The Silent Profit Killer Hiding in Your Business


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You can hear it in the phone calls. You may see it reflected in a sloppily clad technician. It often hides in the “meant to” things in your business, still undone. None cost you a dime, yet all are costly as heck and recklessly damaging.

It’s Customer Retention. We all like to think it’s there, working for us, because we’re just so darn good at our jobs… no customer could ever forget how timely, fair and magnetically un-leavable we are. Until they actually leave, taking their business and referrals forever.

Contractors are too often swayed by the cheapness of what I call “Anti-Retention.” The damaging effects are horrifically magnified. What is it?

Put simply, Anti-Retention is anything that does not help you keep a customer. A few of the most rampant culprits in the contracting world are:

  • Ignoring them. This is number one. Tattoo this on your forehead.
  • Treating non-customers (first-time callers) and customers the same: on phone calls, through marketing, add-on offers. Segmenting makes sense, and this is where you start.
  • Setting an appointment and being late without a phone call to alert. Do you like it when your appointments are unapologetically tardy?
  • Failing to explain what exactly you’ll be doing on the call and what the homeowner can expect. The “grunting assumption” by many techs as they clomp through a home is not charming. The words “rude” and “irritating” come to the minds of those who too often consider this painfully typical.
  • Not creating a customer “ascension model” toward a maintenance program that keeps them comfortable – and you regularly in their homes.
  • Expecting but not “engineering” referrals for your business.

There are more, but you get the picture. Don’t send me hate mail that these don’t apply to you until after you start calling your CSRs, or “plant” customers to watch the service call, or ask customers how many times they heard from you after the invoice.

Good news: All the fixes are totally in your control. Too often the smug attitude (too costly to consider in this economy) is, “Oh well, these things just happen.” This pervades the HVAC industry until you have a climate of complacency and anti-retention that isn’t just deemed acceptable, it’s expected. Ask your customers. We made 6,000 phone calls last year, and the results were not pretty. Not my job to be telling lollipop stories here.

I can’t think of one thing that will suck the morale, profits and life from a company any faster. Patricia Fripp, a past president of the National Speakers Association put it like this: “When you lose a customer, you lose two ways: You don’t get their money. Your competitors do.”

I’d like to change that slightly to three ways: You lose their referrals too. (How many times do you recommend a business you no longer frequent?)

There’s one awesome solution: Take A.C.T.I.O.N.

The 6-Step A.C.T.I.O.N. Plan That Can Save Your Business from the Evils of Anti-Retention

  1. Acknowledge. This is a standard staple of improvement, whether you’re in AA or Over Eaters of America. Before you can fix anything, you first have to acknowledge that yes, there is a problem in your business, and yes, it’s causing you to lose customers, waste money and miss the profit ship. Make out a list of target areas to improve (looking back on comments or complaints is a great place to start), and then get ready to…
  2. Change. You know the areas you need to work on, now it’s time to get down to business. If the problem is appearing professional, have a team meeting and address the issue of dress. If it’s poor customer service, hire an expert for a training session. If you have no idea where to start and you’re in the Hudson, Ink MegaMarketer Coaching Club, that’s what we’re here for – just call! The point is that waiting won’t get you anywhere. You have to start today, right now, to change the environment of Anti-Retention before you don’t have a business left to worry about. And that means you’re going to need…
  3. Team work. Ever heard that old saying, “The chain is only as strong as its weakest link?” From the receptionist to the CSR, to the technician to the accountant, Customer Retention is the job of your entire team. It starts with a service mentality. Every single person’s job, first and foremost, is to take care of your customers. When the whole team works together for that single purpose, there’s no limit to what you can accomplish. It’s called synergy, and it works.
  4. Implement. You’ve identified your Anti-Retention areas, started changing them and you’ve got the team all together on the same page. Now it’s time to implement proactive Customer Retention programs. First, that doesn’t mean spending a bundle of money. You spend $275 to $325 to get a new customer, but keeping that customer is a fraction of that – about $3-$4 apiece. My personal favorite retention piece is a newsletter program. You can boost your image, have direct response ads and reinforce the relationship with meaningful content in one fell swoop.
  5. Ongoing. Customer Retention isn’t a stop-and-go effort. This is a complete paradigm shift, which is just a $50 expression for a complete change in your mindset. Going back to the “before” is no longer even an option. That’s why you’ll notice that I said Customer Retention “program,” not “event.” Make active Customer Retention a scheduled, automatic, systemized part of your business. A quick, seasonal rundown:
    • Spring – Newsletter
    • Summer – Newsletter, Postcard
    • Fall – Newsletter
    • Winter – Newsletter, Holiday cardWe can help you get these set up to run with little or no effort, but please hear me on this: I don’t care if you use us or not, but for the sake of your business, get this done by someone!
  6. Nurture. Now, I’m not going to go all kumbaya on you here. We’re not talking about group hugs and nap times – though that may be your cup of tea. What we’re talking about is nurturing an environment that fosters retention. Reward your employees for retention-minded efforts, and reward your customers for their loyalty. You’ll come out ahead on both counts, and guess what? Rewarding loyalty tends to breed more loyalty. How can you top that?

So, there you have it. It’s time to wage war on the anti-retention behaviors that have been keeping you from reaching the next level in your business. Remember, Customer Retention isn’t only possible; it should be the norm.

Adams Hudson
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Posted In: Customer Service, Sales & Marketing

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