Dear Diary, I Lost Another Customer Today

It is easy to tell when my car needs gas. There is a gauge on the dashboard. If I am not paying attention, a light comes on when the fuel level gets too low. Finally, the car will simply stop when the tank is completely empty.

However, my car (unlike more sophisticated models) gives no warning when I need an oil change. Even if your car displays remaining oil life, you must first remember to scroll through the display periodically to check it. Jiffy Lube, Kwik Kar and other oil change franchises solve that problem by putting a small transparent sticker on my windshield to remind me at what mileage I need to change oil.

Doctors, dentists and veterinary clinics have long sent reminders when annual checkups are due. Same principle!

Most consumer products that require periodic maintenance or replacement give no obvious warning. Filters on furnaces and air conditioners, and batteries in smoke detectors and watches all come to mind. Many things around the home and office including HVAC equipment, computers, alarms systems, pool equipment and so on all need periodic service for optimum efficiency.

If you sell replacement parts or service on products that fall into this category, create a diary system, a sticker or something to remind customers to schedule a service call.

Here are some additional thoughts to keep customers coming back to you for maintenance and service work.

  • Have the customer indicate how they want to be contacted for a reminder when they initially purchase the item or sign up for service. Provide several options such as email and phone calls. Both are cheaper and more likely to solicit a favorable response than mailing a card. Whatever diary system you choose, it is sure to improve customer retention.
  • Create a sense of urgency by including a limited-time special offer with the reminder. A 15% discount, a free month of service or other incentive will discourage customers from procrastinating or purchasing services elsewhere.
  • Everyone who subscribes to magazines has received next year’s renewal notice within a few months of renewing the current year. In some cases, the marketing strategy may be to hope the subscriber forgot they still have 10 months remaining on the current subscription. However, the publisher usually offers substantial discounts to renew early, especially if pre-authorized to charge your credit card at renewal.

The same idea applies to remind clients to renew annual contracts, maintenance agreements and so forth. Do not wait for the customer to contact you, and do not risk losing a sale simply because you forgot. Again, offer customers a discount or an extra month on the contract if they renew by a specified date.

Enjoy the long weekend as we celebrate the unofficial end to summer and our 118thannual Labor Day. Thank you to our Canadian neighbors who came up with the idea ten years before Grover Cleveland copied it!

© 2011 by Dale R. Schmeltzle

 

You are Invited to my Party

Small business coach and author Robert Gerrish said, “For many, one of the greatest moments in business is the joy of attracting a new customer or client. In such circumstances, it is easy to get so caught up in the excitement that we forget to spend time on realizing the value of one of our business’s best assets, our existing client base.” For example, you may have heard banks criticized for offering free checking to new customers while charging existing customers for the same service.

As Mr. Gerrish suggests, all too often promotions only target new prospects. Show your appreciation of existing customers by holding promotions and events designed exclusively for them.

  • A special after-hours personal shopping event or trunk show, complete with entertainment, refreshments and “invitation only” discounts is an example. If your products typically require sizing or fitting (such as clothes), allowing a two day presale can create additional excitement. Customers select their purchases in advance, which you hold until the actual sale. This procedure also requires customers to visit your facility at least twice.
  • The luxury day spa I spoke of earlier invited my wife and I (did I mention she is one of their most loyal customers) to an art exhibit by a nationally recognized concert pianist. The event also included a wine tasting.

Another way to demonstrate your appreciation for existing customers, suppliers and employees is to hold an open house or reception. This is a great way to display your operations. It will also strengthen relationships between customers and staff that have not met. If your facilities do not include a suitable physical location, host it at your home, a nearby restaurant or under a tent on the front lawn. Moreover, while your open house or reception must be memorable, it does not have to be expensive. Class is not measured in dollars.

  • You may find network contacts are willing to help cater the event, print programs and menus, provide entertainment or other useful services at substantial discounts in order to promote their products and services to your customer base. Always take full advantage of your network and be ready to reciprocate by supporting and promoting their events.
  • Avoid scheduling functions on weekends or when likely to conflict with numerous holiday events. Use all of the communications tools and options previously discussed to ensure good attendance. There is nothing more discouraging than hosting a party when no one shows up.

A final caution about special event promotions is that in order to be truly special, you cannot hold them too often. Any promotional tool that is used too frequently runs the risk of creating customer expectations that will cause them to avoid full price purchases in anticipation of a sale or event that may never happen.

Next week, I will present an exciting 3-part series on my ongoing love affair with SlideShare.net. It picks up where a June series on this topic left off. I think you will enjoy it. Until then, stay safe and enjoy your weekend. You earned it!

 © 2011 by Dale R. Schmeltzle

Generating Repeat Sales-Part 1

The late William Edwards Deming, an American author, lecturer, and consultant wrote about an important marketing phenomenon. He said, “Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.” Mr. Deming’s comment suggests an important question. If repeat customers are so valuable, what are you doing to turn first-time customers into repeat buyers?

A few weeks ago, I quoted Mary Kay Ash, the founder of Mary Kay Cosmetics. She said, “Everyone has an invisible sign hanging from their neck saying, make me feel important. Never forget this message when working with people.” The key to repeat sales is merely to remember and apply her quote. Recognize the invisible sign around first-time customers’ necks. Make them feel important, or they will not give you a second chance. Here is an example of how to generate repeat sales with a preferred customer program. On Wednesday, I will present several other tactics to generate repeat sales.

Everyone is familiar with the example of preferred diner cards where every 10th meal is free. Begin by creating your own preferred customer program, one offering substantial discounts and special privileges like exclusive “after-hours” sales and so on. Promote the program through email, social media and all other communication tools at your disposal. Most importantly, do not overlook your own workforce. Properly trained and incentivized cashiers, sales people and other employees with direct customer interaction will probably recruit more members for your loyalty program than all other sources combined.

Some stores and national chains charge a fee for their preferred customer discount programs. Aside from my reluctance to spend money for something other than actual products or services, I invariably forget to use the program when I make a purchase. I am never happy when I realize I lost an opportunity to save money. On the few occasions where I have been talked into signing up, I rarely renew the program beyond the
initial year. A better alternative to charging a fee may be to offer free membership for those who meet reasonable qualification requirements. Examples would be minimum total purchases over the previous 12 months, or a single large order over a specified amount. This method will provide an additional opportunity to touch customers by communicating their good fortune at having achieved your elite preferred customer status.

Finally, follow up recent sales to first-time customers with a personalized note thanking them for their business. Include with the note a special limited-time offer for a related item. For example, if they recently
bought a pair of shoes, offer 25% off a matching purse or belt. Include an expiration date to create a sense of urgency. Most importantly, introduce them to your preferred customer program, and offer special qualifying
incentives toward membership with their next purchase. For example, if membership requires $1,000 of purchases, offer double or even triple points for all purchases over $100 on their second visit. In short, make them feel important!

On Wednesday, I will discuss ways to generate sales from customers who move out of your area.

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