How to Recognize Your Customers
| Category: Customer Service | Date: 2001-07-16 |
The most profitable business is one that has loyal customers who purchase regularly and continue to buy for a long time. Such a business is usually more profitable than one that has many more customers who buy once and disappear forever. But how do you get customers to become loyal? There are several rules that work in any type of commerce, both business to business and business to consumer:
· Recognize them and treat them as individuals. Build a relationship with them.
· Listen to them and modify your behavior based on their preferences
· Give them what they want, rather than what you want to sell
· Provide helpful services and information that make them feel as if they owned the place.
All this is easier said than done. In traditional direct mail or retail stores, following such rules is almost impossible except in the smallest enterprises. Telesales can come closer to the ideal, because you can converse with customers one on one. But telesales is difficult to arrange. If you call them, they may find the calls inconvenient, or annoying. If they call you, you may not be ready to receive them when they call.
A solution to the telesales problem is Caller ID. Once you have built a customer database that contains purchase history, and a record of all your customer’s preferences and complaints, you can call that database up on the telesales screen automatically before your agent answers the telephone. The Caller ID gives you the incoming number. Your computer goes to the database and brings the right records up on the agent’s screen. This can be done both with consumers and in a business setting. If several customers call with an identical telephone number, because they are calling from a business, your software shows eight or ten names on the screen. As soon as the caller says, This is Arthur Hughes you click that name and his record appears on the screen. Now your agent can talk to Arthur as if she knew him. Did the toner arrive on time? That question, alone, is worth two more years of patronage. Loyalty is assured.
With the Internet, we enter on an entirely new dimension of one on one marketing, a dimension that few companies have yet taken advantage of. We can have a communication stream as personal as the Caller ID, but at a fraction of the cost. We can use cookies.
For those who don’t know, a cookie is a small file that web sites store on the Windows directory of your PC when you visit them. When you come back to the same web site a second time, the web site software searches your PC for their cookie, and if they find it they know who is visiting their site. If they are clever, they can get your complete database record and have it available to give you a personal experience on their site. They can ask you if the toner arrived on time. They can modify the web site so that it shows you what you have said you are interested in.
Most marketers today know about cookies, but few still are using them. In the marketing conferences where I lecture I often ask for a show of hands in using cookies. I get two or three hands out of a hundred. Who is using cookies well? Staples and Office Depot, for example. They welcome me whenever I come to their sites.
Another is the Wall Street Journal. For a while, the Journal made me enter a complicated ID and Password whenever I wanted to view their site. It was such a nuisance that the Journal site was really useless to me. Then they got wise and used a cookie. Today they recognize me whenever I come to their site without any entry on my part at all.
Of course, the real recognition comes in the creation of an extranet for your best customers. Dell Computer creates a Premier Page for every company that has 400 employees or more. The employees of the customer company are given special access to this site, using a special PIN. When they come on the Dell site, they see the same products that you see, but with special prices negotiated between Dell and the purchasing office of their company. Every month, Dell sends reports to the purchasing office telling them what computer products the company’s employees have bought.
How important is recognition? How can you prove that it is worth the effort? You can get the answer by setting up test and control groups: one group gets the recognition, and the control group does not. You compare the retention rate and the spending rate of those you devote attention to versus those that you treat normally.
One company I know of did just that. It was a business to business cataloger. They had a very successful business just sending catalogs to contractors and waiting for the phone to ring. A consultant suggested that they try something different with their 1,200 best customers. They divided them into two exactly equal groups of 600. For six months, they assigned a two-person team (a product engineer and a customer service rep) to call the decision makers in the 600 companies in the test group and talk about their interest in the company’s products. They did not offer discounts. They simply made friends with the customers something that they had never done before.
The results were very interesting. In the first place, 76% of the test group placed orders in the six month period, whereas only 73% of the control group ordered in that period. Not much difference there. What they ordered, however, was quite different.
The test group placed 12% more orders in the six month period than they had in the previous six months, whereas the control group placed 18% less orders than they did before.
The average order size was quite different. The test group placed orders 14% larger than they had been placing, whereas the control group’s orders were 14% smaller. In total, they received $2.6 million more sales from the test group than they did from the control group during the six month period. What did the recognition cost them? About $50,000 representing the salary and telephone call costs of the two person team during the six month period. That is a very impressive return on investment. It shows that recognition pays, and pays handsomely. Conclusion: this stuff works!
So what can you do to take advantage of the power of customer recognition? There are some simple rules:
· Link Caller ID to your customer database so that your customer service reps will know, before they take any customer call, who the customer is, how long they have been a customer, what they have bought, and what they have complained about, or asked about in the past. Train them to use that information to provide recognition when they answer the phone.
· Use cookies on your web site to greet repeat visitors by name. Vary the content of the web site that your customers see to reflect what you know about their interests.
· Create an extranet for your best customers. Give them a PIN and ask them to use it when they come to your web site. When they do come, make sure that the page is designed just for them. Give them special advantages, such as volume pricing, when they do. Provide recognition.
· Set up test and control groups to prove to yourself, and to your management, that the money you are spending on recognition is paying off.
