While it may take weeks to close a first sale, repeat business often can be wrapped up in a day, because the customer's already sold on your quality and value. Cultivating repeat customers is smart business, says Austin, Texas–based customer loyalty expert Jill Griffin, who consults for corporations such as Microsoft and Sprint. At many businesses, she says, roughly 80% of a company's revenue is generated by 20% of its clientele.
Repeat customers and referrals account for 60% of the business for Alure Home Improvement and Alure Basements in East Meadow, N.Y. “We develop relationships,” president Sal Ferro says. “We've grown and changed this company tremendously over 20 years, and it's all based on leveraging the existing customer base.”
TRACK NEEDS, STAY IN TOUCH At Alure, sales and installation staffs are trained to informally survey customers about upcoming projects. That information goes into a Computools database in a program called “Future Needs.” At the appropriate time, the customers are contacted with current specials, a showroom invitation, or an offer to have a designer come out for a home visit.
Alure customers receive an informational newsletter two or three times a year, as well as a new company brochure annually, e-mail blasts, and spring and fall flyers announcing promotions. (Savvy loyalty builders will give special offers to high-value customers, Griffin says, and pay attention to who redeems those offers.)
Alure also invites its customers to the showroom for an annual carnival with clowns, magicians, face painting, kids' crafts, games, and food.
“When people are in the showroom, they talk about their projects,” Ferro says.
Last year, about 40% of the business at Dalco Home Remodeling in Bridgeton, Mo., came from repeat clients and referrals, says sales manager Tom Hayes. Customer communication is key. After a salesperson makes a presentation, Hayes sends a letter thanking the prospect for the opportunity to do business. He also sends a card after every job is completed. In addition, Dalco's customers receive annual invitations to a private sale. Existing customers receive an additional discount.
“We do it in January,” Hayes says. “It's a good way to get the business going each year. A lot of our repeat business is the person who buys thermal windows this year, a roof the next year, and siding the year after that.
“We learned a long, long time ago, that's how you stay in business,” Hayes says.
HEAR THEM OUT Salespeople at Dalco also must follow up with customers to thank them and to address any complaints. Making it easy for customers to complain — and taking their comments and complaints seriously — is a powerful way to build repeat business, Griffin says.
It pays to set firm rules about response times regarding complaints, because most companies only hear about 10% of them. The other 90% show up in the form of unpaid invoices, rudeness to company representatives, and lots of negative word of mouth.