It's Worth it to Have Your Customers Stay

April 1, 2007
p class="style9"Always remember, your companys current customers are the absolute No. 1 source of your future sales. When you lose customers, you lose

Always remember, your company’s current customers are the absolute No. 1 source of your future sales. When you lose customers, you lose all of their future business and all of their referrals to your competition. When you keep customers, you keep that pool of sales for yourself.

How much money are we talking about anyway? Think of it this way: If a 10-year customer buys one system, has a continuous maintenance agreement, and only refers two customers like him a year, that level of customer is worth more than $90,000 in sales. It’s hard to imagine, but the math is not debatable.

The fact is, loyal customers spend 33% more than non-loyal customers. And referrals among loyal customers are 107% greater than among non-loyal customers. If the business that wins a customer stays in touch, treats him fairly, remains valuable and continues to build the relationship, the customer can’t help but use and refer the business!

How does this happen? It begins with a relationship between you and the customer. The relationship is strengthened by your good service and the company’s quality products.

With these elements in place, a solid marketing program makes the relationships between you and your customers even stronger. And as a part of your marketing, a well-designed customer retention program will make a significant difference. It can pay huge dividends in loyalty, upsells, resells, backend sales and referrals.

What to Invest In Customer Retention?
As a rule, contractors assign little money to their“relationships. When we do have a customer service function, we put it under operations (calling it an expense) instead of marketing, where it is an investment.

This is a critical oversight. Wise contractors are figuring this out and are now seeing mountains of money returned to them from their small marketing investment.

A customer retention campaign investment will range from a minimum of 8% to a maximum of 24% of the total marketing budget. The higher figures would include maintenance agreement promotions.

You have to keep your company's name in front of your customers. We all forget things all the time. Imagine how quickly a customer can forget your company's name without additional contact. Let's look at a few tools that can keep a customer's memory fresh.

A thank you note after the sale is not just being polite. It's a part of the customer retention program — a reinforcement just after the sale. The thank-you should come from the salesperson and/or the company owner/president.

Refrigerator magnets with your company's name on them aren't just freebies from your company. They serve a purpose. They hold little Johnny's artwork on the refrigerator gallery — while also keeping the name of your company in the customer's home 24/7 where visitors can also see your company's name. If your company has magnets, make sure you offer one to your customers.

Company stickers. Okay, let’s think this through. When a customer has a problem with heating or cooling, or hears a funny noise, the first thing they'll do is look at the system. They may not know what they're looking at, but you can sure bet they'll open whatever door it's behind and look at the system. Dont you think that system needs a sticker with your company name and telephone number on it?

Most customers think of their thermostat as the primary piece of HVAC machinery! Ask to put a small sticker there, to help the customer find you if they need you. How about on the furnace? Inside the access door? The inside filter ledge? Remember, all you’re trying to do is make it easy for your customers to reach your company when the need arises.

Newsletters are the most profitable customer retention tool of all. By far, the most economical and efficient way to package helpful, insider information is through a good, strong customer retention newsletter program.

Your newsletters should have information that is not solely about heating and air! This is because you must — repeat must — retain the customers' interest. A 2,500 word newsletter on heating and air will not do it. In order to be effective and interesting, maintain a 60/40 split of general interest to specific field interest in your editorial split.

The best newsletter campaigns give customers rich, interesting information that is useful in helping them run their households safely and cost-efficiently. Plus, they bring your company name and logo right into their homes. It keeps them informed about new products and services too, but does so in a way that shows the customer benefits therein.

Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors. For the free 4-page report titled The #1 Costliest Mistake in Contractor Marketing e-mail your request with your mailing address to [email protected]. For a free spring newsletter sample, fax your letterhead to 334/262-1115 with the request. Call 800/489-9099 or check out for more free information.