There has never been a more exciting time to be involved in marketing that today. It is great to be alive when so much is happening.
About the Author.
:To contact see details below.
DBMarkets@aol.com
http://www.msdbm.com
· Recognize them and treat them as individuals. Build a relationship with them.
· Listen to them and modify your behavior based on their preferences
· Give them what they want, rather than what you want to sell
· Provide helpful services and information that make them feel as if they owned the place.
All this is easier said than done. In traditional direct mail or retail stores, following such rules is almost impossible except in the smallest enterprises. Telesales can come closer to the ideal, because you can converse with customers one on one. But telesales is difficult to arrange. If you call them, they may find the calls inconvenient, or annoying. If they call you, you may not be ready to receive them when they call.
A solution to the telesales problem is Caller ID. Once you have built a customer database that contains purchase history, and a record of all your customer’s preferences and complaints, you can call that database up on the telesales screen automatically before your agent answers the telephone. The Caller ID gives you the incoming number. Your computer goes to the database and brings the right records up on the agent’s screen. This can be done both with consumers and in a business setting. If several customers call with an identical telephone number, because they are calling from a business, your software shows eight or ten names on the screen. As soon as the caller says, This is Arthur Hughes you click that name and his record appears on the screen. Now your agent can talk to Arthur as if she knew him. Did the toner arrive on time? That question, alone, is worth two more years of patronage. Loyalty is assured.
With the Internet, we enter on an entirely new dimension of one on one marketing, a dimension that few companies have yet taken advantage of. We can have a communication stream as personal as the Caller ID, but at a fraction of the cost. We can use cookies.
For those who don’t know, a cookie is a small file that web sites store on the Windows directory of your PC when you visit them. When you come back to the same web site a second time, the web site software searches your PC for their cookie, and if they find it they know who is visiting their site. If they are clever, they can get your complete database record and have it available to give you a personal experience on their site. They can ask you if the toner arrived on time. They can modify the web site so that it shows you what you have said you are interested in.
Most marketers today know about cookies, but few still are using them. In the marketing conferences where I lecture I often ask for a show of hands in using cookies. I get two or three hands out of a hundred. Who is using cookies well? Staples and Office Depot, for example. They welcome me whenever I come to their sites.
Another is the Wall Street Journal. For a while, the Journal made me enter a complicated ID and Password whenever I wanted to view their site. It was such a nuisance that the Journal site was really useless to me. Then they got wise and used a cookie. Today they recognize me whenever I come to their site without any entry on my part at all.
Of course, the real recognition comes in the creation of an extranet for your best customers. Dell Computer creates a Premier Page for every company that has 400 employees or more. The employees of the customer company are given special access to this site, using a special PIN. When they come on the Dell site, they see the same products that you see, but with special prices negotiated between Dell and the purchasing office of their company. Every month, Dell sends reports to the purchasing office telling them what computer products the company’s employees have bought.
How important is recognition? How can you prove that it is worth the effort? You can get the answer by setting up test and control groups: one group gets the recognition, and the control group does not. You compare the retention rate and the spending rate of those you devote attention to versus those that you treat normally.
One company I know of did just that. It was a business to business cataloger. They had a very successful business just sending catalogs to contractors and waiting for the phone to ring. A consultant suggested that they try something different with their 1,200 best customers. They divided them into two exactly equal groups of 600. For six months, they assigned a two-person team (a product engineer and a customer service rep) to call the decision makers in the 600 companies in the test group and talk about their interest in the company’s products. They did not offer discounts. They simply made friends with the customers something that they had never done before.
The results were very interesting. In the first place, 76% of the test group placed orders in the six month period, whereas only 73% of the control group ordered in that period. Not much difference there. What they ordered, however, was quite different.
The test group placed 12% more orders in the six month period than they had in the previous six months, whereas the control group placed 18% less orders than they did before.
The average order size was quite different. The test group placed orders 14% larger than they had been placing, whereas the control group’s orders were 14% smaller. In total, they received $2.6 million more sales from the test group than they did from the control group during the six month period. What did the recognition cost them? About $50,000 representing the salary and telephone call costs of the two person team during the six month period. That is a very impressive return on investment. It shows that recognition pays, and pays handsomely. Conclusion: this stuff works!
So what can you do to take advantage of the power of customer recognition? There are some simple rules:
· Link Caller ID to your customer database so that your customer service reps will know, before they take any customer call, who the customer is, how long they have been a customer, what they have bought, and what they have complained about, or asked about in the past. Train them to use that information to provide recognition when they answer the phone.
· Use cookies on your web site to greet repeat visitors by name. Vary the content of the web site that your customers see to reflect what you know about their interests.
· Create an extranet for your best customers. Give them a PIN and ask them to use it when they come to your web site. When they do come, make sure that the page is designed just for them. Give them special advantages, such as volume pricing, when they do. Provide recognition.
· Set up test and control groups to prove to yourself, and to your management, that the money you are spending on recognition is paying off.
There has never been a more exciting time to be involved in marketing that today. It is great to be alive when so much is happening.
About the Author.
:To contact see details below.
DBMarkets@aol.com
http://www.msdbm.com
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