The 'Marshall' Plan -- or, Customer Aftercare: How to Spend Less and Sell More

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My wife likes to shop at the local Safeway. Is it because of the competitive prices? Yes, that's part of it. Is it because of the convenient location? Yes, that's part of it, too. She also likes the produce department. But the biggest reason she likes to shop at the local Safeway is "Marshall."


Now, Marshall is a very good checkout person. He's fast, efficient and seldom makes a mistake. But his "job competency" is not why my wife keeps going back. She keeps going back because Marshall always has a warm and friendly smile. And because when Marshall asks, "How are you today?" well, by golly, you just know he's sincere about it.


You see, for those few minutes while she's a customer in his checkout line, Marshall makes my wife feel genuinely valued and appreciated. And week after week, she buys our groceries at "Marshall's" Safeway.


As marketers, salespeople and business owners, very few of us will have the same weekly, face-to-face opportunity as Marshall to make our customers feel valued and appreciated. And yet, if we're smart, we'll ensure we have our very own "Marshall" Plan in effect. We'll make sure -- once we've "rescued" our customer from the grips of our competitor -- that we have a customer aftercare program to maintain the health and increase the profitability of that relationship.


This makes perfect marketing sense. And with studies showing that the total cost of getting a new customer is 10 times that of simply holding onto an existing one, it also can make you plenty of dollars and cents, particularly when you consider that a 5 percent improvement in customer retention can lead to an 85 percent increase in profit. You don't have to be King Solomon to see the wisdom in those numbers.


For example, imagine that you work in real estate as either a real estate agent or loan officer. John and Judy First-Time Homebuyer purchase their first home or close on their first loan through your company. Assuming that John and Judy are upwardly mobile professionals, they'll probably purchase a minimum of another four to five homes during their lifetimes.


If you're in the lending business, that's another four to five loans, at a minimum. If you're an agent or broker, there exists the potential for another eight to 10 transactions (counting the sells as well as the buys). John and Judy alone -- even if they never send you a single referral -- are conceivably worth many thousands of dollars to you during their lifetimes. But if you're actively working on this relationship -- if you're putting forth a consistent, concentrated effort to make John and Judy feel valued and appreciated -- then they'll send you lots of referrals. I guarantee it.


Now stop a moment and multiply the above example by 40, 50 or 500, and you'll understand why today's savviest marketers are placing greater emphasis on share of customer and lifetime value than they do share of market. But without proper planning and execution, you won't come close to realizing John and Judy's full lifetime value. The same thing holds true for any other industry as well.


Good communication is the key. The key to increasing your share of customer and maximizing lifetime value lies in continually strengthening the bond between you and your customer. It should come as no surprise to anyone that good communication plays a major role in this bonding process.


An organized and consistent communications program will keep you in touch with your customers on a regular basis -- and increase your top of mind awareness with them. Plus, by welcoming and encouraging their feedback you'll be reminding them how very important and very special they are to you. And we all like to feel special, valued and appreciated. We all like to feel loved.


In a magazine article a few years back, marketing consultant and author James Rosenfield wrote: "Every customer relationship begins with something that looks like love." Your objective as a marketer or sales executive is to move your new customer beyond "something that looks like love" to the real deal.


Ideally, you want to turn each new customer into a walking, talking, word-of-mouth advertisement for you, your products and/or services. And a proactive, customer aftercare letter program can go a long way toward achieving this ideal. Most of us, unlike Marshall, don't usually have the opportunity for weekly personal contact. In that case, direct mail is an efficient and effective customer retention tool. Here are a few examples of the type of communications that should be in any good customer aftercare letter program:


· Thank-You Letter: To be mailed the very day the sale is closed. Sure, this is something we all do -- right? Well, maybe all of us do it but I know from experience that a number of those other folks don't.


· Letter From "Mr./Ms. Big": To be mailed 10 days to two weeks after the account is opened. In a smaller company it should come from the owner, and in a larger company from a senior manager. This letter is a warm ownership/senior management welcome and also informs the new customer that, ultimately, "the buck stops here." Here's a sample wording: "If the product or products you've purchased, or anyone in my organization, fails to meet with your complete approval -- now or in the future -- I would like to know about it."


· How Did I/We Do? Letter: Mailed a week after the sale. It's a friendly letter explaining how important honest feedback is to you because it's the only way you can improve. Attached to the letter is a brief customer satisfaction survey and stamped, return envelope. The feedback you receive from this survey will be of tremendous value to you in your ongoing marketing efforts. This feedback will help you make more sales and generate increased profit.


· Happy Anniversary Letter: "It's been a year since you opened your account with us, and I just wanted to say Happy Anniversary and thanks again. We look forward to working with you for many more years to come."


· Random, Customer Appreciation Letter: "Do you ever get so caught up in the mundane everyday responsibilities of your job that you sometimes overlook things? I know I do. And that's why I'm writing you." From that point you go on to tell your customer how much you value and appreciate them and their business. Don't do any selling in this letter. Here's a helpful hint: Mail this letter right before you know your customer will be in contact with a large number of people. For example, right before Thanksgiving or before a trade convention or industry gathering. This way you'll get maximum mileage from the positive word of mouth this letter creates.


· How Are We Doing?/How Have We Done? Survey Cover Letter: You should regularly survey your customers, at least once a year. Just the act of sending the survey sends a message about how important they are to you. But the greatest value and benefit to you and your business is the feedback you'll get on how you can improve. So, word your cover letter in such a way that it will encourage response. "At ABC Widgets, we're committed to offering you affordable, high-performance widgets backed up by a level of service that sets the standard for the industry. Your feedback is of tremendous help to us in measuring how well we're meeting that commitment." The survey, whether or not they return it to you, is yet one more indication that they are important to you.


· Birthday Cards: It used to be that if you visited any Petco store you'd find forms to fill out with your pet's name, address and birthday. Complete one and during the month of your pet's birthday Petco would send Fido or Fifi a birthday card and an invitation to come to the store and get a 10 percent discount. Shouldn't we treat our human customers with similar care and thoughtfulness? I think you know the answer.


· Handwritten "Congratulations" Cards: Whenever you or your assistant read or hear about awards, appointments, promotions and other forms of recognition earned by your clients -- or their children -- acknowledge this with a letter or card. This is a small thing to do but it is greatly appreciated and will pay big dividends.


· Thanksgiving Letter: What better time to show our thanks and appreciation to our customers than right before a national holiday dedicated to being thankful and appreciative? One client I sent my Thanksgiving letter to liked it so much he insisted on paying me for it so that he could adapt it and send it out to his employees and customers. (For a copy of this letter, send me an e-mail to enicastro@positiveresponse.com with Thanksgiving Letter in the subject line.)


As Thanksgiving is traditionally the start to the holiday season, another benefit to this letter is that you can work in your holiday greetings and best wishes for the season. This way, you'll be among the very first to do so, and your sentiments won't get lost in the deluge of Christmas cards and Season's Greetings that will come pouring in later.


In addition to the above communications, you'll also be sending your normal promotional mailings and regular reminders of the benefits of doing business with you and your company. Plus, you'll also want to send a quarterly newsletter.


With the inexpensive database marketing technology available today, there's little reason for any company not to have a well-thought-out, consistent and clearly defined customer aftercare program. There's only one drawback -- it's not a quick fix for lagging sales. But the benefits are many, including: maximized customer retention and loyalty, reduced marketing costs and higher profit.


Most important, your customer aftercare program will set you apart from the vast majority of your competition and give you the edge that leads to higher sales and profit.


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