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Reaching out to the commercial market

Jan 06, 2005

Building loyalty and customer retention for under a dollarJeffrey Dobkincustomer retention management, customer service, brand loyalty, letter writing The buzzword for this week is "branding." Last week, it was "brand loyalty." Oh yeah, and the buzz-acronym for this week is "CRM"customer retention management. What crap. Did you new guys on the marketing block think we old guys didn't know what we were doing 10 and 20 years ago. Did you think we didn't know how to keep customers? So, you came up with a new name for it and I'm supposed to be impressed? Hell, there's even a Branding magazine and a preachy new CRM Magazine. You want to see a good example of CRM? Take a look at L.L. Bean. They've been around forever and they keep their customers for life. They've been marketing extremely well without all the new buzzwords. And I assure you they've been around a lot longer than any new-fangled CRM scheme. Shamefully, most big companies today actually do need to study CRM because they don't know squat about keeping their customers happy. Just take a look at Sprint, AT&T or any of the big phone companies. You get their worst prices if you're a loyal, long-term customer. Exactly what were they thinking when they concocted that plan? Call them with a quick question and you'll receive 20 minutes of voice mail. Then, they blow you off to their Web site so you can spend four hours looking for something it would have taken them 30 seconds to answer on the phone. I wonder if there's a secret publication called Anti-CRM Magazine that only the phone companies and credit card companies receive. And banks. And, ... well, you get the picture. The phone companies have got to read up on it. They lose so many people on the back-end that they have to continually market on the front-end to stay ahead. I guess they haven't figured out that it costs about one-fifth as much to keep a current customer as it costs to acquire a new one. Heck, they could blow their marketing costs out of the water if they would simply write a few thank you letters. But, I'm getting a little ahead of myself. If you ask me (and some firms do) the way to keep customers is with good old-fashioned honesty and some good old-fashioned service (I know, that's quite a stretch for some of the phone companies). You answer the phone when it rings with a real, live person. You don't tell customers the nonsense about, "To give you better service the phone call is being recorded." Yeah, right. And, here are three more quick lessons: *You build a brand by providing good value, first-quality products and service *You build customer retention by asking customers if there's anything else you can do for them ... and then doing it *You create loyalty by thanking them sincerely when they buy something from you When you do all this on a regular basis, do you know what you get? Prestocustomer retention! You develop a customer who keeps buying your goods and services. Poofbrand loyalty! And, a customer who tells his friends about you: Bingocompany loyalty! And now, I'm going to tell you how to get all these things for under one dollar. First, you send me a dollar and ... just kidding. You do it with a letter. A letter is the single most effective sheet of paper in direct marketing. It has been since I started my direct marketing career and it will remain so long after I finish this column. What makes a letter such a powerful tool? And how do you create one that has this kind of effect? It's easy. In direct marketing, a letter isn't really a letter. A letter is something you write to Aunt Bertha at Thanksgiving so you get a nice gift at Christmas. In direct marketing a letter is really a one-page highly stylized ad designed to look like a letter. When you write a letter the very first thing you write is the objective. What do you want to accomplish with this letter? If the letter goes according to plan, what will the immediate result be? That's the objective. Draft your whole letter around that. Here's a quick test: take a look at most of your correspondence. What's the objective? Most people are probably saying you create letters to sell. Sell, sell, sell! Sell products, services, appointments and sales calls. But unless you are a direct marketer and your customers read your letters and directly send you money with an order, your real objective isn't to sell your product. People don't read your letter and send you money. The real objective is to generate a phone call. Your letter simply makes the phone ring. When the phone rings, the letter worked perfectly. It fulfilled the objective. Then it's your job to sell something. But wait, there's more ... Let's talk about writing a letter to a very different objective. How about creating a letter to keep a customer; a letter to build loyalty, trust and friendship? Yes, all rolled up into a single sheet of paper. It's pretty easy to do and heres howjust write a thank you letter. "Thanks for your past business. I appreciate it." There, that wasn't so hard, was it? Instead of trying to sell something, take a minute to spend the 34 cents on building a customer relationship. Use a letter so powerful, it will sit on a client's desk for a monthsend a simple thank you! It'll be the best 34 cents you'll ever spendI guarantee it. When was the last time you received a thank you letter? That long ago, huh? No, I'm not talking about the preprinted junk card your accountant bought from a catalog and sends you each year at Christmas. Im talking about a real letterone youve actually received from a real person, that said your name right there, up at the top and continued, "Thanks so much for your business this past year. I appreciate it." Call me old fashioned, but I still believe it's a privilege to serve your customers. I'll bet they could go just about anywhere to buy services and products exactly like the ones you sell, but they don't. They get those products and services from you. When was the last time you thanked them for that privilege? Do you know what other vendors call your best customers? They call them valuable prospects. With a single thank you letter, you can turn your best prospects into customers; and you can encourage your best customers to do even more business with you, and feel better about doing it. Yes, they'll feel great about spending even more money with youall from a single letter that was written with the objective of making them feel great about doing business with you. "Thanks for the business you give to us, we appreciate it. We're always ready with help, to answer your questions and to assist you in any way we can at any time. Thank you." With two, well-written letters, you can earn yourself a customer for years. You can plug that hole in the bottom of the customer bucketyou know, the one they keep falling out of. And with three thank you letters you can make a customer fall in love with you, your company and they'll never even consider going anywhere else. Jeffrey Dobkin is a marketing consultant and author of "How To Market A Product For Under $500!" and "Uncommon Marketing Techniques." He may be reached at (610) 642-1000 or visit
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