Tips to get rid of the silent profit-killer hiding in your business.

You can hear it in the phone calls. You may see it reflected in a sloppily clad technician. It often hides in the “meant to” things in your business that are still undone.

None cost you a dime, and therein lies the crackpipe of marketing futility. The first hit “seems” free, yet costly as heck, continually addicting, recklessly damaging.

It’s called customer retention. We all like to think it’s there, working for us because we’re just so darn good at our jobs. No customer could ever forget how timely, fair and magnetically un-leavable we are. Until they actually leave, taking away their business and referrals forever.

Contractors are too often swooned by the cheapness of what I call “anti-retention.” In a still-recovering economy, the damaging effects are horrifically magnified. What is it?

Simply put, anti-retention is anything that doesn’t help you keep a customer. A few of the most rampant culprits in the contracting world:

  • Ignoring them. This is No. 1. Tattoo it on your forehead.

  • Treating noncustomers (first-time callers) and customers the same on phone calls, through marketing and add-on offers. Segmenting makes sense and this is where you start.

  • Setting an appointment and being late without a phone call to alert. Do you like it when your appointments are unapologetically tardy?

  • Failing to explain what exactly you’ll be doing on the call and what the homeowner can expect. The grunting assumption by many techs as they clomp through a home is not charming. The words “rude and irritating” come to the minds of those who too often consider this painfully typical.

  • Not creating a customer ascension model toward a maintenance program that gives customers peace of mind and gets your techs into their homes on a regular basis.

  • Expecting but not engineering referrals for your business.

    There are more, but you get the picture. Don’t send me hate mail that these don’t apply to you until after you start calling your CSRs, or “plant” customers to watch the service call, or ask customers how many times they heard from you after the invoice.

  • The good news

    All the fixes are totally in your control. Too often the smug attitude is, “Oh, well, these things just happen.” This attitude is too costly to consider in this economy, yet it pervades the plumbing industry until you have a climate of complacency and anti-retention that isn’t just deemed acceptable, it’s expected.

    Ask your customers. We made 6,000 phone calls last year, and the results were not pretty. Not my job to be telling lollipop stories here. I can’t think of one thing that will suck the morale, profits and life from a company any faster.

    Patricia Fripp, past president of the National Speakers Association, put it like this: “When you lose a customer, you lose two ways. You don’t get their money. Your competitors do.”

    I’d like to add a third way: You lose their referrals, too. (How many times do you recommend a business you no longer frequent?)

    There’s one awesome solution to this - take A.C.T.I.O.N. This six-step plan can save your business from the evils of anti-retention.

    1. Acknowledge.This is a standard staple of improvement whether you’re in Alcoholics Anonymous or Overeaters of America. Before you can fix anything, you first have to acknowledge that yes, there is a problem in your business, and yes, it’s causing you to lose customers, waste money and miss the profit ship.

    Make out a list of target areas to improve (looking back on comments or complaints is a great place to start), and then get ready to …

    2. Change.You know the areas you need to work on, now it’s time to get down to business. If the problem is appearing professional, have a team meeting and address the issue of dress. If it’s poor customer service, hire an expert.

    The point is waiting won’t get you anywhere. You have to start right now to change the environment of anti-retention before you don’t have a business left to worry about. And that means you’re going to need …

    3. Teamwork.Ever heard that old saying, “The chain is only as strong as its weakest link”? From the receptionist to the CSR to the technician to the accountant, customer retention is the job of your entire team. It starts with a service mentality. Every person’s job, first and foremost, is to take care of your customers.

    When the whole team works together for that single purpose, there’s no limit to what you can accomplish. It’s called synergy and it works.

    4. Implement.You’ve identified your anti-retention areas, started changing them and you have the team together on the same page. Now it’s time to implement proactive customer retention programs. That doesn’t mean spending a bundle of money. You spend $275 to $325 to get a new customer, but keeping that customer is a fraction of those funds - about $3 to $4 per year.

    My personal favorite retention piece is a newsletter program. You can boost your image, have direct response ads, link to your website through new technology such as the QR code and reinforce the relationship with meaningful content in one fell swoop.

    5. Ongoing.Customer retention isn’t a stop-and-go effort. This is a complete paradigm shift, which is just a $50 expression for a complete change in your mindset. Going back to the “before” is no longer even an option. That’s why you’ll notice I said customer retention “program,” not “event.” Make active customer retention a scheduled, automatic and systemized part of your business. A quick seasonal rundown:

  • Spring: Newsletter;

  • Summer: Newsletter and postcard;

  • Fall: Newsletter;

  • Winter: Newsletter and holiday card.

    We can help you get these set up and running with little or no effort, but please hear me on this. I don’t care if you use us or not, but for the sake of your business, get this done by someone!

    6. Nurture. I’m not going to go all “Kumbaya” on you here. We’re not talking about group hugs and nap times - although that may be your cup of tea. What we’re talking about is nurturing an environment that fosters retention. Reward your employees for retention-minded efforts and your customers for their loyalty. You’ll come out ahead on both counts, and guess what? Rewarding loyalty tends to breed more loyalty. How can you top that?

    There you have it. It’s time to wage war on the anti-retention behaviors that have been keeping you from reaching the next level in your business. Remember, customer retention isn’t only possible, it should be the norm.

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