As a service company, you're obviously continually looking for more and more clients to serve. After all, attracting clients is how most companies grow. But when you say, I want more clients," you really mean, "I want more profitable clients."
Anybody can attract clients, but a company that is going to build a history of growth is going to be one that attracts profitable clients. As you know, not every client is going to be profitable, and as a result not all customers are created equal.
Think about it in this stripped-down fashion. If you spend $200 to get a new homeowner in your area to call you for a service call, but that service call only generates $80 of revenue for you, you've lost money. Even if that service call generated $200 for you, you'd wind up losing money when the costs of the call are taken into account.
So, who are the profitable clients and how do you attract them?
When you think about attracting profitable clients, the secret is that you've probably already got mem. The most profitable clients for your business will always be your loyal clients.
Most of the marketing that companies employ today is focused on attracting the highly sought-after new customer. The competition for new customers is high and the cost is even higher. Do you know what your acquisition cost for a new customer is? If you haven't figured it out in awhile, the figure might shock you.
Attracting those new clients is important because it's the first step to creating a loyal client. But taking that customer relationship into the realm of loyalty requires you to shift some of your focus and marketing dollars away from that hunt for new clients.
Focusing on retaining loyal clients will produce tremendous rewards for your company because over their lifetime, loyal customers will be much more profitable for you, and creating a team of loyal clients who consistently buy from you is the best way to achieve profitability for the future.
That extended profitability is just one of the benefits of loyal clients.
Here are a few other reasons why you may want to refocus your marketing strategy on retaining your best clients:
Marketing Savings. If you focus more of your energy on retaining your clients and servicing them at a high level, you'll need fewer new clients to keep your team busy. That means you can lower the amount you spend going after those new clients.
Higher Marketing ROI. Since your loyal clients know and trust you, every dollar that you spend on them will have a much higher return than a dollar you spend on attracting a new client that may only use you once.
More Trust Means More Options. That trust in your company means that loyal clients will trust your technicians more while they are there in the house. Increased trust means they'll put more stock in the recommendations your team gives them for improving their home and comfort.
Referral Sources. If a client likes and trusts you, there is a much higher probability that they'll tell someone else about you. Not only does that give you great word of mouth advertising, it can generate some immediate referrals.
Repeat Business. When your company is slow and you need calls, you can turn to your loyal client list. Offer them a special deal on a product that may interest them. Since they know your company and you know what needs their home may have, you can tailor an offer specifically to them.
Reduced Price Sensitivity. Every business owner worries about raising their prices, but the truly loyal clients don't buy from you based on price. Other factors like trust, likeability, and service rank much higher. So when the time comes for you to raise your prices to keep pace, you won't have to worry about these loyal clients jumping ship.
Employees' Benefits. When your clients like your company from the start, each call will be easier for your technicians. They may even build a relationship with that client where they are requested each time by name. When your team sees the same customers again and again, they'll develop a comfort level that will make every call more enjoyable. That boosted morale will help you retain even more clients!
As we approach the end of the year and the time comes to make your marketing budget for 2008, take a second look at where you're placing those marketing dollars. You'll get a much higher return if you point a few more of them toward retaining the clients you've fought so hard to win
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