Let's say you meet someone for the first time, and during that meeting, you have a great conversation and realize you have some common interests. You seem to look at things about the same way.

You just get a feeling that this is a good person and you may think, "You know, we could be friends."

"Could be" is the key phrase, of course. Because, I'm sure you realize, it would take some specific actions to move from "we could be friends" to "we are friends." And one of the things you'd have to do is stay in touch. You'd have to talk again. You'd have to be in contact with each other.

Now, if you're starting to ask yourself why I'm telling you something so obvious, it's because experience has shown me that a lot contractors act as if "staying in touch" is a principle they've never heard of.

And that's scary, frankly.

In most cases, it costs you in marketing expenses around $275 - $325 to gain a new customer. If you don't keep that customer, you've spent an awful lot for a "one-time" service call.

Each name in your database only represents "could be" customer potential. No, they're not active customers any more than a one-time meeting with someone qualifies them as a friend. You've got to take action for that to happen.

The simple fact is this: regular contact keeps customers. That involves a number of tried-and-true techniques, such as follow-up phone calls after repair or service calls, thank you letters, holiday cards, "customer-only" direct mail offers, and a customer retention newsletter.

If done correctly, that last item — the newsletter — is the centerpiece of a well-run customer retention program. In fact, if you only do one thing, make it a newsletter that goes out at least twice a year.

Fill it with interesting "home care" tidbits so it's not perceived as "advertising" and thus forges a far better image and strengthens the relationship. Better relationship equals better retention.

How to Get a Customer Newsletter

  1. You can do it yourself. If you're prone to writing, designing, graphics, editorial layout, and have experience crafting an informative newsletter that can also sell, then go for it! Many times I speak with contractors who do it themselves the first time, then "run dry" for info on subsequent efforts.
  2. Hire it out. An ad agency or newsletter creation service can create a special one for you, customized exactly as you want it. Unless your database is more than 10,000 or so, the costs can be significant.
  3. Use a "syndicated" newsletter. This is also known as "semi-custom." It is very fast since the template for the newsletter and most of the content is already done. This also makes it far less costly. Some companies offer ‘ads' for your company. Stay away from the overly slick fluffy ones since they don't appear "local" enough to consumers.

A good syndicated customer retention newsletter costs less than $3 a year per customer including postage! Not a bad return on investment, especially since it involves returning customers. Every customer who has written you a check in the last 48 months should be receiving your newsletter.

Always remember, your company's current customers are the absolute #1 source of your future sales. When you lose customers, you lose all of their future business and all of their referrals to your competition. When you keep customers, you keep that pool of sales for yourself. And isn't that a scenario worth considering?

Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors. To receive a free sample of our Fall newsletter, fax your letterhead with the request to 334/262-1115 or e-mail your address and request to freestuff@hudsonink.com. For other free marketing articles and reports, check out www.hudsonink.com or call 800/489-9099.