Transcript Retaining Customers

OFA Short Course (July 2012)
Current Challenges Facing the Industry
1. Weather Conditions
2. The Economy
3. Identifying & Connecting with
Customers
4. Slow Traffic
5. Declining Retail Customer Counts
Why Businesses Lose Customers
1. 68% - Unhappy with the Treatment they
receive
2. 14% - Dissatisfied with the Product or
Service
3. 9% - Begin doing Business with the
Competition
4. 5% - Seek Alternatives or Develop other
Business Relationships
5. 3% - Move Away
6. 1% - Die
Source: US Small Business Administration & US Chamber of Commerce
Customer Relationship Management (CRM)
 Customer
relationship management:
A systematic tracking of consumers’
preferences and behaviors over time in order
to tailor the value proposition as closely as
possible to each individual’s unique wants &
needs
 CRM facilitates one-to-one marketing
 CRM systems use computers, software, databases,
and the Internet to capture information at each
touchpoint.
Touchpoints are any direct interface between
customers and a company (online, by phone, in person,
etc.)
CRM References
“Principles of Marketing” by Phillip Kotler and
Gary Armstrong
“Real People, Real Choices” by Michael K.
Coolsen and M. Patricia Galitz
“The Australian CRM Market” by David Sims
Value and Satisfaction
Perceived Value
The customer’s evaluation of the difference
between benefits and costs.
Customers often do not judge values and
costs accurately or objectively.
Customer
Satisfaction
Product’s perceived performance relative to
customer’s expectations.
Four Steps in One-to-One Marketing
1. Identify customers and get to know them in as
much detail as possible
2. Differentiate customers by their needs and
value to the company
3. Interact with customers; find ways to improve
cost efficiency and the effectiveness of the
interaction
4. Customize some aspect of the products you
offer each customer
7-7
Capturing Value from Customers
Key Concepts
 Customer
Loyalty
and Retention
 Share of Customer
 Customer Equity
Customer delight
leads to emotional
relationships and
loyalty
 Customer Lifetime
Value shows true
worth of a customer

Capturing Value from Customers
Key Concepts
Customer Loyalty
and Retention
 Share of Customer
 Customer Equity

Share of customer’s
purchase in a product
category.
 Achieved through
offering greater
variety, cross-sell and
up-sell strategies.

Capturing Value from Customers
Key Concepts
Customer Loyalty
and Retention
 Share of Customer
 Customer Equity

