Why do we focus so much of our time and effort on tracking down new business, when our most profitable customers are the ones we already have?
The number one goal of most sales teams is acquiring new customers. In fact, many of the teams I coach even have bigger budgets, more creative leeway and earn higher commissions when they acquire new business.
To my mind, however, there's a big problem with this line of thinking.
For one thing, research has shown that it costs as much as fifteen times more to find a new customer, than it does to keep an existing one. What's more, an increase of just 5% in your customer retention rate - that's just 5% more of your customers who come back to buy again and again - can increase your profits by as much as 75%.
The following 9 tips are the best ways I know to consistently and reliably exceed your customers' expectations, and build greater loyalty - and higher profits - for life:
- Be nice - and say thank you!
You'll be surprised how much this matters - and how dramatic the results can be!
For new customers, always say "thank you" within days (or if it's online, within hours) of receiving your first order. After that, if it doesn't make sense to offer thanks for every order, make sure you do it at least once a year.
I encourage you to use handwritten thank you notes - preferably ones that aren't branded with your logo to look like an advertisement. Depending on the size of the order, you might also encourage your managers or executives to thank the customer as well.
In addition, you can go one step further and develop a special "welcome kit" for new clients, complete with a thank you note, a small but meaningful present and useful information or perks for doing business with you.
- Make it easy to be a customer
Find ways to remove the voice mail maze, long login forms and other barriers you set up for prospects. For example, get a dedicated phone line for repeat customers, or even have a separate customer-only website that makes it easier for them to re-order.
To make your business more customer-friendly, start by pulling in 1 person from each department (preferably not management) for a brainstorming session, and ask each of them what changes they would implement to make it easier to do business with your company. Prioritise the list, and then starting working on the new ideas one at a time.
If brainstorming isn't reasonable at your office, consider hiring an outside firm to "mystery shop" your organisation. Have them act as a prospect or client to see what an outsider really experiences when they deal with your company. Then take their findings, and take action to improve those things that need fixing.
- Reward loyalty
Most companies make the mistake of rewarding only new customers. I know that I for one always get irked when my current suppliers give a better deal to new customers who may only be with them for a single order, than they offer to me, a client who has already proven my loyalty.
No matter how thin your profit margins, you can afford to give your best customers discounts, special services and even the red carpet treatment. Don't think so? Just do the math. Remember that new customers cost you up to 15 times more than repeat customers, and factor that into your profit-loss equations.
In many cases, it's not even necessary to invest in a formal "loyalty" program. Simply invite your best customers to "inner circle" events, focus groups or exclusive training. Even if the customer has to pay for the trip, at least they'll feel appreciated, and many of them will go out of their way to attend.
- Make it about them
Think about how good it feels when the waiter at your favourite restaurant greets you by name, brings you your favourite aperitif and always remembers exactly where you like to sit. You tend to return again and again, and always tip a little more than usual, right?
Believe me, that waiter knows exactly what they're doing. The good news is, the same approach works just as well with even the most battle-hardened buyers. Give them advice, counsel and content specific to their needs, without being asked. Make sure any emails, phone calls and special offers are customised to them, and their needs. And remember, it's all about them - not you.
- Ask them what they want
Most people want their opinions heard, and love being asked for their point of view. That's why simply surveying your customers will not only gain you some valuable information and insights into their needs and preferences. It can also communicate that you care what your customers think - and what they want.
While you don't want to conduct surveys too often, you can ask for feedback after a particular transaction, or on an anniversary date. Remember: your clients care more about their own opinions than they do about yours. If you also report the results of the survey back to them, you'll give them a double confirmation of your concern.
- Ask them how you can help
Be truly interested in your customers, and show them that you sincerely want to help them. After all, they can't continue to do business with you if they don't continue to have a successful business of their own!
One client of mine doubled her referrals almost instantly just by asking, "Now how can I help you?" at the end of every client meeting. By putting the needs of her customers first, she demonstrated how much she cares about them. You'll find that many of your customers are genuinely surprised by a question like this, because as often as not, no one has ever asked them that before! And that's why your follow-up question is indispensable.
- Get 'buy' with a little help from their friends
The happier your customers are, the happier they will be to refer you to their own friends, colleagues and associates.
A referral from a customer is the highest form of trust. Trust is built on consistent behaviour over time, starting with continuously showing your customers that you're focused on their needs. Once you've established that level of trust, identify "apostles" among your most loyal customers, and empower them to crusade for your product or service.
Of course, always reward customers who send business your way. At a minimum, a handwritten thank you note will show them you appreciate the effort they made. At the maximum, a gift will help you secure that relationship - and likely lead to even more referrals in the future.
- Get your customers involved
Build a customer panel or advisory board, and invite your customers to join. You'll be surprised by how many will be more than happy to join - and how many of those who do join will also start to share, refer and buy more as a result of their participation.
As an added bonus, if you listen and act on what they have to say, you'll not only build their trust and loyalty, but you'll also make them more willing to reach out to new prospects on your behalf.
- Ensure everyone in your company is involved
Last but most definitely not least, make sure everyone in your company knows how important the customer is, and develop a foolproof communications plan that puts that knowledge into practice.
It takes years to build a great relationship, and just one big mistake to end it. The last thing you want after putting all this work into building loyalty is to have one of your representatives thanking a customer one day, and then having another treat them like an anonymous prospect the next!
Remember: whether they're responsible for shipping products, setting up accounts, collecting payments or running a marketing event, everyone in your company who will talk to your customers at some point is a customer service representative. So make sure they all know who your most important customers are - and how they should be treated.
Putting all of your employees through basic customer service and sales training can be an exceptionally profitable investment. Every time anyone talks to a customer, they have the potential to either earn more business and loyalty, or lose it. Make sure you maximise every opportunity you have to treat your customers well, and the results will speak for themselves.
It's easy these days to complain about needy, demanding or high maintenance customers and clients. The only thing worse is not having needy, high maintenance, demanding - or any - customers at all!
My advice? Get over it! Refocus your time, energy and budget on building profitable relationships with your existing customers, and do everything you can to keep the people who keep the lights on happy.