While it’s true that the Internet-based promotional and marketing tools make finding new customers easier than ever before, the fact remains that it’s still smart and cost-effective to keep your current accounts around.
Estimates vary, but when all the various costs are considered it’s widely believed that it’s at least five to seven times more expensive to bring a new customer onboard than it is to retain an existing one.
Costs of new customer acquisition include:
- Promotion and advertising
- Direct selling
- New account set-up and administration
- Resources (time and money) applied to the orientation of new customers
- Dealing with price sensitivity
None of this should be taken to mean that your company should not pursue new, profitable customers in the context of an intelligent, well reasoned marketing and sales plan. (Grow, baby! Grow!) But it’s definitely worth the extra effort to hang on to your current clients. Not only do satisfied customers that have been with you for a while “keep the lights on”, but they bring numerous other possibilities to your company.
Benefits of established customers include:
- Predictable revenue
- Repeat business
- Reduced sensitivity to price changes
Knowing that established accounts will be more agreeable to price increases and are also possible referral sources is probably all you need to make a strong case for an effective customer retention plan – and that translates to making customer service a company-wide priority. And good customer service doesn’t need to be expensive or time consuming. In fact, it can be almost painless. You just need to pay attention and plan ahead.
Five Keys to Painless Customer Service
- Help your customers understand how you operate. Your systems may be great (they probably are), but it won’t matter if customers don’t understand how they can help their interactions with your company – transactions, deliveries, service calls, etc. – run more efficiently. No one likes to feel uninformed or stupid, so don’t risk alienating an account by letting him feel adrift. Even upscale casinos have floor personnel who can assist new players in understanding the “house rules.”
- Remember what put you there. Your customer chose you for a reason. It might have been a reputation for very high quality, fast responses to his initial inquiries, competitive pricing, or just plain convenience. Whatever it is – and if you don’t know, FIND OUT – make sure it’s noted in the account record and then keep it coming. (Double-down, if you’ll pardon another casino reference.) For example, if loads of personal attention and regular contact helped you land the initial sale, schedule regular phone calls or email messages to keep in touch.
- Information is power. Get regular feedback from customers, especially your very best accounts. Encourage comments and suggestions regarding how you could improve. There are many ways you can find out how customers feel about your company’s performance. Surveys are a good starting point, but specific, unique feedback from a particular customer is what you really want. If time and other resources permit, consider establishing a customer relations role, independent of sales or production, to check-in with customers periodically.
- Be proactive. Nothing is constant except for change. Anticipate your customers’ evolving needs. The state of the economy, regulatory changes, industry trends, or even problems for your customer’s customers (in a b2b situation) can cause headaches for your clients. Anticipate how they might be impacted and how your company can help. This kind of forward-thinking can raise your value in the eyes of your customer. At that point, the eventual next sale becomes just a formality.
- Say “thanks”. Is more explanation necessary? A hand-written note after an order, or a small, tasteful gift (where permitted) during the holiday season can go a long way in promoting and solidifying a good customer relationship.
MP Star Financial’s invoice factoring services can free up your valuable time to ensure your customers’ needs are met. Call MP Star Financial for more information at (800) 833-3765, extension 150.