Some experts argue that while customer acquisition is an investment, profitability is built on customer retention. With the economy in its current state, this axiom is proving even more important.
In a survey of engineering, technical, manufacturing and industrial marketers at the beginning of this year, 13% indicated that customer retention is their primary marketing goal in 2009, up from just 5% last year.
This increase can be attributed to the fact that companies cannot afford to lose customers now, and many realize it is easier and more cost-effective to retain current customers than it is to find new ones.
Guy Maser, Senior Vice President of Marketing for GlobalSpec (www.globalspec.com), says that to retain customers and earn their loyalty, a company needs to be loyal to them. For starters, Maser says, the company must have a product or service that delivers as advertised. But that's just the minimum requirement.
Maser offers these steps to better customer relations:
Provide stellar customer service. Customer service is the key differentiator for companies that offer similar products and services. Customers have problems; they want them solved. Customers have questions; they want them answered. The winning company makes it easy for customers to speak with a service representative - a real person, not an interactive voice-response system - who has the authority to resolve a customer's issue and make the customer happy.
The problem with some companies is that they see customer service only as a cost center, which leads to their constantly trying to cut customer-service costs. Rather, customer service should be considered a customer-retention initiative - or in the best of cases a profit center, if your customer-service team is trained at cross-selling and up-selling appropriate products and services to customers. A change in perspective can equal a change in service.
Make your Web site a customer self-service center. It's more cost-effective having people answer customer-service phone calls if your Web site is set up to answer most customer-service questions and easy for customers to find those answers. Your call volume will decrease, and customer needs will still be met.
Consider a customer-only area of your Web site that provides support information, refund and exchange policies, FAQs, interactive discussions and message boards, or click-to-chat functions. Also, be sure to have up-to-date and comprehensive product information available and special offers just for customers.
Use e-mail to communicate with customers. It is hard to foster customer loyalty if your customers forget about you. A great way to stay in touch is through e-mail. Establish a regular customer-only e-newsletter, and send customers information that is relevant and helpful to them: white papers, technical articles, invitations to Webinars and links to industry news stories.
While there's nothing wrong with promoting new products to customers, your main objective in customer-retention e-mail should be educational rather than promotional. If you help them do their job better, they're more likely to come back to you when they have a need for products or services.
Pick up the phone. Begin an organized effort in your company to call customers at regular intervals, simply to see how they are doing or whether they need anything. A courtesy call can go a long way toward establishing customer loyalty. Sales representatives for each account are ideal, but your initiative doesn't have to work that way in order to be successful. The caller should know how to route a call to the appropriate person in your organization if a customer needs help.
Establish customer-friendly policies. Have you ever been a customer of a company that retired a product without continuing to support it? Have you ever faced strict return or exchange policies? Poor warranty support? This is a good way to send customers fleeing to competitors. An organization focused on customer retention and loyalty will always realize the consequences of any policies that aren't customer-friendly.
To foster a healthy long-tem relationship with customers, you must do much more than provide a good product or service. You must pay attention to your customers' needs and meet them. There are always competitors ready to lure your customer away. And there are always customers who will switch given any slight, perceived or real. Following these steps above will help minimize the chances that this will happen.