Every contracting business wants more customers, right? Well, yes and no. To keep your business strong, it’s certainly important to use marketing to generate leads and discover new prospects. But if that’s all you’re doing, you’re overlooking a very important and very natural method for bringing in business.
Marketing success isn’t a secret; it’s a strategy. And determining the right strategy begins by asking the right questions. For instance, consider the following questions that I ask at seminars around the country:
- Who buys faster … the existing customer or the first-time caller?
- Who’s more likely to pay more … the existing customer or the first-time caller?
- Who’s more likely to buy the upsell … the existing customer or the first-time caller?
- Who’s more likely to refer others your way … the existing customer or the first-time caller?
Right about this point in any seminar room, you’re likely to hear shouts overwhelmingly in favor of the “existing customer!” But just after they confidently yell their answers, the other question I stump them with time and again is: “And lastly, how many of you have a customer retention program in place?”
With that, you hear sickening sighs of discontent from the previously excited horde. The color fades from their faces as they see the error of marketing purely for acquisition. Perhaps you’re a tiny bit pale right now, too. In an odd way, I hope so, because pain precedes change. And at least now you’ve realized your error, and are ready to hear what to do about it.
Retention marketing is about keeping the customers you already paid to acquire. A customer retention campaign investment will range from a minimum of 6 percent to 8 percent of your total marketing budget. But it pays you well beyond that in the aforementioned benefits provided by existing customers.
If you’ve employed some of the most fundamental elements of customer retention, including maintaining regular contact through regular mailings, you’ve made a wise investment in your relationship with customers.
But let’s get more specific about these regular mailings. Of course you’ll want to make your customers aware of special offers, but if that’s all you’re doing – contacting them to sell them something – it’s a big turnoff.
That’s why the customer newsletter is by far my favorite part of customer retention. And that’s because of an important reason – a newsletter filled with interesting and practical information is not perceived as advertising, and, thus, forges a far better image and strengthens your relationship with your customers. It’s perceived as being helpful, rather than being pushy.
As a contractor, you’re an expert at what you do. So why not share your knowledge with customers in the form of a professionally produced newsletter? They’ll appreciate you for it. And as you use effective marketing tools like newsletters to improve your relationships with customers, you’ll also improve your retention of same.
Make sure you send newsletters between two and four times per year to every customer who has written you a check in the last 48 months.
For those who do it right, customer retention newsletters are among the most cost-efficient marketing methods around. After all, it costs you $275 to $325 in marketing costs for each new customer, and that’s money you’ve already willingly spent. Now, to keep those dollars working for you, you’d only need to spend another $3 per year per customer for a good customer retention newsletter.
Isn’t keeping your customers worth that small price? I trust the answer to that question is a big, resounding “Yes!”