It’s hardly surprising how companies will go all out to get new customers, often spending a fortune on advertising, mail shots and sales representatives. Providing that this is done with clear objectives (i.e. it makes you more than it costs you) then it can be an admirable plan. Why then after so much effort has been invested in attracting new customers is there no similar plan when it comes to keeping them. Often no-one considers how to retain business until the customer comes on the phone to tell you he is moving to a competitor, unfortunately by then it may be too late. “He who fails to plan, plans to fail".
You need to consider what factors your business offers that customers will value. Sometimes it is the different experience you offer that leaves competitors in the shade. There are many ways that can change the way you and your staff interact with customers to build loyalty.
Use a Contractual Service Agreement
It is absolutely vital that both parties know what they are getting when they enter into a business relationship. A written agreement providing legal terms that are both firm and fair is the most honest way to achieve this and prevents misunderstandings. Whilst there are still some folks out there that choose to do business on the basis of a handshake they will either be running very small operations where they know each customer personally or they risk losing everything to a customer who can often be unscrupulous when it comes to paying bills. If you have no contract then a customer can change their mind on a whim when an engineer visits their premises and pay you when it suits. The existence of an agreement will detail how often you can visit, specifies the equipment that will be serviced, how much you will charge and also if you wish it can include a minimum term i.e. 2 years or whatever.
Send a Welcoming Letter
When you get a new customer write a letter to ‘Say Hello’ and let them understand that you are pleased to know them. This is the first stage in building a relationship. I used to use my welcome letter to explain the basic terms of the agreement i.e. how much it costs, when we would call etc and would also include a copy of the service agreement to make it clear that we were both working to agreed terms. It lets the customer know that you are friendly, approachable and businesslike whilst making clear that this is not a casual relationship.
Keep Prices Steady
So many people get this wrong. It is rarely important that you be the cheapest in the area (it really isn’t). Indeed you will retain more respect from clients by offering a service which is professional, steady and possibly just a little more expensive than some other competitors. What you do have to offer is price stability built around a quality business. If you take on a customer at a low price, then jack it up the following year you have shown bad faith. If you had charged a little more in the first place, then kept the price stable in the second year you build goodwill. No-one wants to be taken for a ride by dodgy practices over pricing – an honest up front approach always works better. Obviously prices do change and generally the trend is upwards, but we all know what constitutes reasonable behaviour.
Demonstrate Reliability
If you have agreed to service equipment once per year each July then call in July. Don’t call in May or June to try to build up a slack month. Likewise try not to call In August, apart from annoying the customer you may place them (and your company) in an awkward position if an incident occurs before your overdue call. If it is absolutely necessary to change a customers service month ring them up, explain the reason for the change and ask if they would mind their visit being altered. Where you need to call in early some people may be reticent thinking that you are pulling a fast one. In this case consider offering a discount to compensate for the early call. It won’t cost you much but it will be appreciated.
Review your General Practices
There are a million different ways that you can improve your dealings with customers. In all cases a fair, honest approach always seems to produce the best results. Once you have cemented a relationship and proven yourself reliable and trustworthy competitors will find it much more difficult to give you a hard time.
Handle Customer Complaints Promptly and Fairly
A complaint is not always a bad thing. Essentially a customer has found a fault in your procedures and is giving you the opportunity of putting it right. There are generally two main types of customer complaint, one is where a client has a justifiable complaint – apologise, investigate the problem and put it right quickly and generously (regardless of cost). Often you only get to know how good a company is when you see how they handle a problem. If you handle this correctly the customer will come to understand that you are good people to deal with.
The other type of complaint is the more spurious type (usually whinging). This may happen when you put in your bill and the customer complains that you are always costing him money or trying to cheat him in some way. This type of complaint also needs prompt attention. Providing that the complaint is unjustified put your reply in writing. Show your customer the agreement or purchase order that he approved and make it clear that he understands that you have acted in good faith. Ultimately how you handle this will depend upon the exact circumstances and your relationship with the customer, but providing that you have acted correctly do not be afraid to spell this out.
Finally – The Goodbye Letter
All good things can come to an end. If despite all your good efforts a customer chooses to move to another supplier be gracious about it. You should always ask for cancellations to be confirmed in writing – remember this is a contract (and some competitors have been known to act unscrupulously on the phone). Depending how you handle the matter there is a good chance of winning the business back. Start by writing back to your (ex) customer to confirm their cancellation and thank them for their previous business. Make it clear that you have appreciated their custom and would be happy to do business with them again if the occasion arose. In addition I used to send them a printed sheet detailing all of the equipment on their premises together with locations, weights, test dates etc. and ask them to pass that onto their new service company. Although this might seem to be counter productive (i.e. helping your competitor) it serves two important purposes. First it shows that you have put the customers interests ahead of your own (which makes them question if they are doing the right thing by leaving you), secondly it puts your competitor in a difficult position if your paperwork and service information is a lot more efficient, detailed and professional than his.
If anyone has some good examples of building up customer loyalty please drop us a line and we will pass on the best of them.
Tom Law