In an era of tight regulations on telemarketing, one area of outbound dialing has grown in popularity: proactive customer care campaigns. Unlike traditional direct marketing, these campaigns let a company provide highly differentiated, personalized services to existing customers that reinforce the company’s brand identity and value proposition.
Though it may appear counterintuitive and costly to spend more time on the telephone with customers, the long-term value of delivering better service pays dividends, including higher customer retention and loyalty; agent retention and job satisfaction; increased profitability; and new revenue streams.
Proactive customer care is more than a feel-good benefit to customers. Here are five reasons proactive care makes good business sense, along with tips on how to leverage your experience and technology to initiate a campaign:
Proactive care makes for loyal customers, increasing their long-term value. Direct marketing should not focus solely on securing new customers. The more contacts one makes with an existing customer, the “stickier” that customer becomes, increasing long-term value.
Following up on a service call, determining whether a purchaser is happy with a new product and alerting a customer about a recall are ways to stay in touch with customers to demonstrate a company’s value beyond the initial sale. Meeting or exceeding customers’ expectations through proactive customer care can help maximize their life span and thus their profitability.
Proactive care increases customer retention, which costs less than winning new customers. What is the cost of adding a customer or replacing lost business? Consider the highly competitive telecommunications industry. Wireless carriers calculate their gross cost per subscriber addition at anywhere from $275 to $425.
It takes an average of 12 to 16 months to recoup that initial investment, according to the Yankee Group. As a result, carriers don’t start profiting from a new customer until the last few months of the typical two-year contract commitment.
Here’s where proactive customer care can put a dent in customer churn. What if wireless-carrier telemarketers proactively called customers to advise them in advance of their prepaid accounts nearing depletion? Or to inform them about more appropriate calling plans based on their cell phone use patterns? Even if customers switched to lower-cost plans, the value of locking them into new two-year contracts is easy to measure.
Proactive care drives new revenue streams. identifying their most profitable customers, companies can develop proactive care strategies that maximize revenue potential. In financial services, most institutions have customers who are costly to service while others have significant long-term revenue potential.
A proactive care approach might segment these groups and leverage low-cost, online self-help to serve the many less-profitable customers while reserving personal interaction for the most-valued segment.
Following up via phone with this top-tier segment to convey the status of an equity loan, determine whether a credit card has been received or learn whether someone is happy with a new checking account opens the door for other discussions around additional services that a customer might find of interest.
Proactive care mitigates the effect of telemarketing regulations. These campaigns also can alleviate the effect of no-call regulations. If a company has a prior business relationship with a customer, this creates a chance to transform telemarketers into customer loyalty ambassadors.
Companies in telecom, finance and other industries can use outbound-calling solutions to welcome new customers, provide the latest status on outstanding payments, announce special offers, acknowledge payments received and check on unusually large expenditures for security reasons.
Proactive care increases agent job satisfaction and retention. Just as customer replacement is costly, so is employee replacement. The telemarketer’s job traditionally is marked by high turnover and rapid burnout. According to Spherion, an international recruitment firm, the turnover of one job on average costs a company 1.5 times an employee’s annual salary when separation costs, overtime payments to temporary workers, loss of productivity and replacement costs are considered.
Proactive care agents who spend time solving customer problems, providing useful information and having meaningful interactions with customers have a more satisfying work experience and keep their jobs longer – easing the corporate burden of employee turnover while strengthening relationships with customers.
Financier Warren Buffett has noted, “Price is what you pay; value is what you get.” Unfortunately, amid the cost-cutting fervor of recent times, companies have lost sight of delivering value. Customers have shown time and again that they are willing to pay more for higher perceived value.
Proactive care lets companies provide targeted services that reinforce their brand and customer value proposition. Even if these services cost the customer more, they will attract a loyal following of individuals who appreciate being treated like valued customers.
How to get started. Here are tips for launching a proactive customer care strategy:
· Commit to proactive customer care and design campaigns with a long-term view to support strategic business goals.
· Observe customer behavior and buying patterns and tailor campaigns to fit the needs or interests of customers.
· It might not make sense to reach out proactively to every customer. Consider the lifetime value of customers when determining targets for a proactive campaign.
· No-call regulations are a call to action. Direct marketers should use these regulations to focus on boosting revenue with existing customers by shifting to a more indirect approach, using service as the differentiator.
· Ensure you have all the information you need and be careful not to overuse the process. Car dealers that call after each service visit to see whether you’re satisfied could cause more harm than good if your car has chronic problems.