Don’t Ignore Them: Customer retention leads to increased profits
Customer retention — we all know it’s important, and we all know we need to do it. So why, then, do so many contractors spend time and money reeling in customers and then ignoring them once they’ve done business together? Once we’ve got them, we’ve got them, right? Not so much.
There was a day when consumers’ choices were limited, but that has changed. Not only do we as consumers have more choices, but we have higher expectations. Plus, with the online market-place, we can get virtually anything we need or want with a click or a swipe. So it is even more important for contractors to work hard to get customers and then work even harder to retain them.
I can throw around a lot of stats to help you see the value in your current customer — they spend 33 percent more than new customers, they are more likely to give referrals, it costs less to keep them than acquire new customers. But the real stat that should convince you is this: increasing customer retention by five percent has the potential to increase profits by 25 to 95 percent.
Now that I have your attention, here are a few steps you can take to help increase customer retention.
Give Them an Experience
Take your customer service to the next level by evolving it to a customer experience. Serving your customer is great and logical, but giving them an experience taps into their emotions, leaves a longer-lasting impression and creates a greater likelihood of a positive review and referral. After all, buying experiences are influenced by how the customer feels they are being treated and in most cases a modest increase in customer experience can increase revenues by more than a third.
Evolving your customer service to a customer experience will take buy-in from your whole team. So make sure you talk to your CSRs, DSRs and techs. Help them understand the importance of immediately setting the tone and creating a customer experience. Because the customer experience begins with the first call and runs through dispatch, to the door mat to options to the Happy Call. Each step touches the customer creating a brand experience and lasting impression of your company.
Get to Know Them
Knowing who your customers really are will help you drive specific and relevant messaging. You will know what resonates with them, what their needs are and what motivates them to act. Knowing your customers will allow you to begin building a relationship with them, driving loyalty and retention.
It will also let you identify your best customers. Many of us know the 80/20 rule, where 80 percent of your revenue comes from 20 percent of your customers. In all likelihood this 20 percent is made up of your best customers, so it is critical to know who they are and how to keep them.
Identifying your good, better and best customers will help you know where to put your focus, energy and money, and it will give you guidelines on how to get these customers to trade up (good to better, better to best) which will help increase your profit. Identify your customers by segmenting your database and assigning your customers to the right bucket.
Segmenting your database can seem overwhelming, but it doesn’t have to be. So start simple. Separate the Service Partner Plan customers from the regular customers. Then look at the frequency of use and annual spend of the customers. Then dig into job history, age of equipment, if they’re using one or all of your trade services, etc.
For those who are already doing this, dig deeper. Ask your CSRs and techs to provide any and all information they get from customers in their conversations and in the explore step. Are they married? Do they have children or pets? Does anyone in the house suffer from allergies or asthma?
The more you know about your customer, the more you can speak directly to them, delivering the ultimate customer experience. You care enough to engage with them in their life.
Talk to Them
The old adage, “out of sight out of mind” is especially true in our industry. Our customers call us when there is an immediate need, so communicating with them consistently will keep your company top of mind. It will increase the chance your customer will call you, and not your competition.
Also, let’s be honest, not many customers are thinking about their plumbing. But, when done correctly, your marketing can influence customers to start thinking about their plumbing, electrical, heating and cooling needs. Make sure your communication with them provides valuable and relevant information such as industry and homeowner tips, service and product promotions, and even simple fun facts or recipes to brighten their day.
Developing an ongoing relationship with your customers increases their emotional connection with your company, building trust and creating customer loyalty. And loyalty is a key to customer retention.
One last note, if you’re not in touch with your current customers at least four times a year, you are at risk of becoming irrelevant and losing them as a customer.
Thanking your customers is so simple, so important and so overlooked. No matter the size of the job, it’s important to thank each customer for choosing you, trusting you to enter their home and allowing you to serve them.
And don’t email them a thank you or generate a generic letter — continue their good customer experience by taking the time to handwrite your thank you. Even if you’re a paperless company, a handwritten thank you note is a rarity these days and will go a long way in delighting your customer, ultimately driving loyalty.