Think yours are already loyal? Think again, friend.
Business owners in your industry rarely lack self-confidence. No surprise, because it’s a critically important trait when building and growing a business. You need to have confidence in the people you hire and in the companies you do business with, too.
But there’s a dangerous side effect to healthy self-confidence about your business. It’s when you start thinking about your goals as though they were realities. You talk about how fiercely loyal the thousands of homeowners you’ve served are and how eager they’ll be to call you the next time they have a need. You haven’t done any business with them in a dozen years. In fact, you have no idea that a year ago, your competitor installed a nice new system in their home.
You don’t have much repeat business
The data doesn’t lie. Every owner wildly overestimates the percentage of customers who are likely to return. The exception is homeowners who have a maintenance agreement, but in our experience, that represents only about 10 percent of the average company’s book of business. That means 90 percent of the homeowners you consider to be loyal customers don’t have any reason to do business with you or a competitor until they have a need. And 75 percent of the revenue you earn from a customer shows up during the first year.
Are you marketing the wrong way?
If you want to build true loyalty and increase the revenue you receive from your existing customers, your company’s marketing needs to address five critical goals:
Goal #1: Get more business, more often
The better you get to know your customers and their homes, the greater your opportunity for additional sales. One of the most effective strategies you can use may seem old-fashioned. We recommend establishing a cadence of direct mail postcards to everyone in the field management software (FMS, also called a customer relationship management or CRM system). By mailing them quarterly, you not only remind the customer that they’ve been happy with the work you previously did with them, but you also alert them to other services they may want to use, allowing you to benefit from pent-up needs you didn’t know they had.
Goal #2: Gently encourage spending
Getting customers to spend more money with you is really all about paying attention. Owners tend to believe their technicians do a great job of educating customers about the full range of products and services, but it’s human nature to take the easy way out. Think yours are different? Take a look at your service tickets. How many include items that weren’t part of the initial call?
Goal #3: Referral programs that work
The typical customer referral program is pretty crass. Cough up your friends’ and neighbors’ phone numbers and I’ll hand you a few bucks. What if there was a way to instead make them feel like a hero instead of someone who’s selling out their Aunt Zelda? Our clients use a kinder and far more effective approach that involves $50 coupons and surprise gift cards. (Call us and we’ll explain how it works.)
Goal #4: Owning the home, not the owner
With the average length of home ownership is about eight years, it becomes obvious that counting on repeat business at any customer’s location is unlikely. That’s the other advantage of the direct mail program we mentioned earlier. Long after a home changes hands, the current owner will continue to receive mail intended for the previous owner, so they can see who that owner trusted. Surprisingly often, clients are amazed to receive calls from new owners letting them know they need to update their records.
Goal #5: Remember your ABCs … Always Be Cross-selling
The better you understand the homeowner and their challenges, the more you’ll be able to do business with them. That isn’t greedy — it’s addressing their needs. Let the parents of the child with asthma know that not only do you have an air cleaner on your van, but if you install it while you’re there, you can waive the regular service fee, and you’ll make a sale while convincing them you put their family’s well-being ahead of business. You never know what a homeowner might be interested in buying from you. Asking them basic and friendly questions about their home provides powerful intelligence you can use to strengthen your relationship with them.