Once upon a time, I knew a man who treated me very nicely. He held the door open for me, brought me chocolates and wrote me affectionate notes. But, after a month, when this pursuit seemed likely to succeed, his behavior suddenly changed. He stopped asking for dates in advance, and assumed I'd be available on a moment's notice. Confused by this abrupt transformation, I asked why he suddenly was taking our courtship for granted. He quipped, "are you familiar with the tale of the salesman and St. Peter?"
I wasn't, but I am now. It seems that a salesman dies and finds himself at the Pearly Gates. St. Peter tells him that he has led a good, but not saintly, life, and so he is not predestined for Heaven or Hell, but will be allowed to choose one or the other. He introduces him to Michael, who makes the presentation on behalf of Heaven. This includes a tour that shows the joys of sitting on innerspring clouds, playing a harp and singing hosannas.
The salesman then meets Nick, who is the presenter for Hell. The tour shows an endless party hosted by lovely starlets.
After considering both proposals, the salesman chooses Hell. He is led through a door, which slams behind him; and he finds himself amid sulfurous flames, into which the partygoers are forced by demons with pitchforks.
"But…" says the salesman, turning to Nick. "It wasn't like this yesterday."
"Ah," his sales representative replies. "Yesterday, you were a prospect. Today, you're a client."
This story not only illustrates an important point about dating, but also about customer retention. Relationship nurturing and development must continue after the prospect is sold. All of us are customers, and I think everyone will understand my doubt that too many companies do not understand the value of their present customer base. If they did, why would they offer preferential pricing to new clients -- those that are ready to abandon an existing supplier just to realize a short-term saving? We see this all the time with phone, cable and Internet service providers. An extremely attractive price is frequently offered upfront, to anyone willing to switch. But after you've been with the new outfit for 12 months, the price goes up and up. This is on my mind right now, because I recently was "rewarded" for staying with my provider for two years -- by getting a hefty price increase!
There are many things wrong with the way many contemporary businesses are treating their existing clients. For starters, they often boast about treating new clients better than their bread-and-butter customers. How else can you interpret offering better pricing to prospects than to those whose loyalty has generated all their profits?
Another thing wrong with this business approach is that it costs more than twice as much to get a new client than it does to keep an existing one. Present customers also can be the source of referrals, if we give them the treatment they deserve. And past customers often take their revenge by "flaming" the suppliers who have not appreciated them.
What, then, is to be done?
• Acknowledge longtime clients for their patronage. Feature them in your advertising, newsletter, website and other marketing materials.
• Be everywhere that they are. Stay connected to them through social networking sites, on their blogs, commenting and engaging your clients. Lend your hand to help make them successful.
• Host client appreciation events. This can be especially effective when they give prospects, and the companies that sell to you, the opportunity to meet your best clients. Ensure that those clients come away from that event feeling special and understanding how much you value their business.
• When clients make referrals that bring in new business, offer them a thank-you discount. Reinforce behavior that you want to see repeated.
• Put your "referral mindset" on. Look for opportunities to refer firms with which you do business to clients whose products or services can help them.
Remember, too, that small customers who stick with you may become large customers, or may have influence with prospects out of all proportion to their size. Show low-volume, but profitable, clients that you appreciate their business, too.
It is more cost-effective to retain your current customers, because once you lose them, chances are no "new" marketing initiative will get them back. Encouraging loyalty with existing customer incentives is a great way to build a stable client base, as well as driving new business.
It didn't take long for me to feel unappreciated by that "gentleman" suitor, but I learned a valuable lesson. How long will it take your customers to move on if you don't acknowledge them?