Maximizing Profits By Retaining Customers
Your BEST Customers Are Repeat Customers!
Several Reasons Why You NEED To Nurture Customer Relationships
You have heard the statistic that it is five times easier and more profitable to sell more to existing customers than to develop new customers.
Do you believe this? Can it be true? It is true and it is due to human nature and not marketing.People simply like to buy from people that they know and trust. Once they have made one (satisfying) purchase, it is easier and less trouble to buy more than to research other sources, set up new accounts, become familiar with new company personnel, and change brands.
And yet most businesses do next to nothing to stimulate repeat business or develop a deeper relationship with their customers.
Companies routinely spend a significant percentage of their gross revenue to acquire new customers. The extreme (worst?) example is Super Bowl ads that cost tens of millions of dollars! Companies typically have large departments dedicated to “marketing” – which is another way of saying advertising. In addition, these companies contract with “ad agencies” to create campaigns – and pay them 15% of the multi-million dollar budgets to create these ads (which often are silly and leave no lasting memory of the product they are supposed to promote!)
Likewise, “sales departments” typically concentrate (and reward) on the development of new business.Another question: will your existing customers recommend your business when someone they know needs your services? Satisfied customers – when asked – will refer other customers!
What does it cost to ask for referrals? Often NOTHING!
Did you know that customers that result from referrals are the most loyal and buy more than any other group?
Based on these facts, would it be VERY PROFITABLE to actually provide rewards or incentives to generate MORE referrals? YES!!!
Even though strong customer loyalty is one of a company’s most valuable assets, most companies pay only minimal attention to this vital area.
Overwhelmed by the the constant battle to gain new customers, most companies overlook the lifetime value of existing customers. For the best return on their investment, companies SHOULD devote FIVE TIMES their efforts to building their business with their current customers.
Of course, acquiring new customers is an essential part of every company’s marketing strategy. But growing corporate profits are the result of cumulative successful relationships with customers. This is common sense. You can not grow profits by relying solely on one-time customers. If you ONLY advertise to continually recruit new customers that NEVER make another purchase – then the moment you slow or stop your ads your business also stops.
I can not think of a single viable, lasting business that can exist without repeat customers!
As the source of all company profits, customer relationships should be valued and protected.
Studies and surveys have shown that two-thirds of customers leave simply because they feel unappreciated after the sale! They are not repeat customers.
This means that if you want to maintain THE SAME level of sales, you need to recruit two-thirds of your customer base EVERY YEAR!
That is, unless you build STRONGER relationships with your existing customers and REDUCE that rate of attrition!
Don’t misunderstand. You STILL need new customers for growth. Some customers die or move away. Others want the latest model offered by your competition. As many as 15% may be dissatisfied with your product or service – which is another story…
But the BIGGEST reason – BY FAR – for customers NOT becoming loyal repeat customers is the impression that their business is not valued and that they are not appreciated!
If your customers begin to feel ignored or neglected, don’t be surprised when they ultimately take their business elsewhere!
Customer Retention Directly Affects Market Share And Profitability!
It’s just a natural course of business that you will gain and lose customers. But customer satisfaction is critical to gaining MORE customers and losing FEWER customers. Repeat this process, year after year, and you have the undeniable formula for a successful business!
Developing a Customer Retention Strategy is a requirement for every business. Along with customer retention, an intentional customer referral strategy (and reward program) will result in a steady increase of customers.
One very effective method to acknowledge the value of your customers is to send them an occasional card. Yes – an actual card in the mail!
(Ask yourself when was the last time that you received a personal note in the mail? You remember it – don’t you! This is the significance of mailed notes! That is, they stand out and that means your business will be remembered, too!)
Cards can be mailed to acknowledge birthdays, thank you for purchases, and the anniversaries of purchases. Cards can be mailed to suggest services or additional products. Cards can announce incentives for referrals. But the most effective use does not involve any sales pitch. The acknowledgement of the customer’s value is your goal! You will be remembered when you send a card JUST BECAUSE they are a VALUED customer. These cards literally have SHOCK value!
I recommend an automated service that includes a contact manager to keep track of names, spouses, children, dates, and other data. The service can compile a series of cards that are mailed on specific dates or intervals. Best of all, even though much of the process is automated with the technology, your customer’s name is inserted to maintain personal impact.
To learn more about using postcards, greeting cards – with or without a wide range of add-on gifts – to stay in contact with customer, follow this link. This service is also incredible for rewarding customers for the referrals that they provide!
Each card can be customized with your specific message, photos, and even QR codes linking to websites, videos, and more! (Of course, the THOUSANDS of available cards also include many to mark the personal occasions of friends and family!)
Learn more at http://randyreek.com/SendCards and you can also register to send a FREE card (including postage!) to test the service!
Randy writes about topics that affect your finances, including Making Money and Saving Money. Randy is especially passionate about entrepreneurship. The Marketing Training section includes EXACTLY what Randy is using NOW to earn a full-time income as an online marketer - and how you can do the same! If you think any of the posts or articles would be interesting to others, please forward to your contacts. Follow Randy also on Twitter and Facebook!
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