More Customers Isn’t Your Goal

July 1, 2010

By Adams Hudson

Every plumbing contractor wants more customers, right?  Well, yes and no.  To keep your business strong, it’s certainly important to use marketing to generate leads and discover new prospects.  But if that’s all you’re doing, you’re overlooking a very important, natural method to bring in business.   

Marketing success isn’t a secret; it’s a strategy.  And determining the right strategy begins by asking the right questions.  For instance, consider the following questions that I ask at plumbing seminars around the country: 

 Who buys faster… the existing customer or the first-time caller?
 Who’s more likely to pay more… the existing customer or the first-time caller?
 Who’s more likely to buy the upsell item… the existing customer or the first-time caller?
 Who’s more likely to refer others your way… the existing customer or the first-time caller?

At this point in any seminar room, you’re likely to hear shouts overwhelmingly in favor of the “existing customer!” But just after they confidently yell their answers, the other question I stump them with time and again is:  “And lastly, how many of you have a Customer Retention program in place?” 

With that, you hear sickening sighs of discontent from the previously excited horde.  The color fades from their faces as they see the error of marketing purely for acquisition.  Perhaps you’re a tiny bit pale right now, too.  In an odd way, I hope so, because pain precedes change. At least – now you’ve realized your error and are ready to change it. 

Retention marketing is about keeping the customers you paid to acquire.  A customer retention campaign investment will range from a minimum of 6-8% of your total marketing budget.  But it pays you well beyond that in the aforementioned benefits provided by “existing customers.” 

If you’ve employed some of the most fundamental elements of customer retention including maintaining contact through regular mailings, you’ve made a wise investment in your relationship with customers. 

But let’s get more specific about these “regular mailings.”  Of course you’ll want to make your customers aware of special offers, but it’s a big turnoff if all you’re doing is contacting them to sell them something.

That’s why the customer newsletter is by far my favorite part of customer retention.  And there’s an important reason for that. A newsletter filled with interesting “home care” tidbits is not perceived as “advertising” and thus forges a far better image that strengthens your relationship with your customer.  It’s perceived as being “helpful” rather than being “pushy.”

As a contractor, you’re an expert on the “home.”  So why not share your knowledge with customers in the form of a professionally produced newsletter?  They’ll appreciate you for it.  And as you use effective marketing tools like newsletters to improve your relationships with customers, you’ll also improve your retention.

Make sure you send newsletters between 2-4 times per year to every customer who has written you a check in the last 48 months.

For those who do it right, customer retention newsletters are among the most cost-efficient marketing methods around.  After all, it costs you $275-$325 in marketing costs for each new customer, and that’s money you’ve already willingly spent. To keep those dollars working for you, you’d only need to spend another $3 per year per customer for a good customer retention newsletter.  

Isn’t keeping your customers worth that small price?  I trust the answer to that question is a big, resounding “Yes!”  
 

Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors. You can get a free sample of their Customer Retention Newsletter by faxing your request to 334-262-1115, by calling 1-800-489-9099 or email phcc@hudsonink.com. You may also visit www.hudsonink.com for other free marketing articles and reports.


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