Back by Popular Demand

By Stephen Bean, CLA Member posted 01-30-2018 12:22

Retention Marketing Methods Will Help Keep Your Current Customers Returning Again and Again

“Do what you do so well that they will want to see it again” – Walt Disney

Having authored numerous articles on the technicalities of – and necessity for – attracting new customers and improving market share, I thought it was time to discuss retaining the ones you already have. It’s the second piece of the puzzle.

Did you know that it is far less costly to keep a customer you already have, as opposed to attracting a new one? It definitely is. Of course, it’s ideal to do both at the same time. If you’re seeing the same customers in your laundry on a regular basis, as well as some brand new faces, then you are certainly doing things correctly.

However, I believe that we tend to spend the majority of our efforts and money primarily on attracting new customers, while displaying somewhat of a sense of entitlement when it comes to retaining the patrons we already have. In other words, we often forget that customers are human, and they need to be made to feel appreciated and welcomed long after they complete their first load of wash at your store.

The term I prefer to use to describe the methods for keeping current customers is “retention marketing” – while promoting your business to attract new customers is called “acquisition marketing.” The specific marketing technicalities of each are different from one another.

There are, give or take, about 30,000 self-service laundries within the United States. So, there clearly is no shortage of facilities where people can go to do their laundry. What’s more, it’s a fact that we have become a very mobile society; we can drive pretty much anywhere we desire. As a result, there is nothing to guarantee that your customers will to stay with you over the long haul.

Are you familiar with the “churn factor?”

It’s sometimes called the “attrition rate.” In the broadest sense, it is defined as the number of customers moving out of a collective group over a specific period of time.

For example, let’s say that you have a 500-customer population. Let’s also assume that, during the year, 40 of those clients leave you and only 15 new customers come on board to replace them. This means that you’ve lost 5 percent of your customer base – in other words, a 5 percent churn. Obviously, that’s not good for your business, especially if it occurs again and again over a period of years.

To prevent churn of a negative nature, you must employ customer retention techniques, along with your typical acquisition marketing methods.

Today’s customers are not faceless commodities, as they often were thought to be by many retail establishments in the past. These days, the shoe is on the other foot, and the retailer in fact has become the commodity. This is true because in the current highly competitive marketplace in which there is an abundance of vended laundries all offering the same service, customers have numerous options.

As Stanley Marcus, one of the founders of luxury retailer Neiman Marcus, once remarked, “Why do you think we have so many department stores in malls these days? It’s because each of them does such a poor selling job that they survive by taking each other’s unsatisfied customers.”

Because customers have so many choices, they feel they are entitled to receive certain levels of service and to be shown that they are truly appreciated.

Retention marketing requires you to broaden your definition of the term “marketing,” along with its function and tools. First and foremost, listening to your current customers becomes a major priority. The idea is to use customer feedback tools on a regular basis by letting your patrons know that you want to hear from them and that you definitely need their input. Feedback tools can include surveys, focus groups, one-on-one interviews, and even mystery shoppers.

It’s amazing what you can learn from these retention techniques about the quality of your service. Just think of all the potential problems that could be caught early on by mystery shoppers that can help prevent customers from potentially leaving your business for another laundry down the street.

An excellent method for gathering customer input is to place a customer feedback box in a prominent section of your store. Also, include the following copy (or something along these lines):

“While you’re waiting for your laundry to be processed, please take a few moments to fill out a survey and let us know how we’re doing. When completed, place the survey in the locked box – where only I, the owner, will see it. Your responses will be held in the strictest confidence.

“Each month, I will select the 10 best survey responses – be they complimentary or critical – and the customers who submitted these responses will receive free washing and drying for a month.”

Retention marketing requires that you set up a specific system using either a phone call or customer feedback cards (with a strong motivation for customers to fill them out) to check on customer satisfaction. Also, consider thank-you notes and gifts for long-term loyalty. This retention system should be created and designed as carefully as any other marketing tool within your arsenal.

The major airlines have become quite skillful with regard to retention marketing, as evidenced by their popular “frequent flyer” programs. These programs have eliminated a previously common lament of the business traveler, who would complain, “I fly with this airline 30 times a year, and the kid next to me is flying for the first time and is paying less.”

Acquisition and retention marketing must be considered as 50/50 partners, and your marketing budget dollars need to reflect that. And, if you imitate some of the successful retention marketing models of the airlines, for example, you stand a great chance of your laundry business soaring to new heights as well.