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,” still undone things in your business that don’t cost you a dime, yet are costly as heck and recklessly damaging.
It is customer retention, or the lack thereof. 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-leave-able” we are. Until they actually leave, taking their business and referrals … forever.
Contractors are too often swayed by the cheapness of what I call “anti-retention.” What is it?
Put simply, anti-retention is anything that doesn’t help you keep a customer. A few of the most common culprits in the contracting world are:
• Ignoring customers. This is No. 1. Tattoo this on your forehead.
• Treating noncustomers (first-time callers) and returning 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 customers. 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 keeps them comfortable — and you regularly in their homes.
• Expecting, but not engineering, referrals for your business.
There are more, but you get the picture. Don’t send me hate mail claiming these don’t apply to you until after you’ve called your CSRs, or you plant customers to watch the service call, or ask customers how many times they’ve heard from you after the invoice.
The good news is that all the fixes are totally in your control. Too often the smug attitude is, “Oh well, these things happen.” This pervades the plumbing and heating 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.
I can’t think of one thing that will suck the morale, profits and life from a company any faster.
There’s a saying in the sales industry: “When you lose a customer, you lose two ways. You don’t get their money. Your competitors do.” I’d like to change that slightly to three ways: You lose their referrals, too. (How many times do you recommend a business you no longer frequent?)
One awesome solution is to take A.C.T.I.O.N.
The six-step A.C.T.I.O.N. plan
This plan can save your business from the evils of anti-retention.
1. Acknowledge. This is a standard staple of improvement whether you’re in AA or Over Eaters 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. If you have no idea how to start, the Hudson, Ink Coaching Club is a good start. Waiting will get you nowhere. You have to start today, right now, to change the environment of anti-retention before you don’t have a business to worry about. (Sorry, but sometimes the truth hurts!) And that means you’re going to need …
3. Team work. Ever heard the 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 single 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, begun changing them and you’ve got the team all together on the same page (right?). Now it’s time to implement proactive customer retention programs. First, that doesn’t mean spending a bundle of money. You spend $275 to $325 to get a new customer, but keeping the customer is a fraction of that — about $3 to $4 a piece. My personal favorite retention piece is a four-season newsletter program. You can boost your image through direct response ads and reinforce the relationship with meaningful content all in one fell swoop. And with it you can improve your online efforts.
A client recently put it this way: “After a year of testing the newsletter, I’m glad to say that we’ll continue. Sales to our house list increased by $270,000 over the previous year, with no other marketing efforts.”
How’s that for a return on investment?
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 should notice I said customer retention “program,” not “event.” An active customer retention program is a scheduled, automatic, systemized part of your business.
6. Nurture. Now, I’m not going to go all “Kumbaya” on you here. We’re not talking about group hugs and nap times — though 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?
So, there you have it. It’s time to wage war on the anti-retention behaviors that have kept you from reaching the next level in your business. Remember, customer retention isn’t only possible; it should be the norm.
This article was originally titled “The silent profit killer” in the October 2015 print edition of Plumbing & Mechanical.
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