Thursday, February 9, 2012

Relationship Marketing Has Gone Mainstream

If you aren’t relationship marketing, you’re missing out. Sure you need to generate your leads and bring in new customers, but it’s much more cost-effective to keep the customers you have. Relationship marketing is all about that. Relationship marketing strategy should be designed to inspire customer loyalty, engage the customer, and promote interaction.

The Cross-Functional Approach

You’ve heard of cross-functional teams, particularly when it comes to producing a product. In that situation a team is responsible for the entire production of the item, from beginning to end, rather than being segmented so that one person is responsible for only one step in the process. Relationship marketing is cross-functional. Ideally, it involves all aspects of the organization.

Martin Christopher, Adrian Payne, and David Ballantyne[3] at the Cranfield School of Management claim that relationship marketing has the potential to forge a new synthesis between quality management, customer service management, and marketing. They see marketing and customer service as inseparable.

I had an experience this morning that cemented that for me. I am in the process of conducting a customer satisfaction survey for one of our companies. Upon receipt of the invitation, one of our customers sent back a response in which he complained of some issues he was having so he couldn’t give us anything but negative feedback on that company. Because I am a relationship marketer, my response was to do a little customer service. Ten or 15 years ago, I might have sent that over to customer service to handle, but that’s not what I do anymore. That customer reached out to me, so it’s my responsibility to do what I can to assuage the situation. I absolutely vetted my response, but I handled it. It’s part of my relationship marketing strategy.

Customer Retention

So you’ve got the customers. Now what? Keep them. It costs almost five times more to acquire a new customer than it does to retain an existing one. It doesn’t matter if this customer is Jane Doe who lives by herself with her dog, a multimillion dollar business you distribute your manufactured products to, or even a low-bid contractor. You all have customers that you can work toward retaining and client relationships that need to be managed – even the low-bid contractor. Steven Howard, of Howard Marketing, puts it beautifully into the 7 C's of Successful Customer Retention:
  • Caring Attitude – Let the customer know they are important and that you really want to help them.
  • Customized Practices – Do what you can to meet your customer’s specific needs. Sometimes that involves flexibility, simpler forms and understanding the customer’s relationship with the company.
  • Competent CSOs/CCPs – Put people in place that are accountable and willing to take action. People who are knowledgeable and meet commitments are priceless.
  • Call/Visit Once – Don’t make your customer explain the problem more than once. Their initial contact should be the one point-of-contact for the customer.
  • Convenient Access – Structure your personnel’s hours around your customer’s needs. Contact information should be easy to find and understand, as should your website, and your ordering process, etc.
  • Compressed Cycle Times – Fast turnaround times, responsive customer service and proactive services go a long way toward making your customer happier.
  • Committed Follow Through – The first contact person follows up with the customer to ensure they are satisfied. If contact was due to a problem, they do their best to see the problem or error isn’t repeated.

When Is It Too Much?

Sometimes, as cold and calculating as it sounds, you have to let a customer go. When it comes right down to it, you are running a business. You need to weigh what it’s costing you in time, energy and money to retain that customer, versus their value. It’s one thing if you have a high maintenance customer who is bringing a lot to your bottom line, but, and this is a cold hard truth, sometimes you have a high maintenance customer that doesn’t bring much to the bottom line, so they end up costing you more than they are bringing in. I’m a little guy, so I hate saying that, but I owned my own business for a while so I know from whence I speak.

Another thing you can do is talk to your employees. They’ll know which customers have a bad reputation; which ones are costing them time better spent elsewhere; which ones are abusive and negatively affecting morale. When productivity and morale go down, so does profitability. That’s a fact. have to fire the customer.

For more information on Steven Howard's 7 C's of Customer Retention you can watch this video:


Post a Comment