospective customer is usually the one who has been referred by word-of-mouth, but you definitely won t be getting that kind of a favor from customers who aren t pleased with your service. Author and marketing expert Seth Godin suggests in his blog post Welcome to island marketing, that every business must act as if it were on an island where everyone knows one another so that every interaction matters and every customer is precious. Customer service is the most important part of your marketing efforts because everything you do sends a message about your business and can affect the occurrence of repurchases as well as word-of-mouth, both good and bad. Let your loyal clients do the work for you. The goal here is to manage your reputation by creating satisfied customers who will generate business for you so that your business activities and budget is focused on the quality of service as opposed to being focused on drumming up new business. Let your loyal clients do the work for you.

9 6. SOCIAL MEDIA & REPUTATION Speaking of reputation, Godin says that you can no longer burn through the market in this age of global communities, which are knitted together through online social media. The new wordof-mouth is called viral marketing and it spreads fast and far. One little digital message is all it takes for your name to become a hashtag in this small world. Twitter, Facebook, LinkedIn, Google+ and other social networking sites have made the world an island that you can be exiled from if you re not careful. Case in point: the Twitter post by a former tenant that inspired Horizon Realty to sue her for libel to the tune of $50,000. Although the post originally went to only 20 followers, that audience is much, much bigger now. When a journalist asked if Horizon had spoken with the tenant about the post or asked her to take it down, the company s representative said, We're a sue first, ask questions later kind of an organization." Well, I don t need to tell you what just happened to the general public s opinion of that company. Who would want to do business with a company that puts out the statement that they are litigious and their customers are not exempt from being targeted?! How you react to negative feedback has the potential to strengthen your relationship with current clients and makes it possible to win over new customers in the process. Be mindful and strategic with what you say to customers across all mediums. The more thought out and less reactionary your responses, the better your reputation comes off across the social media waves. How you react to negative feedback has the potential to strengthen your relationship with current clients and makes it possible to win over new customers. It is an opportunity to rise to the occasion rather than just a lost business opportunity.

10 CONCLUSION Reaching out to your customers and integrating their feedback into your customer retention policy will help your company be a better business all around. So, if you can t reduce prices or repackage your products and services, you may be able to keep your customers by the strength of your relationship. The recession has made innovation a must and businesses that don t make changes will not make it through the recovery. By considering some of these low cost retention activities, you ll be fostering a long-term relationship with the people and companies that keep your business running through this economic recovery. ABOUT UNIVERSAL FUNDING CORPORATION Since 1998, Corporation has provided clients in the printing & publishing, manufacturing, oilfield & energy, trucking & transportation, and staffing & personnel industries with personalized accounts receivable factoring services. We are a full service factoring company that does not outsource any of its support staff. We handle all underwriting, approvals, contracts, fundings, and accounts receivable management in-house. We know our clients and build a true business relationship with them.