Adams Hudson: The problem with 'thermometer marketing'
Do you do it, too? I’m not talking about the marketing of things that read the temperature — I’m talking about contractors who wait on the weather to bring them leads. Or worse — those who answer “How’s business?” with a weather report that begins with, “Well, it hasn’t really gotten hot yet, so…” Tragic.
Sure, your business is weather-related, but if it’s weather-dependent, you have — and let me clear my throat here — a significant marketing problem.
How are you supposed to run a reliable business, to reliably pay reliable employees and yourself, if you’re counting on something as laughably unreliable as the weather? Take all the time you need to answer that.
Also, if you’re not doing much marketing and your competition isn’t doing any, I guess this means all those phone calls pouring in to all the contractors in town are each company’s very own personal customer list, right? Hardly.
Of the calls you’re getting, 60%-65% had better be from your customers. Since service calls dominate the incoming leads during peak season, your sales leads will probably be more from breakdown than from current marketing. So far, so good.
However, that leaves 35%-40% out there in the market, looking for someone to come fix their plumbing issue.
Who are these people?
Well, about 55% of the above “lookers” are customers who migrated from other contractors. Yep, these come from contractors who let customers just walk off and leave. (Translation: They made no retention effort and just hoped the customers would remain loyal.) Sadly, that contractor still thinks these are his customers.
About 16% of the lookers got an ad or offer and responded. These folks were also plucked right off the database of another contractor, too.
Add that up and nearly three-quarters of all the “lookers” have come shopping from other contractors’ databases and are looking to you for help. Great news, right? Only partially.
See, if you’re getting 35%-40% of your calls (lookers) from contractors without a customer retention program, then why isn’t the same thing happening to you? If you don’t have a retention program, then it likely is.
Oops. Yes, now I’m talking about you and your customers who are out calling these other contractors instead of you. Now do you see why most contractors who “wait on the weather” also regularly complain that their business “has leveled out”? It’s not a coincidence.
This is where letting the thermometer do your marketing is not such a great idea. You assume you don’t have to stay in front of your customers. You assume you’re “saving money” by not following a customer retention program. But if you’re not contacting your customer base or otherwise staying in front of them, you’re losing customers just like everyone else. I’ll venture that it’s costing you more than having the program would.
Now you know why you can stay busy all season and assume (there’s that word again) your customer files must be overflowing. But when you look at active customers and 24-month invoices, you detect the dreaded “flat sales syndrome.” In technical terms, your old customers have gone bye-bye, and along with them went their business, future business and referrals.
RETENTION MARKETING CAN CHANGE YOUR WORLD
Plumbing contractors are in the costly habit of servicing a customer once and then thinking they’ll stay as customers. Well, they do stay — right in the customer files, rarely if ever to hear from the contractor again. If they do, it’s generally to be sold something. That’s not a relationship; that’s an obligation. This habit is costing you a quiet fortune.
Customers come into the files fairly well announced, but they leave without a hint. You paid $275-$325 to get them, yet virtually nothing to keep them.
Ask any salesperson at your company and they’ll tell you that customers buy faster, accept the upsell more readily and refer more often. Your salesperson is right. An existing customer buying cycle is 45% faster than a first-time buyer.
Loyal customers spend 33% more than first-timers. Referrals among loyal customers are 107% greater than non-loyal. The rate of referral is highest when closest to the point of contact.
These numbers support the need for regular customer contact. Yet customers aren’t getting that from most contractors. Only a small number of contractors report having a year-round customer retention program.
In other words, you can clobber the majority if you attempt it.
Look to the experts. Jerry Wilson, author of “Word of Mouth Marketing” and whose books have sold in the millions, said that keeping customers is simply a matter of regular communication.
Jay Conrad Levinson of Guerilla Marketing fame said that a customer newsletter is “the best guerilla marketing tool on the planet.”
Here are five rules your newsletter must comply with:
- Make it professional. If it looks amateur, then you look amateur.
- Don’t make it solely about plumbing. Why? You want to inform and entertain, not bore. Likewise, your other info helps position you as an “advisor” instead of a salesperson. Valuable distinction.
- Balance your information with sales copy. Your customers expect to read great info and be sold. Use a more familiar tone in your sales (“advisor”), and you’ll do great.
- Make them regular. Like exercising, it must be regular to build. Twice or four times a year is fine. Since you’re getting more customers, this is the one marketing area you want expenses to increase.
- Integrate it with your online marketing efforts by linking to it via email, social posts and additional content available online.
A well-run customer retention program has at its centerpiece a customer newsletter with pieces that integrate it with your online marketing efforts. They’re simple and quick to use, and customers keep them around. Best of all, if it is well-written and not pure “advertising” like many, you’ll instantly forge a better image and strengthen the relationship.
Better relationships equal better retention. Period.