Confusing Revenue for Relationships
Be forewarned: this advice is not all pretty, just like business today. The silver lining is that the new economy is forcing a move from shiny wrapping (indulgence) toward valuable content (importance). As during any transition, confusion reigns.
Richard Branson, the billionaire businessman, once blogged, “When it comes to business success, it is all about people, people, people.” Interestingly, he followed up with, “Every entrepreneur and business leader is trying to uncover the same secret: What will help them grow their customer base and keep those clients loyal?”
The billionaire speaketh sage advice for all, most notably what follows the word “and” above.
Most contractors see the goal of “acquisition” to be “revenue.” Most anyone can get x closing ratio out of y leads. That’s a short-term, revenue-driven goal.
Yet, the goal of your very expensive acquisition marketing should be very inexpensive (but lucrative) retention marketing. Why? Because of the relationship, resales, referrals, and recurring revenue that come from retention marketing. That’s why, according to more than one billionaire.
In our current economy, retention is the new acquisition.
I’ve said it before and I’ll keep saying it: It’s always all about the customer. You could write the most persuasive ad, create the most expensive design, purchase the most expensive media, and, no matter what, it always comes back to the customer. Only the customer can see the value in your offer, make the decision to follow through, and stay with you after the sale.
Without exception, our top-grossing, top-growth clients who’ve set sales records in this new economy are retention experts. They think past the sale.
You cannot survive on one-time sales or one-time customers—multiplicity of effort rules. Extract
marketing efficiency by forcing your company beyond just “getting the lead and closing the sale” by adding in “and keeping the customer forever.” This will pay huge dividends.
To me, the degree to which you ignore or engage your customers is the exact degree they will do the same to you. They are just looking for someone who appreciates them, and in this way, are we any different? Show them. Here are a few quick ideas:
- Vividly demonstrate appreciation. This is by action. Call, send a card, e-mail, newsletter, gift. Ignore them; they ignore you.
- Inform of pending change. Your prices going up? Tell them so they can buy at the old price. You’re adding a service? Tell them and sell them.
- Extend the customer community. As evidenced by the social media boom, you want your customers to be your advocates, inviting others. You must encourage them to refer and praise what they like about you. Hint: It isn’t your trucks, booties, or tool rack. It’s the relationship with your people.
- Give something worth reading. Newsletters are the premier vehicle for customer contact if done correctly. A newsletter with online integration filled with interesting home-care tidbits can generate huge responses. Best of all, this is not perceived as advertising and thus forges a far better image and strengthens the relationship. Better relationship equals better retention.
As the new economy finds stability, it is wise to seek clarity. Enlist this in your marketing and even more in your business philosophy.
Remember, as an electrical contractor, you have much you can do to improve your customers’ home life. By this service in the home, you have the opportunity to enter into a relationship with your customer. Don’t ruin that relationship by constantly pushing the sell. You cannot benefit unless they benefit.
Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors and a Bronze Industry Partner of Independent Electrical Contractors. Insights readers can get a no-cost “Customer Retention Report” and a Fall Newsletter Sample by emailing a polite request to INSIGHTS@hudsonink.com or by faxing their company information to (334) 262-1115. See other marketing reports at www.hudsonink.com or call (800) 489-9099.