The “lifetime value of a customer” concept is based on the fact that it is much more cost effective to keep a good customer than to attract a new one.
All customers have a lifetime value. Large ticket items such as air conditioning units may not be frequent buyers, but keeping them coming back is important because of the profit margin. Frequent customers buying smaller ticket items like pool supplies are equally important.
Small touches are important. If you purchase an $8,000 air conditioning unit, you should get a thank you card followed by a phone call in two to three weeks asking how the unit is working. Following that, two to three other touches per year are necessary for customer retention.
Small ticket items require a different approach: number one is staff attitude, everything from the smile to the greeting to the thank you. There may be an opportunity to send newsletters with information on new products or services. A customer reward system, properly implemented, is another good retention program.
Each individual business has to review their customer retention procedures. It cannot be left to chance; it has to be a consistent system. Like all operating systems within a business, the customer process has to be under constant surveillance. This is the first place to check when there is a slowdown in business.
“A satisfied customer is the best business strategy of all.” Michael LeBoeuf
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