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21 Keys to Improving Customer Retention through Relationship Marketing Programs
By Marc Hallen, prominent copywriter

Late last year, we offered you the first 11 tips of Mark Hallenís checklist for improving customer retention, and then failed to supply the final 10 tips in a following issue. Thanks to a loyal readerís sharp eyes, weíre finally bringing you the last 10! We apologize for the delay and appreciate your loyal readership.

12. Give instruction on how to get the most use from products and services.
Obviously, this is most important with brand new customers, but also has retention value when an existing customer renews, buys a more expensive model, or accepts a new release of the product.

13. Do not turn all communications into sales pitches.
Don't train the customer to believe that anything with your logo is trying to sell him something. Communications that are thank you's, welcomes, usage tips, anniversary messages, case studies, etc. make the customer feel that he is more than just a target for additional sales, and pave the way for opening the envelope when you are selling.

14. Assume that all new customers are created equal.
When somebody first buys your product, you may not know how good a customer they're likely to be. Only performance can dictate that. Therefore you won't be able to pick and choose which customers to invest in with a relationship program. However, you can reduce or increase the investment in a customer as you see what kind of customer he is.

15. Donít try to start the relationship in the middle.
This is the corollary to #1 (realize that your retention program starts on Day One). While an action-based loyalty program can be augmented at any time, a true relationship program will get the biggest return by beginning at the beginning. There will be less effect with older customers.

16. Understand that unexpected ďperksĒ do more than expected ones.
Think carefully about how you position extras. Letís say, for instance, that youíre marketing software to an installed base. If the upgrade mailing says "and you'll get 30 days free support" it might get some extra sales, but it may also decrease response because the customer thinks support will be necessary. It also raises expectations and may lead to disappointment. However, if you tell users AFTER they upgrade "to thank you for your purchase, we're giving you 30 days FREE support" it can't have a negative affect. It lets them know you're thinking about their welfare, since there is no (obvious) profit in it for you. In addition, because it was a "surprise" and not an incentive, usersí expectations for it are lower: whatever they get is a bonus.

17. Determine the effects of any retention or relationship program only in the long term.
By definition, any relationship program must be viewed as a long-term investment with the potential for a sizable, but deferred, return on that investment. Do not look to see results this quarter or even this fiscal year. Your customer will reward you for good products, service and treatment only after a long enough period of time that establishes this as your company's way of doing business.

18. Make customers feel that the relationship is worth something.
Here's a real relationship killer. I get a mailing with a special "customer price," then see a lower price in a store (or store circular) where anyone can walk in off the street. Treat me as an "insider," eligible for things that a non-customer can't get. Otherwise, what's in it for me?

19. Keep a Control Group long-term.
To accurately measure the affect--and ROI--of a relationship program, you must retain a control group that has absolutely no contact with any component of the relationship program. Just as important, every action of this control group must be compared to the test group for a long period of time.

20. Define your goals and be sure they can be accomplished.
Direct marketing is not a branding or image medium. Even mailing monthly, the frequency just isn't there to create a brand. Direct marketing can reinforce what I already think about the company, but not change it. That's why it's so important to start with new customers; that's when they feel best about us, so it's the best time to build on that.

21. Do not even think about a relationship program without reciting this mantra: "LIFETIME CUSTOMER VALUE IS EVERYTHING."
All marketing should have lifetime customer value in mind, but it's the whole point of relationship marketing. Three, five, 10 years from now, how much more business have you done with Customer A (in whom you invested in a relationship program) vs. Customer B (in whom you made no additional investment). If you don't plan to look at the program this way, there's really no reason to do it in the first place.


If you missed the first 11 tips published in the Nov. 2007 issue, click here.
 

 

---Source: This article came from one of our Favorite Author contributors, Lee Marc Stein. Lee Marc Steinís Direct Marketing Newsletter Issue #55. Visit his Web site at www.leemarcstein.com. To view Lee Marc Stein latest article, click here.


 

Melissa Data


 
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