Commerce: Unexpected benefits cement relationships
The simple phrase, “Would you like fries with that?” heard at McDonald’s millions of times has resulted in sales of billions of dollars of french fries. The phrase was made popular before we all used terms like “customer relationship management” (CRM). It may have been common sense to an experienced restaurant operator that if you asked, you could often get your best customers to buy even more, but it certainly was not a widespread practice at the time.
Today, with the fragmentation and high cost of media and personal sales efforts, it is much more expensive to get a new customer than it is to keep and get more sales out of the customers you have. Some estimates are that for some categories, it may be as much as 40 times more expensive to get a new customer than it is to maintain the ones you already have.
Look at the prices paid by cable and phone companies when they acquire competitors. The price paid per customer is astonishingly high. Their CFOs have run the numbers and have determined that is it is often less expensive to buy the customer than it is to build one from scratch. Consumer package goods companies often have to offer free packages just to get someone to try their new product. Even free offers are often not enough. It is difficult and expensive to get someone to change his or her behavior. People are creatures of habit.
Why, then, don’t more companies do more for the people who already are buying their products and services? Increasing bonds with existing customers is usually easier and less expensive than trying to wrestle them away from your competitors.
Creating greater bonds with your customers also makes it more difficult and expensive for your competitors to take them away from you.
Offering unexpected benefits is one way to help cement your relationship with customers. A simple example is the bar owner who might occasionally buy a drink for her better patrons. Her prices may not be any cheaper than her competition’s, but the surprise bonus of an occasional free drink helps strengthen the relationship. Stronger relationships with your customers make it easier to sell them more and more difficult for competitors to take them away.
Another bonding idea is to offer free advice or education to help your customer. Simply educating your customers on additional uses for the products or services they are currently buying from you may lead to additional or more frequent sales.
Joining with other complementary businesses to offer combined promotions on products your customers use is another approach. Rewarding your current and regular customers with savers clubs and continuity programs are additional ways to keep them coming back.
There are a number of sophisticated customer relationship software packages available today and many of them do more than pay for themselves with increased sales. Most of these programs help track customer purchase patterns and suggest cross-selling and up-selling opportunities. Most of these programs rely on time-tested statistical relationships between product purchases. An example might result in a suggestion similar to what you get when you buy a book on Amazon’s website: If you like the “X” book, you might also enjoy the “Y” book.
A simple way to get started, however, is to simply ask for more from your current customers. One of the best people I know who has always done this very well is John Gillen. John started Telmark sales in Appleton and later sold it to West Business Services. Before John started Telmark, he was a vice-president of sales for Kimberly-Clark. When John would travel with his sales people, he would challenge them to make their best presentation and sell the customer all they could. He directed them to turn the presentation over to him when they were done and said that if he couldn’t then sell the customer something else, he would buy the sales person a steak dinner at the best place in town. I never knew John to buy many steak dinners. He always was able to sell the customer on an extra item. It may have been a little item for the checkout lane or a few extra cases for an upcoming promotion or display, but it was always something.
What can you do to increase your relationship with your current customers? What unexpected bonus or information could you provide? What do your customers need or want (that you can offer), which they are currently getting somewhere else, or not at all? What products do they buy from a competitor that you could bundle with something you are currently selling them? What is your equivalent of “Would you like fries with that?”
About the author: Scott Francis is the president of Topline Development marketing consulting and co-founder of Snap Lab Media™, the marketer of SnapTRAC™ software as a service for advertising agencies and larger enterprises that rapidly builds mobile websites, generates QR codes and provides analytics without the need for programmers. Visit SnapLabmedia.com, call (920) 722-1317 or email Scott at Scott@SnapLabMedia.com.