We add one client and then we lose one. There’s no real growth to maintain customer loyalty. We have never done a campaign push to grow the maintenance side of our business. Should we focus there? And if so, how do we do it?
Thoughts of the Day: Consider the effort to maintain customer loyalty vs. getting new customers. Make sure that the business lines you’re growing have long-term value. Teach your employees about how valuable repeat customers are to the business, what that means to the company’s well-being long term, and what they can do to help.
Build and maintain life-long customer loyalty
Selling to new customers is time-consuming and costly. Why not instead focus on revenue that comes from keeping customers year after year. Pay attention to your renewal process and watch the dollars roll in. That includes putting someone in charge of keeping customers on board.
Run the numbers on profits from renewal customers. Usually, it is higher than initial sales profits, after accounting for all delivery and installation costs and sales commissions. Think about the sale value of your business. A book of customers who keep renewing is a valuable asset.
Put customers on a schedule
If possible spread costs out over the months of the year, so there’s not a big shock every 3, 6, or 12 months. Get a credit card on file to put charges through, with an automatically renewing service agreement and an annual escalation percentage. Offer customer service for free or at a huge discount the first year, to get the process started. Create levels of service, to give price-conscious customers options.
Attract, acquire, and retain customers
Think about customers in decades, instead of as one-time acquisition events. One of the best ways to improve value is to fundamentally connect with ways to improve people’s lives. Making it easier for customers to maintain a working system, and to get service when needed, is a value add. So is staying in front of the customer so that they don’t have to go searching for a service solution. The third way to create value is to regularly add services that customers are looking for. Make it your mission to add a new service or service enhancement every year or two.
Set two goals each year for renewals, one for converting new customers to renewals and one for retaining existing renewals. Then think about a third revenue opportunity, to sell something additional to those recurring customers.
Create value-added opportunities
If your company hasn’t sold a lot of maintenance contracts, take a look at how many of last year’s customers fell away, and why. Are people moving away, or otherwise no longer in need of your services? If so, who is taking their place and how do you tap into those new potential buyers. How many are left because of dissatisfaction? How many left because they didn’t hear from you, or you weren’t relentless enough with the follow-up.
Take a look at what your competitors are doing to keep or shed customers. Sometimes another company’s throw-aways can be your mana from heaven. Looking at their retained customers, you may find clues to their success that you can adapt.
At the heart of most customer retention programs is customer interaction. How many of your customers rave about their experiences with your employees? Explain to employees that continuing revenue from current customers makes the company more stable and profitable, which in term contributes to employee retention and pay increases.
Show employees the link between making sure every customer’s products or services are in top working order and the likelihood that customers will stick with your company long term.
BOOK RECOMMENDATION:
Looking for a good book? “The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue“, by Robbie Kellman Baxter.
