One of the reasons my wife and I purchased our current home eight years ago was the yard and the fruit trees that had been cultivated throughout the years.
Within our yard there is a large Avocado tree, five orange trees, four lemon trees, two blood orange trees, a tangerine tree, a persimmon tree, two large groupings of pomegranate trees, grape vines, two blueberry bush, a raspberry bush and a walnut tree. It is a real-life growing fruit salad!
What we soon realized shortly after moving in was the vast number of creepy crawlers and the host of other critters that were enjoying the medley of fruit trees as much as we were.
Through the years, even though the house is in Pasadena (not exactly country living), I have seen the following creatures in our yard: racoons, opossums, squirrels, rats, bobcats, coyotes, lots of geckos, hawks, owls and I swear one time I saw what I believe was a weasel.
Seeing all the animals (except for the rats) is kind of cool. It is a regular ecosystem alive and well in the middle of the city.
However, what we also had was a full-blown spider infestation when we moved into the home.
Thousands of spiders including black and brown widows that turned our yard into a real action Halloween display.
After a few months, of living on the property, we hired a pest control company – Terminix. They came out every three months and sprayed the outside of the property, which helped control the spider population.
For their pest control service, I would be automatically charged $147 every three months. All in all, I paid $588 per year, which totaled $3,528 in the 6 years that I kept the service.
In addition, I added their mosquito protection during the last two summers, where they would service our home every two weeks for four months during the summer to spray the yard for mosquitos and mosquito larvae. This service was an additional $98 per month or $392 per year and a total of $784 over two years.
The grand total that I paid Terminix was $4,312 over 6 years. I wanted to give you these numbers so you could gain an overall understanding of just how valuable a long-term repeating customer can be to a company.
About a year ago, after a second bad experience with the new technician that was assigned to my house, I decided to cancel the service.
This is where the story and your interest in the story should really begin.
I do not know much about the pest spraying business or how it works, but I like to learn from what companies are doing when attempting to salvage a customer from leaving.
The lessons and techniques that a company often will implement when it comes to customer retention are often useful as they may lend themselves to other companies regardless of industry.
Terminix is one of the largest pest control companies in the world. I know because I looked it up. They have a presence in 47 states and 22 countries. Their annual revenue as reported back in 2015 was a hefty $1.45 Billion.
Given that, I figured they would have a good customer retention/win back procedure in place.
I figured wrong.
When I called to cancel, the phone representative asked me why I wanted to cancel. I told her that I was not happy with the service provided by the new technician.
To which she responded, “you would be surprised, we actually have had a few complaints recently about his service. I’m sorry you weren’t happy, and I’ll cancel your service right away”.
That was it. My service was cancelled and just like that a customer who had paid them almost $5K and had been engaged in an ongoing service agreement over the last six years was lost.
I did start receiving post cards about once every two months, but the postcards were generic and did not address my issue; the issue why I cancelled.
Also, interesting was that each of the subsequent post cards focused on Terminix’s more expensive service (the mosquito service) and not the original service, which is where my backyard spider problem is again surfacing.
Most companies, especially eCommerce ones, do not have the luxury of having their customers call and tell them why they are going to no longer use their service.
Before we even discuss a win back campaign or ideas of how to salvage a customer relationship once it is broken or at least fractured, it is important to discover how the relationship became damaged.
In the past few weeks, within both my podcast and my blog, I discuss the mother of gold rule. The mother of gold rule is – Are you treating your customers with each interaction the same as you would if the order were placed by your mother?
This rule is valid in creating goodwill in your customer relationships that is vital to both eCommerce as well as Professional Service companies.
However, beyond offering great service with each interaction, there are other additional measures that you can take.
And why should focus on the extra effort to keep your customers happy?
Here are a few reasons:
First, keeping your customers as customers is going to be significantly less expensive that acquiring new customers.
Think about how much it costs to acquire a new customer. Regardless of your business this is typically going to be most of the advertising costs. Now think about how much you are spending on keeping your customers happy.
