It’s an axiom of business that it costs much more to recruit a new customer than it does to reap more sales and profits from an existing one. Just about every business owner knows that, says Andrew Sobel, author of Clients for Life, which makes it all the more puzzling that so many don’t bother to pursue a greater return on their “customer capital.” Paying more attention to your existing customer list may represent one of the lowest-cost, highest-return marketing strategies available anywhere.
“Small and medium-sized business owners need to stop thinking about customers as one big mass and start concentrating on those customers who are most valuable and form the base of their business,” Sobel says. “Segment and tier your customer base. Get to know what’s most important to your top customers. Call them up and ask them what you can do to be more helpful to them.”
Alan Weiss, an organizational development consultant and author of The Consulting Bible, recommends rewarding your best customers for their continued patronage and for referrals. “To get the best return on customer relationships, provide your best customers with incentives like ‘early’ and ‘insider’ bargains,” he says. “Maintain a highly visible, interactive web presence with special places for your best customers.” The flip side of maximizing return on customer relationships is making sure that your time and your staff’s time is not usurped by poor and complaining customers, “which is usually the case,” he adds.
Maintaining high service levels is one key to building customers for life, says Lynn Daniel, a management consultant focused on the B2B industrial market. Her firm, The Daniel Group, provides a transactional phone survey process used by 75 percent of the Caterpillar dealers in North America, and it has allowed Daniel to document the important role service plays. “By improving their service levels, dealers are getting more business from existing customers,” she says. “Work that the customer might have done internally or had done elsewhere is now being taken to the dealer.” She adds that while the higher level of service often requires internal changes for the dealer, the payoff in increased customer satisfaction and incremental business more than offsets the cost of those efforts.