Value of Retaining Clients —Sherburne
WHERE SHOULD your company place its emphasis: on customer acquisition or customer retention? Historically, marketers have been more focused on customer acquisition, but increasingly are turning their attention to retention of existing clients.
According to interactive marketing services company Acxiom, this is fueled by changes in customer behavior and the perceived increasing cost to acquire new clientele. Experts have indicated that it can cost as much as five to eight times more to acquire a new customer than to retain and grow an existing one. Whether or not this is true, the pendulum has certainly swung toward retention for many marketers.
Acxiom suggests a marketing lifecycle that starts with acquisition strategies, moving to nursery (or nurturing) strategies to build the strength of the relationship, and then lengthening and deepening customer value with growth and retention strategies. Finally, it is important to identify and address clients who are likely to defect with attrition strategies. This is the type of approach printing companies should consider, as well.
And, it is perhaps a much simpler process to implement in our industry than in many others because of the level of personal interaction that most printing firms have with their customers, whether through the sales force, CSRs or, hopefully, by the management team.
Today, there is a plethora of other means of staying in touch and staying top of mind. Presumably you are already including promotional and other messages with job shipments and invoices. Perhaps you are also following up periodically to ensure that your clients are satisfied with the work you are doing, through phone calls, paper-based customer satisfaction surveys or e-mail/Web surveys.
The Customer Is King
Tracking this data across customers and over time can also provide good insight into trends and issues that might cause customer defection, allowing them to be addressed before the situation becomes too dire. And look for innovative ways to use social media, newsletters and other communications to keep customers informed and make them feel wanted and important—that you are truly a partner and not just after the next order.
In terms of those customer behavior changes, marketers appear to be taking a conservative approach in their priorities and plans for 2010, with print high on the list of places to decrease spending. According to B2B Magazine's 2010 Outlook, published in November, 58 percent of marketers have cut their marketing budgets in response to the economic crisis, with spending on events and print being the biggest losers.
A full 63 percent of respondents indicated spending was decreased in those areas, and 40 percent reported decreased spend on direct mail. Online, outdoor, radio and TV have not seen those types of cuts, with less than 20 percent of respondents reporting cuts in those areas.
Meanwhile, 73 percent of respondents plan to increase spending in online media. This is more than likely a shift of decreasing dollars rather than an increase in budget.
And 54 percent of respondents report currently using social media as part of their marketing strategies. The majority of those using social media (60 percent) report using it to establish thought leadership.
So, where does this leave us? First, as an industry, we need to do a much better job of communicating the value of print in the new media mix to hang on to a reasonable share of the marketing budgets.
But, it is also critical for us to be a player in alternative media, offering a range of communications options, including print. Many printers-turned-marketing-services providers have told to me that not only is alternative media (and the services that go with it) more profitable, but it tends to draw an increase in print volume with it.
So, clearly, this is one area we should be focusing on in terms of customer retention, and a great new topic of conversation for those sales and/or executive visits to important customers.
Second, we should be paying close attention to our customer retention rate, even to the point of diverting sales power from acquisition to retention, possibly even compensating sales reps more for growth within existing accounts than for bringing in a new account that may only give you one job.
In addition, customer purchasing patterns should be analyzed closely. Key metrics include repeat business, willingness to act as a reference to others within or outside of their organization, the extent to which they are purchasing ancillary services, including Web/e-mail related services, and the frequency of purchases.
Shifts the wrong way in any of these metrics can indicate an emerging problem and should be addressed immediately to determine the reason and what can be done to reverse the trend.
Finally, you should ensure that you offer the best possible customer experience, from the time the buyer first conceives of a project or contacts you for a quote, through the quoting and ordering process, production, delivery, invoicing and followup to ensure the project met or exceeded expectations.
Full Web Integration
Do customers have access to information via the Web relative to the status of their order? Can they access billing and other information online? Are you meeting their requirements in the best way possible with your ordering and invoicing processes? Many companies are now seeking integration between Web storefronts and their own back-end systems to remove manual labor at their end, as well.
None of this is rocket science, but all of it is essential for a focus on customer retention. It also assumes that you are building the proper infrastructure in order to meet these changing client needs, and can be innovative in finding ways for your customers to continue to use print in new and different ways.
This year is likely to be a make or break one for many companies in our industry. Hopefully, these suggestions will be helpful as you work towards making 2010 a great business year. PI
—Cary Sherburne
About the Author
Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries. She was recognized as a 2009 Woman of Distinction and was awarded the 2009 Thomas McMillan Award for excellence in journalism. Sherburne has written six books, including "Digital Paths to Profit," published by NAPL; and, most recently, "No-Nonsense Innovation: Practical Strategies for Success," written with Bill Lowe, the Father of the IBM PC and available on Amazon. She can be reached at Cary@SherburneAssociates.com.
