Two-thirds of customers that switched vendors said they felt neglected by the company they used to patronize.

Nearly every business of every type and size makes the same crippling, often fatale marketing mistake. Most business owners focus nearly every dollar in their advertising budget on new customer acquisition, while failing to spend adequate resources on their most predictable, and profitable business asset….their database of existing and past customers.

It often costs six times as much to acquire a new customer as it does to retain an old one. Which is why the research shows that retaining just 5% more customers can boost profits by 25% to 120%.

If they are handled properly, 65% of your business will come from existing satisfied customers. And loyal customers buy, spend, try, and refer more.

On average, cutting your company’s defections in half can double your company’s growth rate.

Sales productivity goes up as new customer acquisition costs go down.

Based on the economies of retention vs. acquisition, long-term success then depends on building repeat sales and loyalty among customers.

Customer loyalty provides:

1. New customer referrals
2. Increased purchases and revenue
3. Tolerance of price premiums

Reduced operating costs, as they need less education about your products, operations, etc.

Loyal, long term relationships result from a series of frequent personal contacts during each stage of the customer life cycle. These contacts can be made in a variety of ways:

1. Send acknowledgment of seasonal holidays and personal milestones that matter to your customers such as birthdays, etc.
2. Send invitations to special events planned for loyal
   Customers.
3. Recognize your best customers as being extra-special and treat them to special offers, helpful information, and premium service.
4. Send or make available opinion surveys.
5. Send apologies to customers who complain or have a bad experience.
6. Send notices of new products, services, or hours. Look for ways to provide new information that’s relevant to a customer. A card can introduce a new product or services while not appearing promotional.
7. Send announcements of introduction when you hire new employees.
8. Send a request for referrals, then and follow-up
   with a thank-you note.
9. Recognize business milestones such as company
   anniversaries.

The best way to prevent customer defection is to ensure their satisfaction and loyalty through frequent, value added communications.

Reminder cards can put your company name back into the consciousness of a customer who simply forgot you as a supplier.

Exit surveys provide disenchanted customers with an opportunity to express their complaints. And the very act of investigating why a customer is leaving may encourage the customer to stay.

Personalized cards that say, “We do care. Tell us what you want. What can we do for you?” or “Oops, we’re sorry for the inconvenience” can turn a situation around.

An appropriate and useful gift is always appreciated and can assist you in staying in front of your customer without annoying them. Each time your customer sees your gift they will be reminded of your commitment to and interest in, being their provider of choice.
Always let your customers know you appreciate them after a purchase. A simple thank-you letter or card with a small gift goes a long way.

Don’t fall into the trap of worrying about the daily operations of the store while forgetting about your customers.

Your existing customers are your best prospects for re-selling, cross selling or up-selling.

If you make a customer happy chances are they will tell three people, if you have unhappy customers chances are they will tell eleven people.

Create opportunities for gathering feedback from customers. Include postage paid surveys in your mailings.

Clients typically stop buying for three reasons:

1. Out of sight, out of mind.
2. They become dissatisfied.
3. Their situation has changed to the point where they no longer can benefit from whatever product or service you sell.

Through proper and regular customer contact and surveying, you can control the first two.

Duane Sprague is president of Dunning Sprague Marketing & Advertising, located in Foothill Ranch California. Duane has written over 60 published articles and 3 books on marketing and advertising, and is a national speaker. He can be reached at 888-264-1963 ext. 1618. Or on the web at www.dunningsprague.com. Email: dsprague@dunningsprague.com