Welcome to the Center for Organizational Energy Blog

Welcome to the Center for Organizational Energy Blog

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Friday, September 28, 2012

Customer Retention

Customer retention is not only a cost effective and profitable strategy, but in today's business world, it is necessary.  This is especially true when you remember that 80% of your sales come from 20% of your customer and clients.  With these statistics, why marketing and sales campaigns designed for the new customers is beyond understanding.
Take for instance the wireless telephone companies; if you sign a new contract you receive a large rebate or even a free cellular phone.  Current customers have the privilege of paying full price.  With this type of promotion, Sales Pro’s organizations just push current customers and clients to seek services elsewhere.
Sales Pro’s organizations need to re-think their marketing and sales strategies.  After all, many experts will share that it's five times more profitable to spend marketing and advertising dollars to retain current customers than it is to acquire new customers.  In years past, the importance of focusing on customer retention was not as important because loyalty came naturally.  We shopped in our neighborhood shops and our corner grocery stores.  We had a personal connection with our service providers and the thought of shopping at another store would have never crossed our minds.  You knew the butcher and he knew you.  Generations today laugh at this idea.  “I never knew the butcher’s name!” 
Thomas Jefferson said, When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.”  Part of the corruption that Jefferson alluded to was the loss of individuality and loyalty.  Our stores are larger and the majority of the sales personnel do not know that you even exist.  Not to mention, today the convenience of the internet contributes to a large portion of our shopping.  Your email address identifies you as the customer.  As a result, customer loyalty has disappeared and large corporations and virtual storefronts are unable to ask the millions of disloyal customers what caused them to stray.
Sophisticated technology and database equipment has made it possible for specialized firms to make attempts at customer retention through database marketing programs.  Establishing a detailed client database allow these companies to keep track of personal information and individual preferences for all of their customers.  This enables them to provide better service and value.  Just like the corner grocery store owner kept information on 200 customers in his head, the large superstore can now keep track of 20,000 customers through its customer database.
A few values-added strategies that you can use include:
·       Membership cards and programs that entitle your customers to special offers, discounts, or preferential treatment - Southwest  Airlines ties credit card services and free trip points together very well.
·       Welcome, acknowledgement, sales recognition and thank you statements.
·       After sales satisfaction and complaint inquiries and surveys; a local beauty salon calls every customer the next day after an appointment to get feedback on the appointment and maintains a Facebook page for public comments.
·       Event oriented communications in which the customer is genuinely interested.  An active Social Networking presence is maintained with blogs, postings, networking sites, Constant Comment, the use of permission based marketing like AWEBER, Brainshark, Skype communication, Applications on I-Phone, I-Pad, I-Touch; for example, Silhouette Optical now allows an application in which you take a photo of yourself and place any of their products on a picture of yourself.
·       Enhanced and empowered customer, after sales, and technical support.  ING bank allows the customer to earn a fee of $10 for each new account referral and the person you refer receives $25.
 

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