Customers- Your Most Valuable Asset

29 Ways to Maximize Your Customer Investment What's your business's most-valuable asset? It's not bricks, mortar or inventory—it's your customers. Repeat customers can be worth up to 10 times more than one-time triers. That's why savvy direct marketers spend time and money on maximizing their investments in their customer bases. If you want to make your best customers more profitable, implement some of the following ideas: General Tips 1 Segment your customers and communicate with them based on their profitability. After all, all customers are not equal. 2 Apply the old 80-20 rule: 80 percent of your business comes from 20 percent of your customers. 3 Increase the frequency with which you send promotions to customers—whether delivered by traditional mail or e-mail. The more opportunities you give customers to buy, the more likely it is they'll buy more. 4 Stuff outgoing statements with cross-selling offers or new product tests. Then test placing package inserts in your own outgoing orders. Promote special product offers from the same category as the product being shipped. 5 Use e-mail and Web site links to cross-sell related products and make purchasing recommendations. Court the First-timers 6 Acknowledge a customer's first purchase with a personal letter. Or send a less expensive—but every bit as sincere—postcard. 7 Send a strong sales-oriented and relationship-building customer newsletter to first-time buyers. Customer newsletters shouldn't be full of company fluff. Instead, use them to position your products against your competition, build customer relationships and sell products. Make a new customer feel special by introducing a special offer to encourage that all-important second purchase. Woo the Faithful 8 Send a customer newsletter to segments other than "newbies." Use this newsletter to make exclusive offers unavailable to the masses. Also use it as a clearance vehicle for bargain buys and one-of-a-kinds. 9 Treat your best customer "advocates" as solid gold. Make them exclusive offers. Send them promotions meant to make them feel special and important to the future of your business. 10 Give your best customer segments a title and refer to it often: e.g., Preferred Customer, Platinum Customer, Red Carpet Customer or Cream of the Crop Customer. 11 Send your best customers a traditional or electronic postcard pre-announcing your catalog's arrival. Include gift suggestions, highlighted new products and a shot of your catalog cover to make it easier to find in the mail. 12 Invite your best customers to use a special password to access a "your eyes only" Web page selling exclusive clearance items. 13 Start a birthday club. Give a customer the option to provide you with the month and day of his or her birthday, then send a card and gift certificate. Create a special promotional event for, say, "October birthdays only." 14 Celebrate and acknowledge a customer's first anniversary using the same medium (e.g., phone, mail, Internet) that he or she used to place the order with you. 15 Make a special first anniversary offer that encourages another purchase. 16 Take a tip from companies such as Jackson & Perkins and Wolferman's English Muffins: Create a customer test panel that gives your best customers the chance to provide input about new products. 17 While your best customers may not need special incentives to buy more from you—test offering incentives that are "packaged" as Preferred Customer rewards or special thank- you benefits. By positioning discounts, free shipping, free gifts, club membership, and so on, as privileges earned rather than incentives to buy, you'll strengthen customer loyalty. 18 Provide your very top customers with a personal 800 number to call as well as a personal customer service contact to help with buying decisions and resolving problems. 19 Ask customers for their opinions. While an opinion is a "sample of one" and should be treated accordingly, people are flattered to be asked for their ideas and opinions. You'll strengthen customer relationships and gather good ideas. 20 Segment offers to upgrade active customers from one level to the next. For example, offer free shipping with orders of more than $50 to customers whose average order size is less than $50. 21 Ask for referral names. Referrals are a highly cost-effective source of new customers. Thank customers for sharing the names of their friends and family members. Send a thank-you note, and include a gift certificate. 22 Follow-up with dissatisfied customers who return merchandise. Call, write a letter or send an e-mail expressing concern about the customer's overall satisfaction. Use what could be a negative situation to strengthen a future customer relationship. 23 Use your database to upgrade customers who bought an older model product (e.g., car, computer, cell phone, DVD player) to a newer, state-of-the-art version. 24 Use your database to cross-sell accessories that coordinate with previously purchased products (e.g., shoes to match a purse, diamond earrings to go with a necklace, a new attachment for a riding lawn mower). Experiment with Media 25 Give customers a choice in how they want to do business with you. If you have a catalog, local store and Web site, tell them you have all three. Encourage them to shop wherever it's most convenient for them. Track sales; you'll most likely find you increase overall sales rather than cannibalize any one source. 26 Test delivering a newsletter via traditional mail vs. e-mail. Different customer segments will respond differently to the two types of media. 27 Invite customers to participate in an event—online, in the store or in the mail. Invitations get opened and read and make people feel special. Old Are New Again 28 Reactivate customers who haven't bought in the last 12 to 24 months. It's easier and more cost-effective to reactivate an inactive customer than it is to bring in a new one. 29 Once you have a reactivation promotion that works, continue testing it further into your inactive customer segments. For example, if you successfully can reactivate customers who haven't bought in 24 months, test your reactivation package with customers who haven't bought in 36 or 48 months. Whatever you do, be sure your customer knows that you know how important he or she is to your company. Pat Friesen is president of Pat Friesen & Co., and is a direct response creative strategist, copywriter and trainer with more than 25 years of directmarketing experience. She can be reached at (913) 341-1211, or by e-mail at friesen_pat@hotmail.com

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Customers- Your Most Valuable Asset

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