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Customer Loyalty

Strategize And Plan For Loyalty

If you currently retain 70 percent of your customers and you start a program to improve that to 80 percent, you'll add an additional 10 percent to your growth rate. Particularly because of the high cost of landing new customers versus the high profitability of a loyal customer base, you might want to reflect upon your current business strategy.

These four factors will greatly affect your ability to build a loyal customer base:

  1. Products that are highly differentiated from those of the competition.
  2. Higher-end products where price is not the primary buying factor.
  3. Products with a high service component.
  4. Multiple products for the same customer.

Market To Your Own Customers

When you buy a new car, many dealers will within minutes try to sell you an extended warranty, an alarm system, or rustproofing. It's often an easy sale and costs the dealer almost nothing to make. Are there additional products or services you can sell your customers?

Use Complaints To Build Business

When customers aren't happy with your business they usually won't complain to you - instead, they'll probably complain to just about everyone else they know - and take their business to your competition next time. That's why an increasing number of businesses are making follow-up calls or mailing satisfaction questionnaires after the sale is made. They find that if they promptly follow up and resolve a customer's complaint, the customer might be more likely to do business than the average customer who didn't have a complaint.

In many business situations, the customer will have many more interactions after the sale with technical, service, or customer support people than they did with the sales people. So if you're serious about retaining customers or getting referrals, these interactions are the ones that are really going to matter. They should be handled with the same attention and focus that sales calls get because in a way they are sales calls for repeat business.

Reach Out To Your Customers

Frequent contact with current customers is a good way to build their loyalty. The more the customer sees someone from your firm, the more likely you'll get the next order. Send Christmas cards, see them at trade shows, stop by to make sure everything's OK.

Send a newsletter to your customers. Send them copies of any media clippings about your firm. Invite them to free seminars. The more they know about you, the more they see you as someone out to help them, the more they know about your accomplishments - the more loyal a customer they will be.

Loyal Customers and Loyal Workforces

Building customer loyalty will be much easier if you have a loyal workforce. It is especially important for you to retain those employees who interact with customers such as sales people, technical support, and customer-service people. The increasing trend today is to send customer-service and technical-support calls into queue for the next available person. This builds no personal loyalty and probably less loyalty for the firm. Before you go this route, be sure this is what your customers prefer. Otherwise, assign a specific support person to every significant customer.

By Source Streetwise Business Tips


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