youtube.JPGfacebook.JPGtwitter.JPGgoogleplus.jpg

800-348-5194 (Toll Free in WY)
email:WSBDC@uwyo.edu

Customer Retention The Old Fashioned Way – Using New Fangled Tools

Nov 20, 2012

One of the things I hear for business clients frequently is that they don’t understand how customers think today.  Actually times haven’t changed that much, but there are new tools that make keeping your customers happy actually work more like things did in my great grandfather’s time.  Back then you purchased from the retailer down the street.  You knew him and he knew you and your family.  There was a relationship, and with that relationship came flexibility.  The old “mom and pop” stores often ran tabs, gave discounts and remembered what their customers liked.   Then came the age of mass marketing where consumers were numbers and entries on a balance sheet, and the personal approach was lost.

 

What’s happening today is a return to the times when merchants and customers had personal relationships.   The difference is that technology has opened a window to enable these relationships to occur between people who are located a great distances from each other.   Karl Wirth, writing on the Marketing Profs website talks about the “7 P’s of Customer Retention”.  These are:

  1. People.   To retain customers you need to build a relationship with your customer as a person, not just a customer.  Start by hiring people who show they care about others.  Many companies now have a “chief customer officer” to ensure that the entire company maintains a people focus.
  2. Product.   Without the right product, you won’t really be able to accomplish any of the “P’s”.  Make sure that your product provides value quickly, retains value over time and is of high quality.  Commodity items don’t generally have loyal customers, so make sure your product is special.
  3. Place.  Location matters when you are locating a physical store, but if you are an online retailer, place still matters.  Your site needs to be easy to find, easy to navigate, and friendly to the customer.  What goes for “bricks and mortar” goes for online merchants as well.
  4. Price.  If you have a relationship with your customer as a person, then you take care of each other.   The new expectation is that customers expect retailers to look after them.  This can be by providing deals for returning customers or by adding services or features without charging more.  Turn your employees loose and they will help you find ways to maintain this relationship.
  5. Promotion.  You should promote to existing customers differently than you do to potential customers.  Why?  Because you should know them.  Target promotions to your customers based on their likes and needs.
  6. Processes.  This is where the new technology comes in.  Where the old corner store owner new his customer by chatting with them when they came in, today’s businesses should use social media, customer surveys and other tools to engage and understand their customers.
  7. Positioning.  Wirth says “If you want to retain your customers, you have to know who you are and communicate that clearly and repeatedly to them so they know who you are as well. Foremost, however, is this: Your actions must communicate your positioning. Those actions are showcased in the people you hire, the product you ship or service you deliver, the price you charge and the discounts you provide, the place and promotions you choose, and the processes you put in place.  Combined, your words and actions say "This is who we are and what you can expect of us."”

 

Bottom line: If you want to succeed with today’s customers, put on your great grandpa’s store apron, and adopt his attitude of treating his customers like friends and neighbors, rather than number and profit centers.  I think you’ll find your customers respond.  

 

What are you doing to retain customers in today's world?



Category: Entrepreneur

Mike Lambert

Mike Lambert is the manager of the Wyoming Market Research Center in Laramie, WY.


Please add a comment

Leave a Reply



(Your email will not be publicly displayed.)


Captcha Code

Click the image to see another captcha.