IM|Sciences.net

The customers you need to grow your company may already be doing business with you

It’s a simple fact of business: Most companies are obsessed with getting
new customers. They advertise, plead, cajole, bribe, bend over backwards
and sometimes beg to get a new customer.

And after all that, once they get them, they ignore them.

“Most companies spend a lion’s share of resources to attract a new
customer,” said Theodore Kinni, co-owner of The Business Reader, a Williamsburg,
Va., business-to-business bookseller. “At the same time, more valuable,
already profitable existing customers are walking out the back door
unnoticed and uncared for.”

Kinni and partner Donna Greiner noticed this occurring in their own
business, and they felt it was affecting the firm’s bottom line. “We
weren’t spending enough time with our existing customers,” he said.

Kinni and Greiner decided to research how other firms were retaining
customers to help build retention levels in their own business. They
were so impressed with the stories they uncovered that they put the
information in a book, 1,001 Ways to Keep Customers Coming Back.{+}

“For years, we’ve been listening to business gurus tell us that the
customer is always right and that we need to keep customers for life,”
Kinni said. “Guess what? They’re right. Existing customers are the best
source of sales growth.”

The authors collected the ideas over the last half of the 1990s. What
emerged were the following 11 broad strategies for customer retention
outlined in 1,001 Ways to Keep Customers Coming Back.

1. Build an unbeatable bundle of products and services. If you want
   to keep your customers, make sure they can get what they want without
   leaving your premises. Amazon.com, for example, may have started
   selling books, but today, surfers stay in its online store for greeting
   cards, music, videos and with the new zShops initiative, to shop
   as many, small, independently owned stores as the company can cram
   into cyberspace.At the Cracker Barrel Old Country Store, one of the chain’s best
   ideas for bringing travelers back into one of their locations involves
   audio books. Buy any one of the 200-plus audio books on display
   in one Cracker Barrel, listen to it on the road, and when you’re
   done, simply drop it off at any other Cracker Barrel and collect
   a refund off the entire purchase price, minus a $3 rental fee. 
2. Give customers an incentive to come back. Be it a gift, a discount,
   special financing or a chance to win what’s behind Curtain No. 1,
   customers come back for incentives. McDonald’s cashed-in on the Beanie
   Babie craze by offering a series of specially designed Teenie Beanies
   with its Happy Meals for kids. The promotion generated so much business
   in 1998 that the company ran it again in 1999. 
3. Tap into the power of communities of interest. Try thinking about
   your customers as a community and your company as the common connection
   they all share. To get a feel for how strong that bond can be, just
   drop in on the annual Harley-Davidson rally each summer and suggest
   that some other company builds a better bike. Purchase a new Harley-Davidson
   and it comes with a free, one-year HOG (Harley Owner’s Group) membership.
   The loyalty of Harley-Davidson owners is legendary—with some
   riders even getting tattooed with the company logo. 
4. Stand behind your work and reap the rewards of trust. If your customers
   don’t trust you, they won’t come back. Period. But, if they do, you
   can survive the roughest seas. There is only one maker of refillable
   lighters left in the United States, the Zippo Manufacturing Company.
   What makes Zippo so special? The simple, unequivocal lifetime warranty:
   “It works or we fix it free.” 
5. Support good works and your customers will support you. Doing well
   by doing good is a powerful loyalty builder. Just ask children’s clothing
   maker Hanna. Its “Hannadowns” program encourages customers to return
   their purchases when their kids have stopped wearing them. The returned
   clothes are cleaned and then donated to local charities. The customers
   get a 20% discount on their next order, Hanna keeps the customer buying,
   and the needy get 10,000 articles of returned clothing per month.
   Everybody wins. 
6. Show your appreciation to every customer. Thoughtfulness counts.
   Industrial cleaning products maker New Pig Corporation provides its
   telephone reps with fast access to an assortment of greeting cards.
   Mention that your favorite football team won on Sunday and a day or
   two later, the postman delivers a congratulations card from the company. 
7. Know your trophy customers and treat them the best of all. If the
   Pareto Principle runs true at your company, you will find that the
   top 20% of your customers contribute 80% of sales. Japan’s Oura Oil
   turns its trophy customers into service station royalty. Customers
   who purchase more than 5,000 gallons of gas per year get a special
   club card entitling them to plenty of extra services, such as free
   windshield wiper fluid, whenever they gas up.Some firms create a celebration for their best clients.
   New Jersey-based water and soil testing service Aqua-Protech Labs celebrates the
   holidays and its best customers at the same time at its annual party.
   A few years ago, customers and staff dined at the elegant Pegasus
   Restaurant high atop the well-known Meadowlands Racetrack. The year’s
   biggest client was called to center stage to receive a case of fine
   wine as his company name went up in lights on the racetrack’s big
   screen.
8. Make it easier to buy from you than your competitor. “Keep it simple”
   is especially important for today’s high-speed world. Customers appreciate
   simplicity and convenience more than ever. UPS knows convenience is
   king in a busy world, so it created an elegant overnight package for
   customers, such as mortgage lenders, who send lots of documents that
   require signatures and return shipping. The company made a reusable
   envelope, so the recipient can simply sign the papers and ship them
   back in the same package. 
9. Go to your customers. Bring your goods and service to the customer.
   The Country Christmas Tree Farm in Sebastopol, Calif., knows that
   it’s tough to earn the loyalty of customers who only come in once
   per year, so it sends a thank you note with a twist. Buy your Christmas
   tree from them and a thank you note arrives the following Thanksgiving—along
   with directions back for this year’s tree.At the Little Nell Hotel in Aspen, Colo., the owners don’t wait
   for guests to arrive to begin making them comfortable. The hotel
   calls each visitor prior to arrival to answer questions about the
   area and the hotel, make plans for dinners and hotel transfers and
   to suggest and arrange recreational activities.
10. Find out what your customers want and give it to them. Maybe it’s
    time to listen. In Worcester, Mass., Fallon Clinic began listening
    to its customers’ complaints and found out that many of them
    centered on one department’s doctors. Some fast interpersonal skills
    training for the staff, and patient complaint levels were reduced
    by almost two-thirds. 
11. Become a customer service champion. Good customer service starts
    with the boss. What do Nordstrom, Southwest Airlines and Ritz-Carlton
    Hotels have in common? They are famous for building their businesses
    by putting customers first. Consumers flock to them because of it.
    These companies are led by CEOs who are customer service champs; they
    recognize and reward employees that cater to customers; and, they
    brag about their accomplishments.

Authored by: Ron Ameln. Republished by permission of the St. Louis Small Business Monthly,
The Source for Business Owners; September 2001.