Second, a happy customer often will refer you other customers similar to themselves. An extremely happy customer is likely even to become an ongoing ambassador for your business.
Third, an unhappy customer will sour others on your business and is much more likely to speak of your company in a negative light to others regarding your company than a happy customer is to refer.
In fact, it has been shown that an unhappy customer is 7x more likely to tell someone about their experience than a happy customer.
Case in point. Over the six years of doing business with Terminix, I referred about six people or about one per year. However, look how many people I am now telling about my unhappiness with Terminix:>
Okay. Maybe an extreme example, but I think you get the point!
Providing your long-standing customers with benefits such as a VIP Program with exclusive privileges, rewarding frequent customer purchases or simply learning more about your customer and their needs and working to solve their problems will go a long way to increase your customer retention and increase your long-term profitability.
You must consistently reinforce to your customers that you are the best choice to continue to do business with compared to both your competitors’ options and the option of doing nothing.
Once you dedicate yourself to the great service you provide your customers and effectively use your resources to continually remind them of the benefits of business with you, your customer retention will undoubtedly increase.
However, let us assume that you have done everything you can to keep your customer relationship healthy and a customer still decides to take their business elsewhere. No matter what you may do, this is sure to happen from time to time and if this happens you need to be ready!
The most important thing you can do is to try to determine why your customer no longer wants to be a customer. If you can do this, your customer retention issue will get a whole lot easier.
Once you know why they know longer are going to be a customer, such as the Terminix where I flat out told them, it is important to have a procedure in place.
Once you know the issue you can follow these steps in action plan for retaining a customer:
- Address the problem and then fix the problem.
- Do not let a customer leave without providing an offer to have them stay. Discount on service, discount on products, an unadvertised bonus, etc. You will need to test the effectiveness of offers, but make sure you have an offer ready.
- Make it easy for a customer to return. Once someone has done business with you and you have addressed their problem of why they no longer are doing business with you, then winning them back will be much easier than attaining a new customer. Focus your marketing on their problems as well as the reasons that fractured the relationship.
Terminix continues to market to me, but for their addon expensive Mosquito service and not the original pest control service.
If they would market to my original and currently persisting spider problem with perhaps a bit of incentive to return or market to me with how they have changed policies with their technicians, they would have a good chance of gaining back a customer.
That is why it is important to know why your customers left, what current needs they have and remind them how you can solve their unique problems.
This is just as true for eCommerce companies as it is for Professional Service companies. If you have a customer who made multiple purchases in the past, do what you can to discover why they are no longer are a customer; fix the issue and make them an offer to return.
The process of customer win-back is going to be much more cost effective than focusing purely on new client acquisition and in the long-run this strategy will work to ensure your growth and sustainability.
The cliché that the customer is the lifeblood of your company has been often said, however, many times it is either forgotten, misinterpreted, or simply ignored.
What I believe to be a more useful saying is that focusing on current customers is the key to long-term business success.
I think this statement defines the importance of serving your customers with the goal of them becoming repeat customers. For a growing and profitable company can only become so if they do not have to continually spend on acquisition but can depend on a reliable base of customers continuing to purchase.
In order to create this loyal base of customers, it is important to treat them well (mother of gold rule) as well as reward them for their purchases and continually remind them of the benefits of doing business with you.
And if a customer no longer wants to do business with you, find out why and take action to correct the issue. By correcting the issues that are making customers leave, you can perhaps save customers while ensuring other customers are not bound to leave for the same reasons.
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ABOUT THE AUTHOR
Andy Splichal is the founder of True Online Presence, author of the Make Each Click Count book series, host of the Make Each Click Count podcast, founder of The Academy of Internet Marketing and certified online marketing strategist with twenty plus years of experience helping companies increase their online presence and profitable revenues. To find more information on Andy Splichal, visit www.trueonlinepresence.com or read The Full Story on his blog, blog.trueonlinepresence.com.