Hey kids, it’s time for “Ask Mr. Marketing Person!”

Question #1: Dear Mr. Marketing Person, I try to get leads from my best customer list all year long, but my response keeps going down. So, why are my lead generators not generating leads?

Answer: Imagine you have a friend, neighbor, or acquaintance who sells insurance. After you eventually decide to buy from him, every time you see him, he offers you more insurance. Although you’re his customer, you’d rather avoid him and are not sure if you would refer him. As his requests continue, his credibility and value decline.

The same applies to the decline in your response rate. It’s attributable to one word: relationship. The relationship with the insurance guy denigrated to a self-serving onslaught of “buy now because I need it.” Your credibility suffers as this becomes the sole tone of your contact.

Question #2: “Please don’t yell at me, Mr. Marketing Person. I’m in a corner now, spanking myself with the Yellow Pages because I don’t have a retention program. How can I do better?”

Answer: You can start by putting the phone book down. Then, realize that your relationship with customers dictates responsiveness. Just as continually pounding them with offers is a great way to drive them away, it’s not quite as bad as what most contractors do: Nothing.

Many contractors mistakenly assume that “being in the customer base” and “being a customer” are the same thing. They’re not.

A full 71% of your lost customers leave because you paid no attention to them. Therefore, if you don’t put energy into customer retention, you’ll lose the very customers you paid to attract in your lead generation campaigns. A pity really.

You paid $275 to $325 to obtain them. You let ‘em leave for nothing, into the waiting arms of your now-salivating competition. I’m sure he appreciates it. I’m equally sure your customers don’t call to tell you they’ve left. If they wander off and you have to attract them again, there goes your acquisition money again.

The Cost of Losing a Customer

Customers pay more than first time callers. They buy faster. They refer more. They more readily buy your upsell. They’re worth treating differently, don’t you think?

The great news is that retention costs only a fraction of acquisition. Some shorter sighted contractors say, “Hey, why should I invest anything more? I’ve already got them.” They don’t realize that the cost of keeping customers is the bargain. It’s the cost of losing them that’s staggering.

Fortunately customer retention only takes a minimal investment. For all its benefits, a proactive, effective customer retention campaign needs only 8 to12% of your marketing budget to flourish.

A Simple Retention Plan

  1. Thank you card or “happy call” four to seven days after service or install.
  2. A follow up letter that includes a refrigerator magnet, service sticker, Yellow Page diverter technique (a sticker with emergency numbers to go on the cover of their phone book), or other reminder premiums, if these weren’t left by the technician.
  3. Holiday card (two per year, winter and summer)
  4. Newsletters, two to four times a year. (Generally not to overlap with the above.)

That’s it. As you would imagine, the last one is the most impressive. It’s the equivalent of having a cup of coffee with every customer a few times a year. Send a newsletter only to customers who have been active within the last 48 months. (Some contractors go back 60 months to reactivate customers but that’s under special circumstances.)

Three things you want to avoid with your newsletter:

  • Do NOT make it a promotional piece or it will end up in the trash.
  • Do NOT make it only about the industry or it will bore them into near depression.
  • Do NOT make it so soft that people can’t even figure out the connection between the articles and your HVAC business.

Your content should advise customers about matters in and around the home. It should also contain some fun facts, some serious info, and some service/products sales data.

We maintain a 70/30 ratio of information to sales as a good balance. Our newsletter also contains psychological triggers that are gentle sales messages meant to send buying signals, but not be perceived as ads (see above to get a free sample).

A newsletter is to be perceived as friendly, helpful information about such matters as energy-saving ideas and home improvement trends.

Ads in your newsletter should be customer focused, such as discounts, upsells, referral inducements, or maintenance agreements information.

However, remember, this isn’t a response campaign. It’s a retention campaign; a reward for doing business with you.

The Problem

You can write your own newsletter, but it seems that no one on staff has the time, talent, or technique to produce a good one regularly (and regularly is what they’d better be, since retention is a program, not an event).

I hear of contractors who send out one newsletter, thinking this should do it and button up the effort. Or perhaps they said all they knew how to say in one or two issues and gave up.

Although manufacturers also offer newsletters, some contractors may not want to have a copycat version of every other dealer of that brand. However, something is much better than nothing.

You can also choose from any of several syndicated newsletters that range from “fill-in-the-name here” to full custom versions with the associated price and quality variances.

Regardless, your customer’s attention span is about as short as the time it takes to close the door after you’ve finished your job.

They’re continually bombarded with messages from every competitor you have. It doesn’t take much for them to be distracted and migrate away. Keep your name in front of them to stand out and to remind them that you’re their contracting company.

Treat your customers differently. Remind them of your value by creating value with relationship building tools and techniques. As you do, your sales messages to them are far better received. You’ve already invested heavily to acquire your customers; it makes sense to invest a few dollars to keep them paying, staying, and referring.

Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors. Visit www.hudsonink.com for other free marketing articles and to register for the upcoming free teleseminar. Send your questions to questions@hudsonink.com.