That moment you acquire a new customer: it’s always a great feeling. However, you’re after more than a string of one-off successes, right?Yes: new customers are wonderful. However, a customer’s repeat business can pay handsome dividends. That's why nurturing customer loyalty will not only help you make more money—often more so than simply winning new business—but help your company to grow.
Making more money doesn’t have to (nor should it) come from the result of a hard-sell or sneaky tactics. There are simple solutions you can use to attract, retain, and encourage repeat business. Fortunately, with just a bit of planning and patience, keeping customers around is made that much easier by effectively managing your database.
Below, we'll run through 4 processes, (though be sure to look out for 8 others that may intrigue you) and hang on ‘til the end as well! You'll find a free infographic we've prepared, giving you additional guidance on how to improve customer retention.
1. Customer retention is more cost-effective
While it makes sense to both attract and retain customers, you need to think tactically: there are times when caring for your current customers may trump the need to go out and find new ones.
After all, it’s generally accepted that it costs about five times as much to acquire a new customer as it does to keep an existing one. That’s no small margin!
With that in mind, you need to think about how you’re spending your money, and if you're doing so wisely. For example, advertising through local publications, or even online might get you attention, but unless you’ve established a solid reputation first (made evident through reviews), the conversion rate on your adverts is likely to be low. After all, customers don't want to just see a good deal, they want to know that a service is reliable.
If you work on collecting reviews and feedback from your current customers (making them feel more valued in the process and even increasing the odds they'll use your business again), this is a better investment of your time than if you just threw money at an empty marketing campaign to see what sticks.
A major issue with advertising is that many field service businesses spend money on advertising without really understanding whether it's working. Thankfully, your database could also help you track results in specific time-frames. For example, knowing the number of current users, number of new users, total number of jobs per month, total earnings, all within a single month (or other time span) can be massively useful to know.
It’s important to realise that data like this can help save you money. It can also be a good way to see how you might better invest your capital to obtain better results. For example, say you're tracking a new advertising campaign, but you're not getting the return on investment you'd hoped for. The results you're seeing could be a good indication to act as we mentioned before: invest in establishing a solid reputation with your existing customers, then promote your expertise at a time you can see would be better.
2. Think in terms of lifetime value, not individual sales
We all get a little lazy sometimes; it’s why we can often be tempted to go for a quick win over long term gain. While £1000 as a one-off today sounds great, £500 a year for the next ten years is certainly better. This is especially true if you secure repeat business from multiple customers: your potential to earn increases exponentially. As such, you need to make sure you’re establishing lifetime value (LTV) for your business.
LTV is incredibly important as you continue to expand. It should definitely have been on your mind when you first started out, but long-term profitability must be placed ahead of short term wins. Whether you’re in plumbing & heating, HVAC, electrical, security, or something else, it’s this focus that will keep you afloat.
The LTV is the amount of revenue your business will generate from a customer over the lifespan of them working with you. This could start with a simple boiler service, but depending on how you nurture your relationship, it could turn into a new boiler installation, or even a whole bathroom!
Maximising the LTV might seem like a lot of effort, but it really doesn’t have to be, not if you’ve developed good practices and are taking advantage of a range of automated processes to save you time. With efficient processes and a reliable CRM in place, you’ll be prepared to take care of your customers whether you have 10 of them, 50, 100, or more.
Part of this success will still depend on how well you market your value to your customer. We mentioned automation, and one particularly useful automated process is the use of service reminders. They will provide a touch-point with the customer that, even if it’s just once a year, can be enough to trigger a result.
3. Retaining customers brings in new customers
A business should always welcome feedback, be open to reasonable criticism, and be ready to put things right if the customer is unhappy.
A significant part of retaining customers has to do with referrals, so make sure you’re happy to say: 'if you’re dissatisfied with our service, please tell us. If you are satisfied, please tell others'. What's the best way to get these reviews?
If you don't ask, you don't get.
Whether you ask online, over the phone, or even at the end of the job, you need to ask them to review you, or you’re otherwise relying on chance alone. Reviews are critical to all field service businesses and with more and more consumers making purchasing decisions based on online reviews, it's become increasingly important to have an online presence to helps present (and even show off) how well you treat your customers.
It’s all too easy to spot a business that isn’t engaging and if you're not paying attention, the negative impact can be significant to your success.
This doesn't have to be an expensive venture either. With limited advertising budgets, smaller companies should be encouraging their customers to leave reviews on free, public sites (this also works as a money saving opportunity for larger businesses).
If you're unsure how to approach asking for a review, take our advice from before. Ask. The best way is to simply be honest as well. Explain to your customer that the only way you can grow your business and help others is by getting reviews and referrals—and that you'd appreciate it if they would review you online. Explain that it'll only take two minutes, and that you'll send them an email later that day. One the other hand, you could even have it set up via a tablet or smartphone whilst your engineer is there in person!
Whether they review you online, refer you to a friend, or contact you directly, taking care of your customers can not only lead them back to you in the future, but open the door for their friends, colleagues, or relatives to come knocking.
4. Take your time
Having said all that, retaining customers really is easier said than done—you just need to think long term and be patient: it may take time to see major returns.
“Patience”, they say, “is a virtue”.
It’s a simple point and we certainly understand that being patient isn’t always easy. After all, it's easy to grow tired of a customer who only seems to engage your services for simple, low-margin jobs. However, if you do these smaller jobs well, the customer is likely to put you at the top of their list when the time comes to install a new boiler or entire bathroom; or, if it's a corporate customer, all of their expensive equipment.
Time is as significant an investment as money—you'll know this from when you first set up your database—so make sure you're continuing to invest your time wisely to build trust. If you do, both you and your customers will come to see the benefits and you'll personally find that your customer database grows not just in quantity, but also in quality.
People are smart; they won’t go blindly with any old business: they want a reason (and something more than “because they know you” or “because you're just round the corner”) so make sure you’re giving them reasons to stay.
Work on your relationships, trust in your workforce to deliver consistent quality, and your customers will keep coming back to you. Don't just take our word for it though, there are 8 other methods to help you out when thinking about customer retention.
In addition, we’d encourage you to take a look at our infographic. If you aren’t sure your current tactics are giving you the best results, you should consider the following 6 ways to improve customer retention, and if you're efficiently managing your field service business. You can download the file below, for free!