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“Share of customer” is a concept we have talked about before in Rental Management, but a couple of articles this month raise the issue again loud and clear. “If your rental business routinely relies on new customers to make up for lost ones, you’re taking the least cost-effective path to revenue,” writes Jack Shea in
Managing by Computer . “It’s more expensive to acquire new customers than it is to retain old ones. This is true of lapsed customers as well.” And business consultant Bill Dueease echoes this in the Competitive Management section (page 90): “Know and appreciate the value of your existing customers.… Your business probably will not survive without repeat business.” Strong words.
Management is a mix of science and art that cannot be reduced to a list of slick phrases, but please give some thought to this idea anyway: if you can define the problem, you can define the solution.
If the problem is losing existing customers, somebody else is probably doing something better than you are — and it probably is not a lower price, or if it is, it is not only a lower price. So there’s the problem defined, more or less. The solution may be a mixture of many things, but you could probably cover them all with the term “customer satisfaction.” That includes how you treat them, of course, but also how well you have planned your inventory and how well you maintain it, how convenient you make it for the customer to do business with you, how you price — how you help a customer solve a problem or realize an opportunity or enjoy life more. And do it as a consistent and permanent practice and not just a temporary fix. That will satisfy customers and keep them loyal, but first you have to get them back.
How? The same way you get new customers: marketing. Dueease defines marketing as “doing what it takes to convince enough customers to pay the necessary price for your products and/or services to produce the desired profits for the business.” His
“eight secrets”
are a short course on the subject.
Here’s an even shorter course: marketing is creating a value chain and making sure people know about it. Your value chain starts with your definition and assessment of your market and what your customers will need, and then proceeds through researching and selecting inventory, hiring and training people to present your products and services well, getting the word out into the marketplace about what you can do — and at every step of the way, adding value to the customer’s experience. Servicing the equipment, making good on your promises, delivering on time, billing accurately — every action you take in the course of doing business must add value that the customer can perceive. “Effective marketing is the primary reason any customer comes to you,” writes Dueease. Creating that value chain will keep them around and you will gain “share of customer.”
People come to you the first time for what you have to offer. They come back the second time because of how they were treated. |
