Turning Customers into Clients: Acquisition v. Retention

Are you spending more on acquisition or retention? If you said ‘acquisition,’ you’re wasting time and money.

Estimates that 20 percent of customers account for 80 percent of total revenues in most businesses is useful news. Consider it a wake-up call!

Finding a new business is expensive and often unrewarding, So why spend time and other resources attracting new customers until optimizing the profitability of your existing client relationships?

Service is a customer-focused activity, but there’s plenty in it for you, too. No matter what business or profession you’re in developing and maintaining healthy client relationships increases your opportunities for back-end or follow-up sales and can spin off endless chains of high-leverage, well-qualified referrals. Building on your customer base also increases profitability, since it cuts front-end marketing time and costs; but it’s the quality of client relationships that affects how much business you may do (or not do) with those people in the future. It can also determine how they feel about recommending you to potential new customers and clients.

Technically, in most businesses, when you make a sale you don’t have a client, you have a customer. A customer is someone who buys from you once; a client is someone who will buy from you again and again. Clients who trust you, your products, or your expertise will come to you (and maybe only you) whenever they want or need the information, products, and services you’re offering. A client relationship is one in which the buyer and seller both agree that the first transaction was not a one-time event.

Though they may differ a bit depending on what type of business or profession you’re in, client-management goals are clear:

• Proactively servicing existing business;
• Meeting additional needs as the client’s situation, needs, wants and problems change; and
• Getting referrals and introductions to qualified prospects or new customers.

“How’m I Doing?”

The buyer must accept the “Client” status; it’s not a label that can be stuck to the buyer by the seller. Client relationships must be cultivated and nurtured to stay healthy. To borrow a line from former New York mayor, Ed Koch, simply asking clients, “How’m I doing?” is a great way to find out.

Client-building is characterized by continuous contact and mutually beneficial relationships evolving over time. The post-sale period is exactly the wrong time to take buyers for granted.

• In retail and service businesses and for professional practices, thank-you cards and phone calls are courteous and business-like; progress reports may be useful in some situations.
• Online businesses need to give people reasons to stay—and come back. Tell visitors how they will benefit by staying on your Website. The site should be user-friendly, build rapport with visitors, and be easy to find and purchase what visitors are looking for.

All businesses need to provide value, quality products, and excellent customer service. Keep offering products and services to your customers; once you have them, customers will stay with you and buy your products and services as long as they’re of value to them. However, businesses that care about repeat sales need to be contacting customers informally several times a year, in addition to holiday messages and contacting clients more often. And in addition to those routine contacts, professional practitioners should add regularly scheduled plan reviews and other routine service contacts to their client-building repertoires.

It can add up, but today’s SBOs have really simple and powerful ways of delivering much more to their clients and customers with less effort since virtually all service contacts can now be automated.

E-Communications – It’s Expected!

Everything from thank-you messages, birthday, and holiday greetings to reminder notices and back-end sales messaging have become standard customer/client communication initiatives. People now expect email service notifications and other communications, and SBOs who aren’t using them are at a disadvantage.

At the same time, a lot of businesses are dropping the ball when it comes to acknowledging receipt of customer inquiries or responding to customer emails as soon as they should. Following up within 24 hours is ideal; a 48-hour turnaround is acceptable: beyond that is pushing it. It has been found that nearly one-third of companies either took three days or longer to respond to customers’ email inquiries or never responded at all (with luck, that third includes your competition!)

But if it includes you, you’ve got a problem…but a problem that can be easily fixed with automated messaging software or messaging features built into e-mail systems. Meeting basic customer service needs improves customer/client loyalty and increases repeat sales.

Automate! Automate! Automate!

Just as understanding the people you’re looking for makes it easier to find more of them, a market segment’s unique make-up can help you organize market-appropriate communications. As consumers become increasingly savvy, so does the benefit of targeting all communications, not just promotional messages, to the needs, interests, and buying behaviors of each of your markets. Today’s e-commerce technology can help you readily tailor communications to each market segment.

Try These:

• Auto-respond to all emails.
• Use the FAQ approach: “Most people contact us to ask one or more of the following FAQs. If the reason for your message is not there. Call us at xxx-xxx-xxxx. Thank you for visiting ________.
• End with an action-step that captures customer information, makes them an offer or sends them back to your site.
• Email by criteria. That is, different messages automatically sent to different categories of clients whom you want to do different things, or to customers in different market segments to get back-end sales of different products and services.

As for being buried in that notorious mountain of email, we all get–spam or otherwise? No sweat! Building solid client relationships, offering value, and having relevant, personalized communications will get your messages opened.