The role of personal communication in client retention
For the rest of the August 2002 issue of CRM magazine please click here
"The sale merely consummates the courtship. Then the marriage begins. How good the marriage is depends on how well the relationship is managed by the seller." - Theodore Levitt
Whatever your business, there's always someone out there who can promise to do more, vow to do better, assure it will be done faster or guarantee to do it cheaper just to get the deal. Through a barrage of advertising, public relations, direct mail, blast fax and online solicitations, the competition to steal your best customers has never been greater. With aggressive marketers continually soliciting your customer's business, if you're not careful, you could be left asking, "what happened?"
The customer you worked so hard (and invested so many resources) to land is a valuable asset to your company. Already educated in the particulars of your firm's products and personnel, a satisfied client represents not only recurring revenue and security, but is an important and comparatively inexpensive source of new business through referrals or endorsements. On the other hand, the loss of that customer could unbalance your bottom line and, if it becomes a frightening reoccurrence, might threaten the viability of your entire company.
The way to avoid this nightmare hinges on two imperatives. The first is obvious: deliver what you promise. But the second, remarkably, is often handled casually or ignored altogether even in the most astute organizations. For while nearly all successful companies have a plan and budget for acquiring new trade, surprisingly few have formal client retention plans. This, despite the fact that statistics repeatedly affirm that it costs five times as much to attract a new customer as it does to retain a current one.
There are many well-established methods for retaining your customers. Some are part of your first imperative: for example, continuing to deliver quality product and on-time service, pricing competitively, keeping up with marketplace demands, and mastering the most current technology available in your industry.
Other methods build on your communication with the client and directly or indirectly engage their interest and feedback. These range from such tried and true methods as written or phone satisfaction surveys to such newer approaches as "frequent user" incentives, training programs and seminars, and electronic newsletters, to name just a few. While all of these are efficient in their own ways, they are also impersonal. And in this fast-paced, highly competitive, technologically sophisticated world, personal communication still counts.
As instant communications have become the norm, the real challenge is to find a way to leverage new technologies while not losing the personal touch. It makes sense to e-mail your clients routinely to keep them informed, but that doesn't replace a phone call or a personal visit. Both are necessary - one to get the message out quickly (and perhaps broadly) and the other to add a personal, emotional element.
The value of direct, personal communication cannot be underestimated. Personal relationships with your customers - face to face or on the phone - allow you to gauge their mood, intent and level of satisfaction. You can also build trust, demonstrate accountability, answer questions, ask for feedback, dispel rumors and anticipate or solve problems. You can explain and sell new products or services (they won't buy something they don't know about), provide company updates and subtly upsell when appropriate. But most importantly, you can show that you care by learning more about your client and their business - which in the long run will enable you to serve their needs even better.
While there's really no secret formula to putting together a client communication program, here are eight suggestions on how to get started:
1. Structure a client retention plan that balances the use of 21st century technology with personal, direct communication.
2. Set a schedule and make it a priority.
3. Do your homework on each client. Take the time to track down important and relevant reports, statistics and correspondence. Review this information in advance and have it at hand during your conversation.
4. Ask questions. Encourage candor. Take notes. Listen carefully. Put the same effort - or more - into this exchange as you would if you were courting a new prospect.
5. Accept your customer's comments openly and never defensively.
6. Vary your approach. After you've spoken on the phone a couple of times, arrange to meet in person. (And always make an appointment. Drop-in visits and unscheduled calls will seldom produce the depth of communication you need.)
7. Show them that you appreciate both their business and their time by sending a thank you letter or note after your conversation.
8. And of course, promptly fulfill any promises you've made and if you can't (heaven forbid) be sure to tell them why.
Once you've established more regular contact with your customers, you'll find that they anticipate and appreciate it. And here's another tip: don't reserve the personal treatment for your current customers. Look at your list of lapsed clients and see whether they might respond to renewed attention.
Your clients need more than great products and great service. They need to hear from you personally. If you let your attention wander, someone will be there to snap up your business. Don't let your customers slip away. "Once a customer, always a customer" is a dangerous assumption...and it's getting more dangerous every day.
[Paul Spiegelman is Chief Executive Officer of The Beryl Companies.]