The combined customer
lifetime values of all
current and potential
customers.
• Measures a firm’s
performance, but in a
manner that looks to the
future.
• Choosing the “best”
customers is key
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Not All Customers are Equal
High
Profitability
Butterflies
Good fit between
company’s offerings
& customer’s needs:
high profit potential
True Friends
Good fit between
company’s offerings
& customer’s needs:
highest profit potential
Low
Profitability
Strangers
Little fit between
company’s offerings
& customer’s needs:
lowest profit potential
Barnacles
Limited fit between
company’s offerings
& customer’s needs:
low profit potential
Short-term Customers
Long-term Customers
Projected Loyalty
Some CRM Offerings
1. Fusion Line of
Integrated Solutions
2. Cam Commerce Retail
Star
3. NetSuite Multi –
Channel Retail Mgt
Suite
4. Epicor Retail Solutions
5. Counterpoint by
Radiant Systems
6. NetSuite
7.
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Act by Sage
Amber POS
Merchant OS
Microsoft Retail
Management System
ALMsi
Vend POS
MultiFlex RMS Fashion
Salesforce.com
Sugar CRM
7 Steps For Building Long-Term
Relationships With Your Best Customers
1. Concentrate on getting the second
sale
 People are only customers if they buy from you
regularly. And many people will buy from you
once and never again.
 To turn someone into a genuine client, the most
important thing is getting the second sale from a
new customer - and getting it as soon as
possible.
 After that, they are more likely to stay with you
and build the relationship.
Source: Robert Greenshields
7 Steps For Building Long-Term
Relationships With Your Best Customers
2. Always act in their best interest
People are more likely to do what you ask if they
believe you have their best interests in mind. This
is the 'Law of Friends'.
To build a business relationship, show clients that
you are looking after their interests.
This trust can normally only be built over time.
Stop worrying about getting clients to like you
and focus on looking after them.
Don't be interesting. Be interested. That helps you
think of them as individuals. ('Built to Last' by Jim Collins)
Source: Robert Greenshields
7 Steps For Building Long-Term
Relationships With Your Best Customers
3. Keep in touch regularly
You can build trust by giving valuable
information - rather than simply promoting
your services.
Newsletter
Social Media
YouTube
Podcasts and teleseminars
Postcards
Source: Robert Greenshields
7 Steps For Building Long-Term
Relationships With Your Best Customers
4. Make your contact personal
To make your contact with customers personal,
you need to learn about them.
Start by just listening to them
Post a survey on your website or conduct a
customer questionnaire.
The more you know about their likes and dislikes, the
more personal you can make your services
Post information that will interest them
Recognize their personal achievements and family
events.
Source: Robert Greenshields
7 Steps For Building Long-Term
Relationships With Your Best Customers
5. Recognize that satisfaction is not
enough
People will not stay with you and build a
long-term relationship because they are
satisfied. They expect that.
You need to deliver exceptional service
You need to exceed their expectations give them more than they anticipated.
Care about them more than they are used to
being cared about.
Source: Robert Greenshields
7 Steps For Building Long-Term
Relationships With Your Best Customers
6. Ask your customers to help you
Once you have built a good relationship, you'll
often get help from your customers.
Ask for Feedback on what needs improved
Provide referrals and
Provide testimonials to promote your business
The added benefit of this is that the laws of
psychology show that when people have helped
you in this way, they will act consistently
afterwards and are therefore even more likely to
buy from you again.
Source: Robert Greenshields
7 Steps For Building Long-Term
Relationships With Your Best Customers
7. Focus on your most profitable
customers
Typically you will find that 80% of your
profits come from 20% of your customers.
So you need to understand which 20% are
most profitable by looking at the Lifetime
Customer Value
The total amount somebody would spend with
you over their time with you as a customer.
Source: Robert Greenshields
Consumer Spending
Value (Quality of life)
Benefits > Price
Relevant
Economic benefits
Eco-systems services benefits
Health & well being benefits
Authentic (Real is good)
Time
Attention
Trust
Source: Charlie Hall, Ellison Chair in International Floriculture, Texas A&M
Benefits of Human-Plant Interactions
Economic Benefits
Environmental Benefits
•Beautification draws
customers & reduces shopping
stress
•Boosts occupancy rates
•Generates tourism revenue
•Job creation from increased
services demanded
•Reduced health care costs
•Increased property values
•Tax revenue generation
•Reduced street repairs &
maintenance costs
•Upgrade effects of
surrounding areas
•Revenue from educational &
special events
•Carbon sequestration
•Improved air quality
•Attracts wildlife & promotes
biodiversity
•Energy cost saving associated
with heating/cooling
•Reduced heat & cold damage
•Offsets heat islands
•Reduced noise pollution
•Reduced soil erosion
•Reduced storm water runoff
•Improved water quality
•Reduced urban glare
•Effective windbreaks
Source: Charlie Hall, Ellison Chair in International Floriculture, Texas A&M
Health/Well-being
Benefits
•Improved concentration &
memory retention
•Enhanced learning capacity
•Plants generate happiness
•Reduced stress & depression
•Health & recreation benefits
•Accelerates healing process
•Therapeutic effects of
gardening
•Improves relationships/
compassion
•Improved human
performance/ energy
•Medicinal properties
•Improved mental health
•Reduced community crime
•Traffic safety/ driver
satisfaction
Top 12 Gardening & Lifestyle Trends
for 2013-14
1. Lifestyle Forces
 Grow your own food (edible ornamentals)
2. Wellness
 #1 reason people select the products they
buy
3. eConoForces
 Suburb houses & lots are smaller
 Younger generation is moving back into cities
 Focus on Greener Urbanization
Today’s Garden Center; Oct 15, 2012
Top 12 Gardening & Lifestyle Trends
for 2013-14
4. Color Forces
 Happy yellow, bright blue, healthy green
5. Natural Forces
 Natural solutions – environmentally safe
 Landscapes: integrate sustainable designs &
elements
6. Ground Forces
 Increased interest in what goes into healthy
soil; gardening from the ground up
 Young gardeners selecting organic products
over chemical solutions
Today’s Garden Center; Oct 15, 2012
Top 12 Gardening & Lifestyle Trends
for 2013-14
7. Air Forces
 Air plants are the new terrariums
 Air plants can purify air of indoor toxins
8. Aqua Forces
 Need to reduce water consumption
 Demand for drought-tolerant plants
9. Light Forces
 Light for “Wow” effects
 Low energy lights
Today’s Garden Center; Oct 15, 2012
Top 12 Gardening & Lifestyle Trends
for 2013-14
10.Inner Forces
 Connect with nature
 Inspiring green interiorscapes (green walls)
11.Micro Forces
 Anything tiny is “Hot”
 Landscape: mini meditation gardens and
miniature gardens
12.Shared Forces
 Sharing sustainable living spaces
Today’s Garden Center; Oct 15, 2012