Best Practices in Customer Retention

1. Best in Class Customer Retention A 5% Improvement Can Double Your Bottom Line Profits For more information: Call 410-977-7355 or visit mcgrawmarketing.com 1

2. For more details, download the Customer Retention White Paper at http://bit.ly/WuZmd4 Or email pat@mcgrawmarketing.com For more information: Call 410-977-7355 or visit mcgrawmarketing.com 2

3. Frederick Reichheld, The Loyalty Effect ―...in a typical company today, customers are defecting at the rate of 10 to 30 percent per year; turnover rates of 15 to 25 percent are common...‖ ―In most businesses other than retailing the costs of acquiring a customer, setting up an account, and checking credit are so high that the economics just won‘t work unless the customer stays loyal.‖ ―...a five percent increase in customer retention rates can potentially increase by 25 to 100% the value of a business‘s customers ― For more information: Call 410-977-7355 or visit mcgrawmarketing.com 3

4. A few thoughts from Pat McGraw Retention starts long before demand generation. Retention starts when you start planning your business—it‘s what makes your business uniquely valuable to your audience. Retention needs to be proactive rather than reactive – too many businesses wait until the customer is half-way out the door before turning on their ‗retention‘ magic. And retention is something that needs to be part of your corporate culture because everyone has a role to play in delivering a unique, valuable customer experience. For more information: Call 410-977-7355 or visit mcgrawmarketing.com 4

5. PLAN For more information: Call 410-977-7355 or visit mcgrawmarketing.com 5

6. ON-BOARDING For more information: Call 410-977-7355 or visit mcgrawmarketing.com 6

7. CLARITY For more information: Call 410-977-7355 or visit mcgrawmarketing.com 7

8. COMMONALITIES For more information: Call 410-977-7355 or visit mcgrawmarketing.com 8

9. COMMUNICATION For more information: Call 410-977-7355 or visit mcgrawmarketing.com 9

10. FOCUS For more information: Call 410-977-7355 or visit mcgrawmarketing.com 10

11. INTERVENTION For more information: Call 410-977-7355 or visit mcgrawmarketing.com 11

12. KINDNESS For more information: Call 410-977-7355 or visit mcgrawmarketing.com 12

13. For more details, download the Customer Retention White Paper at http://bit.ly/WuZmd4 Or email pat@mcgrawmarketing.com For more information: Call 410-977-7355 or visit mcgrawmarketing.com 13

14. 20+ years helping businesses improve sales and marketing performance www.linkedin.com/in/patmcgraw/ www.mcgrawmarketing.com 410-977-7355 For more information: Call 410-977-7355 or visit mcgrawmarketing.com 14

