According to the White House Office of Consumer Affairs, on average, a loyal customer is worth up to 10 times as much as their first transaction. In other words, they keep coming back and will spend more.
Furthermore, the probability of selling to a new customer is 5 to 20 percent, whereas the probability of selling to an existing customer is 60 to 70 percent. This is based on a study by Marketing Metrics.
This tells us it is critical to define a strategy in which you are building loyalty among your customers. Among the many compelling reasons, the financial gain of that relationship cannot be ignored.
However, that is easier said than done. There are more choices than ever for your customers. The Internet has introduced a new level of research and awareness. Customers come to your rental location prepared and knowledgeable.
Here are three things to consider when you are developing your customer loyalty plan:
- Focus on customer service. Customers will continue to do business with your rental location when they are treated right. There are many aspects of creating an exceptional customer experience, especially when you consider all of the possible touch points you have with your customers.
When you consider touch points such as the phone, in-person, email, your invoice and account set up, there are many opportunities to wow your customers with great customer service. Don’t overlook any of them.
According to an American Express survey conducted in 2011, 59 percent of Americans would try a new brand or company for a better customer service experience.
- Measure your loyalty. Many companies will measure their customer loyalty. The most popular measurement is the Net Promoter Score (NPS). They measure loyalty with the question: “How likely are you to refer us to a friend or colleague?” You see this question on almost any customer survey you take.
This is a reliable metric that allows you to get the voice of the customer and address concerns directly. Immediately reacting to customer concerns is critical in retaining your customers and building loyalty.
- Develop your staff members on customer service skills. The rental business is still a technical and operational business. You hire people that understand the equipment and industry. Your management team is typically focused on operations — it is what they know best.
Your customer facing staff members — including sales, counter, field service, delivery, receptionists and more — need to understand their primary job is to create an exceptional customer experience. A Harris Interactive poll indicated almost nine out of 10 U.S. consumers say they would pay more to ensure a superior customer experience.
What you rent is important to the success of your customers. Don’t underestimate the value of the customer experience.
Spend time as a team discussing what you can do to build a more loyal customer base. Your competitors are developing and implementing plans to retain their customers and make them more loyal. Your focus on loyalty will result in more referrals, greater customer relationships, more passionate staff members and ultimately more revenues.
Barry Himmel is senior vice president for Signature Worldwide, a Dublin, Ohio-based consulting company offering sales and customer service training, marketing and mystery shopping services for the equipment rental industry. He can be reached at 614-766-5101 or firstname.lastname@example.org. For more information, call 800-398-0518 or visit signatureworldwide.com.