BUSINESSNEWS
Maximising business
from existing customers
It can be argued that existing customers are the best asset
in any business. Benjamin Dyer, CEO of Powered Now,
explores how to make the very best of that opportunity.
» ACCORDING TO RESEARCH DONE
by Frederick Reichheld of the high-end
consultancy Bain & Company, increasing
customer retention rates by 5% increases
profits by over 25%. Of course, this may not
apply so much to small businesses, but it
certainly ought to get our attention.
Generally, it’s more than five times as
expensive to find a new customer than to
keep a current one. And once you have loyal
customers, they’re more likely to spend more,
purchase more frequently and accept quotes
without a quibble.
Of course, most installers already know
this. Particularly in the trade, a huge amount
of business comes from repeat customers.
However, that doesn’t mean it’s not worth
thinking around the best ways to maximise the
potential.
DO A GREAT JOB
The first rule of getting repeat business from
existing customers is to make sure they are
happy. You must allow for this in how you
price your work. You need a bit of margin
so you can sometimes go the second mile in
order to keep the customer sweet. The vast
majority of people will prefer to pay a bit more
to guarantee a satisfactory job.
This is how you can nurture the
relationship. And remember that the other
key to selling more to existing customers is
how well you support them when things go
wrong.
Customers’ expectations and experience on
this issue will have a huge influence on who
they go to next time. A main dealer recently
told me that £2,000 of welding was needed
to get my car through its MOT. The value of
the car was around £6,000 so I got a second
opinion. The local garage had a different view.
They charged me £100 to do the welding and
it then passed its MOT.
I’m left with the distinct feeling that this
might have been a play by the main dealer for
me to buy a new car. I may be wrong, but the
poor service received has damaged what up to
that time had been an excellent relationship.
Up to then we had always paid up without
any murmurs. Now the car will go to the local
garage for servicing too.
When customers ask you to do a big job,
they believe they are buying more than just
that work. They usually have expectations
regarding how you will respond if anything
goes wrong. And that expectation can last over
several years. How you meet their expectations
will influence how much more business they
give you. It will also impact how likely they
are to recommend you to their friends.
REMINDERS
Sending customer reminders of what they
should be thinking about at this point in time
is probably one of the easiest opportunities
to generate more business. It might mean
reminding them that a gas safety certificate
was due or a boiler service was needed to keep
the manufacturer’s guarantee valid. The big
nationals are always trying to muscle in. They
get directly in touch with your customers to
steal them from under you. That’s why it’s
so necessary to get on board with this sort of
approach.
You can manually organise letters or emails
to send to customers, but it’s much easier
with a system, of which there are now many
around.
ESTABLISH A REAL RAPPORT
Establishing a good rapport with customers
is one of those intangible things that is
hard to define exactly. Certainly, it involves
treating the customer, their household and
their property with respect. It also involves
being friendly, while still acknowledging the
fact that one of you is the customer and the
other the supplier. It’s a fine balancing act
that comes more naturally to some than to
others.
What is undoubtedly true is that thinking
carefully about the issue is only likely to
improve things. Today’s customers are
bombarded with lots of conflicting and
contradictory information and advice. The
element of trust has become indispensable
for them to quickly decide what to believe
and what not to. In your area of expertise,
you should aim to be that source of trusted
advice.
MAXIMISE THE CHANCE TO
GET REFERRAL BUSINESS
Although a lot of work comes from repeat
business, new work mostly comes from
recommendation, particularly when your
business is small. However, you will only get
these recommendations if your customers
are really happy. Happy customers pay back
with a double whammy of repeat and referral
business.
After keeping customers happy, it’s probably
only making sure that they remember
you that makes it more likely you will be
recommended. There are points elsewhere in
this article on how to keep you at the front of
their minds.
70 » AUG 2020 » CLEARVIEW-UK.COM