For years – decades even – contractors have focused their time, energy and marketing dollars on acquiring new customers.
I read a recent article about a Harvard Business School research report that proves what I’ve been saying for years… namely that engaging your prior clients is a darned good marketing strategy.
What the Harvard research report actually said is this: “Increasing customer retention rate by just 5% increases your profits by 25 – 95%.”
I love being right…
In my experience, far too few contractors do anything to stay in touch with their past customers.
The fact is that there is probably a goldmine buried right in your past client files.
Let’s look at the data to validate this point. We’ve been publishing a poll for several years, with hundreds of responses, asking readers to explain where they get most of their business. The result: Most say they discover their business through repeat customers and referrals/recommendations. Between the two, the volume is in the low 70 percentiles (currently it is 71 per cent, with 29 per cent from repeat clients, and 42 per cent from referrals.) I’m happy that advertising comes in third (because that is how I earn my living) but it is a far distant 13 per cent. (Leads services generate 11 per cent and telemarketing and canvassing, thankfully, are a one-in-20 deal at 5 per cent.)
“Keeping in touch” of course is important for both repeat and referral business. If you lose touch with your clients, they won’t think about you when it comes time to refer someone else, and (worse) they may go to another contractor or specialist when you could do the job well.
Heer advocates client newsletters as an effective “keep in touch” strategy, and I agree — in part because they are relatively easy to manage and administer once you organize the process. I also think there is real merit in association/community involvement. You’ll have reason to “stay in touch” through projects, meetings and common-cause activities, without being a pest.