Traditional marketing is all about building awareness for products and brands. In traditional marketing, the emphasis is on getting new customers and very little attention is paid to retaining existing customers. According to best-selling author and marketer, Stan Phelps, traditional marketing is dead. Instead, it’s time to focus on retaining customers.
The data backs Phelps’ claim up: according Gartner research, decreasing customer churn by just 5% can increase profits by 25%-125%. The reason is that it is expensive to get new customers—it’s much easier and more sustainable to keep your current customer and sell them more products.
Phelps discussed how to do this at the last meeting of the NJ Chapter of MENG (Marketing Executives Networking Group). It all boils down to doing that little extra for your customers—like what one Panera store did this summer when it went out of its way to make a bowl of clam chowder for a young man to take to his grandmother in the hospital. The story wound up on Facebook and it has almost a million likes now!
Panera got great exposure and lots of good will from its simple act of kindness. Going the extra mile for your customers sounds like common sense, but it is far from common practice.
Panera is obviously B2C, but their model has applications for B2B as well. For example, when you send shipments out, pack the boxes in the same order that the manifest is written. Also, take good care of your channel distributors and they will pass the love on to their customers—a.k.a. your end users!
Here are some things Phelps suggests to give customers that little extra:
Follow up with your customers. This is a really easy way to get started. Call your customers up after they buy from you and ask them if they are happy with the product/service and see if there are any issues you can clear up for them.
Write thank you letters to your customers (hand write them for extreme bonus points!). Writing thank you letter is becoming a lost art today—which makes them very powerful tools when used. Want to retain customers? Thank them for doing business with you!
Handle mistakes well. It is inevitable that you will make a mistake at some point. How you handle that mistake is very important though: don’t just make it right for the customer, go above and beyond. If you do above and beyond to rectify a wrong, you can actually form a stronger bond with the customer than if you had never made the mistake.
What might this look like in action? Well, for home health service provider Nurse Next Door that means they hand deliver fresh baked apple pies to customers when something goes wrong. Nurse Next Door spends about $1,500 a year eating humble pie (literally!), but they estimate that they save about $100,000 in business from going elsewhere. That’s some pretty good ROI!
Value add. Is there a small extra you can add to your service or product for your customers? For example, when Safelite AutoGlass replaces windshields in cars, they also clean the customers’ cars for them. See, it takes time for the windshield glue to dry, so rather than just sit around and do nothing while the glue dries, Safelite technicians put away their tools and take out vacuums and clean the car. Safelite has time since it has to wait for the glue to dry and the put it to use.
Waiting… In business, waiting is often as inevitable as it is annoying. But, it doesn’t have to be annoying. If you can provide some extra service or product while your customers are waiting, then they will be very happy. For example, burger chain Five Guys has boxes and boxes of free (and delicious!) peanuts for customers to nosh on while they wait for their burgers.
Make a good first impression. If you’ve been around long enough, chances are you have heard the cheesy pick up line, “do you believe in love at first sight—or should I walk by again?” That may or not work in romance, but it certainly does not work in business. Customers form lasting impressions right away, which is why it is so important to make a good first impression.
If you have ever stayed at a DoubleTree Hotel, you have enjoyed a delicious first impression: starting in the early 1980s, DoubleTree began a tradition of serving warm chocolate chip cookies to customers when the check-in. At the time, it was common for hotels to give cookies to VIPs, but DoubleTree said “all our customers are VIPs,” and today, they have sold 250 million of these cookies. These cookies are quite popular –a fact noted by the New York Times and by the 4.2 million hits a Google search for “DoubleTree cookie” brings up.
Take care of your customers and look for ways to give them just a little extra. You might be surprised at how well your customers respond!