----- Original Message -----
Cc: "JERRY HODGE" <JERRYMAC@UTAHWEB.COM>
Sent: Tuesday, July 22, 2008 10:29 AM
Subject: HOW LOYAL ARE YOUR CUSTOMERS
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> Home » Blog Central » Innovator » How loyal are your customers?
> How loyal are your customers?
> Any strategy that doubles your business is remarkable. But a strategy that
> sees your business multiply by 10 times? That's phenomenal.
> David Hall, the owner of Sydney's The Clean Plumber, came up with a simple
> strategy that did just that. Within six months his business, which was 18
> years old, grew from a business of four employees to forty.
> His strategy? He changed the business's name, he started giving customers
> what they want, and he created a customer loyalty program that keeps the
> customers he already has coming back. The whole rethink took him three days
> to brainstorm and six months to implement.
> What's in a name?
> Back in 2002, Hall's business had an image problem. Customers were calling
> to complain that his plumbers were dirty and late. "We were typical Sydney
> tradesmen. We didn't care when we turned up, we were flannelette-wearing,
> dirty tradies. I demanded more from the people I did business with," Hall
> Hall sat down with his team and asked a big question: what was it that his
> customers actually wanted? Punctuality, respect and cleanliness were
> lacking. It was this customer insight that inspired a dramatic shift in the
> company: "The Clean Plumber" was born. Months later the local paper
> announced the new business name, with David's business offering $30 cash if
> his plumbers were late. He also promised customers homes would be left
> fragrant and spotless.
> It's all about the reward
> With 10 times more business after the name change, Hall's confidence in
> marketing had paid off. Six years later, he has a list of customer rewards
> and direct marketing campaigns longer than most big businesses. Here are a
> - he sends letters to customers with The Clean Plumber currency attached.
> The 'dollars' can be exchanged for services (for 'wow' factor he uses actual
> coins he had minted);
> - each plumber leaves a bag of mints behind when they finish a job (so that
> the house is left in "mint condition");
> - customers who refer their friends are often awarded $50 in cash and a
> bunch of flowers personally delivered; and,
> - 'Priority Customers' (previous clients) are offered free home plumbing
> inspections to ensure minor plumbing problems don't become major
> This innovation is my favourite: because he promises to be on time or do the
> job for free, he has bought a motorbike to make sure his employees are never
> stuck in traffic jam.
> "I don't understand businesses who do a $2000-$3000 job and walk out the
> door thinking they're never going to see that customer again. Why not look
> at each customer as an opportunity to get repeat jobs?"
> "Consider customers not as dollars, but as long term friends," Hall says.
> This sounds twee but Hall is spot on. It makes sense to fight to keep the
> customers you've already got. So how can you do this? By establishing your
> own loyalty and referral scheme that works.
> Define your objectives
> For Hall, the first step was to decide what he wanted to achieve. He wanted
> to retain customers and encourage customer referrals. You might decide to
> focus on retaining the most profitable customers.
> What motivates your customer?
> Customer motivations vary enormously. Try to drill down to what motivates
> the customers you are trying to influence. Hall, for example, has figured
> out that a great freebie is cleaning the gutters for free (he's got
> apprentices at each job, why not put them to work?!). It may be that you
> also have something in your business that is easy to offer, but of high
> value to your customers - an express service for repeat customers? A $3
> latte for the client you're about to charge $90 for a haircut?
> Use customer insights
> Any loyalty scheme represents an opportunity to create a huge database of
> customer information. Woolworths Rewards makes their customers register
> online - this data will presumably be used to collate buying patterns and
> allow for more targeted marketing. Collect as much information about your
> customers so you can tailor your rewards and your products and services.
> Knowing why your customers came to you in the first place - or why they're
> considering leaving you - might change your business model for the better.