Transforming your one-time buyers into lifetime customers
Two weeks ago, we spoke about creating a visual image of your customer service profile by giving a percentage to each of the three levels: Level 1 – initial transactions, Level 2 – repeat customers and Level 3 – customer advocates.
Last week, we advised you how to check whether your profile is a Pyramid, an Hourglass or a Hexagon. We wanted you to compare the profile you have with one that you see as ideal for your customers in your market.
This week, we discuss how to manage these three levels.
Managing initial or stand-alone transactions
Level 1 is where customer relationships are born. Think of these transactions as auditions. Customers use this contact to form impressions, to make evaluations and to decide whether or not to do business with you again or speak well of you to others.
There are three keys to managing initial or stand-alone transactions for success.
Key #1: Make systems simple. The more obvious and intuitive your processes and procedures are for both customers and employees, the easier it will be to create a superior service experience. This is as true for traditional bricks-and-mortar retail stores as it is for innovative Internet applications.
Key #2: Feng Shui the experience. The transaction should progress in a way that feels natural for both customers and employees. Each step should flow easily from the step before. Answering these three questions is a good way to start: How can you make it easier for customers to get to you? Think about where customers might search for you, (such as through online or printed directories, your location, the signage that tells them they’ve arrived at your location) and the physical process of entering.
For example, a slow-loading website and a heavy door atop a long flight of stairs could discourage customers from pursuing initial transactions.
How can you make the service environment friendlier and more inviting? Look with fresh eyes at your service environment. It could be the retail sales floor, your online support site or the way the service representative looks and acts when onsite with a client. Consider use of space, colour and light. Sit in the furniture. Stand in line. Log on. Experience it the way your customers do.
Key #3: Capture the opportunity. Every Level 1 transaction is a customer who may move to Level 2 or 3. You need to capture information that will allow you to invite this customer back for another visit. Without a focus on capturing the opportunity, employees may begin to see customers as replaceable: when one goes away, another comes to fill the space. It’s always dangerous to take customers for granted.
Manage Level 2, repeat business with customers who make multiple purchases
Level 2 of the profile represents repeat business. This is where most organisations make their greatest profit. If you manage an internal service group or a non-profit organisation, this is where you will, traditionally, prove the most value to your stakeholders. It’s helpful to look at managing repeat business from two perspectives.
The first is individual customers who make multiple purchases with you over time. This could describe a financial services client purchasing stocks, bonds and other investment vehicles. The second is a loyal retail customer.
Key #1: Track the relationship. Ideally, your customer relationship management (CRM) database tool should allow you to capture the history of each customer so that you can evaluate and predict purchase and use patterns. Where that’s not possible or available, you can still create typical customer use profiles based on customer type and segment.
Key #2: Allow for variation. Customers want to be catered to. They seldom believe that one size fits all. So, create ways for customers to have the experience of customizing. You can create controlled differentiation for your customers. Think how and where you can give your customers scope to shape their own service experience?
Key #3: Look for opportunities to expand the relationship. Amazon now sells just about everything, including, of course, books. At a nature park and lodge, they’ll recommend a hiking trail and FOC pack you a lunch, there bottles of water and new mat with a printed booklet of your trail. What else might your repeat customers want or need?
Manage Level 2, repeat business with multiple buying relationships
The second perspective for looking at repeat business is that of individuals and organisations with multiple buying relationships. For example, a bank customer may have checking, savings and investment accounts as well as a line of credit.
Key #1: Connect the relationships. A customer with multiple relationships not only represents a greater economic value to you but also brings additional expectations and assumptions.
When your CRM tools capture and connect the relationships, you help your service providers meet the customer’s needs and expectations. For example, a company may expect and negotiate a volume discount on office supplies based on total purchases across departments, even though some individual departments buy only a few items.
Key #2: Don’t hold one relationship hostage to another. What passed for CRM in not too distant days was often a revised version of the accounting database, since this was often the largest and most accurate source of customer information. However, it was designed to collect money or assess the risk of not collecting money. And it was very conservative in its assessments.
We’ve heard more than one horror story where an overdue bill for some small amount from one small department caused the system to change all deliveries to COD – or worse, putting the entire customer relationship at risk.
Key #3: Calculate the total value of the customer. It’s helpful for employees to know the economic value of customers with multiple relationships. You can use real numbers from real customers or you can create value models for typical customers within a segment.
Manage Level 3, customer advocates
Level 3 customer transactions are the most elusive. Yes, you can identify customers who are willing to recommend you or who have done so. But you can’t make customers advocate on your behalf. However, you can nurture and encourage them—with powerful results.
Key #1: Know what’s worth talking about. Customer advocates believe your services and products are worth talking about. So, you need to listen to them to find out what they’re saying. Discover what features, what benefits, what aspects of the experience they recount when they recommend you. They may not be the same things you thought most important or most impressive.
Key #2: Changes worth talking about. You don’t keep customer advocates by doing the same old thing. What was impressive yesterday may not be today. I still recall the first time I visited my TV/phone supplier and didn’t need to present my details: they just wanted my ID number – they were all in the computer. Now I just expect that from others.
Key #3: Prompt advocates to share their recommendations. Many advocates are willing to recommend you but don’t find themselves in conversation with the right people. You can get powerful results just by asking for their recommendations. Here are a few ideas: (a) Ask satisfied customers for referrals. It remains an excellent way to build your client base. Collect and distribute customer testimonials. In your literature, on your website, posted on your walls – wherever others may see it. (b) Give customers anything – from serviettes to coffee cups to crystal vases – with your name and contact information. This way your name is easily within reach when the opportunity arises for a customer to recommend you.
Think of other ways. There are many others.
(Lionel Wijesiri is a retired company director with over 30 years’ experience in senior business management. Presently he is a freelance journalist and could be contacted on firstname.lastname@example.org)