Notes de l'éditeur

Tip 1: Be Proactive About RetentionFew firms have a formal customer retention action plan. Most make the assumption that “...once someone buys from us, their ours for life because our products and services are so much better than the competition.”And we all know what happens when we assume, don’t we?!Think of it this way. Retention is like moving from dating to marriage. It means more work and you still need to remember to tell them that you love them. And remind them of the many ways you express that love so they realize that they are enjoying value—because they will forget .You want to consistently deliver a unique, valuable customer experience. You want to meet, if not exceed their needs and expectations.And those needs and expectations change so you need to pay attention in order to respond quickly, appropriately and effectively.
Tip 2: What should that plan include?Right at the start, you need to identify what the customer values—then create a plan for ensuring that your business consistently delivers on those wants, needs and expectations.You know what your capabilities are so use that as a checklist when discussing this with prospective and new customers.Then ask if there is anything else so that before you sign that deal you know what you need to do to retain them.Tip 2a: On-boarding ProcessThey have never done business with you before and they have no idea how to work with you as a customer.So make it easy for them. Create a process for new customers that ensures they have a fantastic first experience—and for some businesses that can be a day or several months.The goal here is to WOW the new customer so they never have time for second thoughts and buyer’s remorse.Let me tell you a story that will help explain.Early in my career, I was in charge of sales and marketing for a sports apparel manufacturing company. And they purchased about a dozen sewing machines that cost more than $20,000 each.Prior to delivery, the sewing machine company sent out a person to look over the manufacturing site and worked with our team to ensure that the delivery would go smoothly. On delivery day, they arrived on time and were neatly dressed. They introduced themselves to the owners and managers and users. They quickly and efficiently executed the delivery and installation.That’s when the training team arrived—and they immediately began training the staff so they could quickly master the new machines. (They had also brought in a demo machine and offered scheduled training sessions for employees prior to the delivery and installation.)Then, every day for the next four weeks, a trained staff member from the sewing machine company would be on-site to answer questions and offer additional training.Since productivity was key—the manufacturer offered service calls before and after normal business hours for our sportswear company. They came with a replacement machine (same model) in case they couldn’t repair our machine in time for work.They also came monthly to perform regular maintenance so that the machines continued to work at peak efficiency over a long life.That’s a retention plan.
Tip 3: Clearly Define ‘At Risk’ and ‘Attrition’This one sounds so simple—but it can lead to some intense discussions.When is a customer ‘at risk’? And what is attrition? Is a customer at risk or no longer a customer when they close their accounts? Or when the customer is ordering smaller order or less frequently? The bottom line is that without a common measurement, it’s tough to look at attrition across the enterprise in an organized way.
Tip 4: Once defined, Identify CommonalitiesOnce you have your definition for at-risk and attrition, look at those customers and try to identify common elements.Look at demographics, psychographic, geographic (or, in the case of businesses, firmographic) factors.Look at activities and interactions with your business—are there any common events?Talk to your customers and ask why their behavior is changing. Interview former clients —and find out why they left and what, if anything you could have done to have retained their business.Then look at all the data in order to some conclusions.What you should find is that some left for reasons that you could have prevented and others left for reasons you couldn’t prevent.And you should identify certain behaviors that led to the specific action that is attrition.For example, most customers don’t stop cold turkey. They might slow down and buy less often and in smaller amounts. (That’s when they are probably testing out your replacement and they don’t want to leave you for unproven alternatives.)Maybe they start to pay later and later. Or returns are up significantly. Or calls to service and support have increased.
Tip 5: CommunicationBring your sales and service people into the loop because chances are pretty high that the customer is saying things that are clear indicators of dissatisfaction and plans to take their business elsewhere. Remember, there’s nothing worse than hearing from a co-worker that “...I knew they were unhappy…” after the customer has taken their business to the competition.You want to know that information as soon as possible so you can respond—if that business is worth saving.
Tip 6: Pick your battlesSometimes, losing a customer is inevitable. Some will die. Some business clients will close their doors. Some will relocate to places you don’t serve.Sometimes, losing a customer is a blessing. You probably have some customers that fail to generate a profit. They pay late. They return merchandise all the time. They call service and require help all the time.You have limited resources and your goal is to invest those resources in areas that generate the greatest profits for your business—so have a process for determining if the at-risk customer is worth retaining.
Tip 7: Intervention ProcessOnce you have identified an at-risk customer, you need to act swiftly and appropriately which means you need to have a process and a plan. And that plan needs to have clear rules for evaluating, accepting or rejecting the customers terms.Oh and make sure that whomever represents your business at this meeting has the authority to make decisions—because in some cases you are going to need to negotiate.Don’t go running in there tossing around free stuff. Don’t walk in and drop your prices. Walk in. Sit down. Ask them what, if anything, is wrong. Then shut up and listen.Ask questions that confirm what you thought your heard so that you are on the right page and so that the customer knows you heard them.Then ask how you can make them happy.Amazing as it might seem, a lot of customers will be happy to see you care.Some will ask for something that is simple and very reasonable.And a few will ask for the world—at which time you make a counter offer. You want to bring this to a happy conclusion right then and there so don’t ask to go speak “...to my manager.” Be in charge.
Tip 8: Random Acts of KindnessRegardless of the customer’s behavior—step in every once and a while with a random act of kindness.Thank them for their business. Offer them something of value—and that’s not a discount. Be creative and leverage your resources so that it’s something of low cost but high perceived value—think early boarding for frequent fliers or early check-in and late check-out at hotels. Or maybe it’s call ahead seating for preferred clients.The key here is to offer something relevant, personal and of high perceived value so it WOWs the customer.

Best Practices in Customer Retention

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Best Practices in Customer Retention

Notes de l'éditeur