In today’s fiercely competitive home services markets, customers will come and go quicker than they did in the days of direct mail and Yellow Pages marketing. But there are ways to ensure you have a better than average chance of keeping customers over the long run.
Jon Ryan, president of Genz-Ryan, Burnsville, Minn., shared his thoughts on customer retention offensive and defensive strategies. Since 1950, Genz-Ryan has lived up to its founding philosophy of providing the highest quality services, exceptional solutions, and unmatched customer satisfaction.
The Competition
Ryan agrees that there’s always a chance that a competitor will make a play to steal a customer. He sees it most often from smaller companies that could be gone tomorrow.
“They’re trying to get established, and they take a shotgun approach to the market. We don’t lose customers to those types of competitors unless we have failed to maintain the relationship. If we’re not servicing the customer they will go someplace else. If we’re doing our job, a 15- to 20-year customer is not going anywhere,” Ryan said.
Ryan believes the COVID-19 pandemic reinforced the principle of trust with many customers.
“People want to work with companies they can trust. There are enough horror stories out there of companies that you can’t trust, or who have taken advantage. They think, ‘I’m letting somebody into my home, and I have no idea of what types of safety practices they’re following, who they’re hiring, and how they’re making sure employees are healthy and working safely.’”
Lower Price
If it’s not an established customer, if we don’t give them any other way to evaluate, they’re going with the lowest offering. They think “ABC Furnace” is a good name, and do some research on the Internet, and see that ABC seems to be the best. Or, they’ll go out and find 12 bids from companies off the manufacturers’ website that lists their certified contractors. The lowest common denominator becomes the cheapest guy.
“The equipment is just one small portion of it. We always tell people, if you’re going to buy from that manufacturer, are you going to call them for the warranty service? No, they’re going to call the contractor, the one they have a relationship with.”
It’s essential to ask questions when you hear a customer is looking elsewhere, but don’t fall into a situation where you have to make a sales pitch and show literature.
“When you get into a price battle, it’s because you’ve made the decision to go down that road,” Ryan said.
Lost in the Shuffle
“The biggest risk of losing a customer to a competitor is typically during busy season, when you’re booked solid for two or three days. Because people think in Minnesota, heating season is our busiest season. No, it’s air conditioning season! Minnesotans are hardy. But we can’t be without air conditioning and hot water.
“June, July and maybe the first part of August is our cooling season. When we get booked out for installations for two or three days in peak season, that’s when we typically have customers who can’t stand it, and start talking to their family or neighbors, who say ‘I found this guy on Craig’s List who was out in two days to install my air conditioner, for only $1000.’ Then they start thinking they’ve been taken advantage of by us. They don’t remember anything else we’ve discussed with them about what they agreed to pay.”
When this happens, Ryan says you must get proactive and start doing the project as soon as possible, even if it’s a temporary fix, such as bringing in some temporary AC, something to get the temperature down to perhaps 75 and reduce the humidity, combined with constant communication with the homeowner.
“Next, have your customer service manager deliver some personalized gifts as way of saying ‘Thank you for waiting.’ We know you understand, but we still have not taken care of you as quickly as we would like to. So, go to dinner on us. You don’t have to spend a ton of money, but just something to let them know you’re still there.”
CSR Dialogue
Ryan said it will often happen that when a disgruntled customer calls to cancel, your CSR will simply take the message and say, “Okay, I’ll let them know.”
“What they need to say is, ‘I will take down your information and have your comfort consultant (or technician or whoever sold the work), follow up with you.’ “ You want to find out if you did something wrong. Is it because of price? Did a competitor came in with a very low bid? Let’s sit down and review it. It may not be an apples-to-apples comparison,” Ryan said. “You have to give customers multiple options, such as no service contract, minimal warranty, or a basic piece of equipment. Then, offer other levels of service along the way. Educate them. Let them make the decision. If you don’t educate them, somebody else will.”
They may also offer a drastically undersized system to come in at a lower cost, or an oversized system, to get a higher sale, because bigger is better.
“In that instance, you tell them it’s going to run constantly and they’re never going to get that humidity removed. With oversizing, the cold damp feeling will remain in the home.”
Neglect
“Yes, that happens. Anybody who says it never happens is a liar. It happens more often with service agreements, when you’re trying to balance technician availability with service agreement work and demand work.
“We’re going to do what it takes to make that customer happy,” Ryan asserted. “Own it. Apologize for it. If you have to go so far as giving them one year of service agreement visits at no charge, do it. Demonstrate that they are important to you.”