What’s up with customers these days? It’s like they want better value, quality products, efficient service and someone they can count on. Then, if they don’t find what they’re looking for, they’re on to someone who’s got what it takes.

Perhaps the fiscal cliff and tightening economy made regular folks unwilling to put up with a bad customer experience. The thinking could be something like this, “If we have fewer dollars to spare, let’s spend them with people who care.”

Can you relate? Those of us who have customers also are someone else’s customer, of course, and we’re likely to share the mindset of our own market.

So, what’s the outlook in your market? Over the last few years, the numbers are showing that customers are getting more and more serious about the level of customer service they expect.

Not only that, but these days no one leaves a company alone. With the rise of social media, people have many ways to share a negative story with others. They can do so very quickly with an update to, say, their 500+ Facebook friends, many of whom are in the same market.

In other words, the risk of losing customers is real — and perhaps even a greater risk more than ever. But the good news is that customers are letting us know why they’d be willing to stay.

The path toward customer retention begins with a higher level of customer service. In this new age of consumer empowerment, doing what you say you’ll do inspires confidence. So keep your promises. And, of course, make sure your products and services live up to the benefits you tout. Then take one giant leap forward …

Being known for exceptional customer service means you have to look for ways to exceed expectations. Simply meeting expectations will not get you there. In addition to your promises, go the extra mile. Go out of your way to show how you’re willing to help. Treat customers in a way that shows you value their business. And then put into place a customer retention program that builds on your relationship.

What’s the gain in keeping customers?

In their book, “Leading on the Edge of Chaos,” Emmett C. Murphy and Mark A. Murphy provide numbers that shed light on a topic that should never dim:

• Acquiring new customers can cost five times more than satisfying and retaining current customers;
• A 2% increase in customer retention has the same effect on profits as cutting costs by 10%;
• The average company loses 10% of its customers each year;
• A 5% reduction in customer defection rate can increase profits by 25% to 125%, depending on the industry; and
• The customer profitability rate tends to increase over the life of a retained customer.

Within those numbers are the answers to long-term profitability, whatever the economic environment. And, as a plumbing or heating contractor, you have many factors in your favor to keep a customer retention program running strong.

For example, you know your customers in ways that other businesses do not. Customer information is easy to collect. You go to their homes, so you know where they live. You’ve got their names, addresses and phone numbers. If you’re inputting the information into your database, you know the age of their homes, the last time they called for service and the number of repairs they’ve endured.

The elements of a sound customer retention program are fairly obvious. At their most basic, they involve thank-you cards, follow-up phone calls, reminder emails, customer newsletters, reactivation letters and referral requests. Customer retention is about communication, and you have many ways to start a conversation.

For example, your newsletter isn’t about selling, it’s about becoming familiar to your customers. Newsletters are the premier vehicle for customer contact — if done correctly. An online integrated newsletter filled with interesting “home-care” tidbits is not perceived as “advertising” and thus forges a far better image and strengthens the relationship. A better relationship equals better retention.

Using QR codes to link your offline and online world is an added benefit to your newsletter and can increase website traffic and allow you to fit more quality content (how-tos, energy saving tips, home remodeling) into your newsletter.

Your investment in customer retention is the most cost-efficient marketing you can buy. All the elements mentioned previously would set you back, maybe, $6 per customer. But how much is your investment going to pay you in return? You can start that calculation by knowing that repeat customers spend 67% more than new customers.

The culmination of customer loyalty is, of course, the maintenance agreement, whereby customers pay you to stay with you and, as a result, enjoy a higher level of service and discounts on repairs in addition to routine maintenance. This is a well-planned program that lessens the ups and downs of your cash flow and helps keep you busy and profitable year-round. The foundation of the program, however, is not just an eye toward your own profitability; it’s in being able to provide your maintenance-agreement customers with exceptional service so that the value of the program is without question.

Exceeding in service

Fortunately, if your customers want a better customer experience, you’re in a great position to deliver. After all, as a plumbing contractor, you can truly make a difference in someone’s life.

For example, is there anyone more miserable at home than someone with a very messy plumbing repair? You can fix the problem quickly, efficiently and take his pain away. You can save your customers money on their water bills by fixing drips or leaks. You can give them the peace of mind that comes with filtered drinking water. You’re the way they can have warm showers and clean dishes with an energy-efficient water heater.

Yes, you have much you can do to improve your customers’ home life. By this service in the home, you have the opportunity to enter into a relationship with your customer. While in the home, you can exceed their expectations. Then, after the sale, service or repair, what comes next? You can keep building on that principle of exceptional service by staying in touch, demonstrating how much you care.  

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