The Quisenblog

In marketing, we love the chase. Nothing gets our adrenalin pumping, our heart racing and concentration focused like the prospect of closing a new customer.

“New business” is the sexy part of what we do. It’s our opportunity to marshal all of our skills, arguments and resources to identify, persuade and close a new customer. It validates our product strengths. It’s the pay-off for all the planning, strategizing, analyzing and quantifying we’ve done. It’s a validating notch in our marketing belt.

Yet as important as winning over new customers is, rarely is the new customer our most profitable customer. For many organizations, it’s not unusual for up to 80% of its profits to come from just 20% or less of its customers. And more often than not, that 20% are those customers we won over long ago.

It is important for all of us in marketing to recognize what an important resource our long-term customers are. Not only do they buy from us often (usually with very little persuasion from us), they know us pretty darn well. They know our strengths. They know our values. And yes, they even know our weaknesses (though most of the time they keep that part to themselves). And by them using our products, they are exemplifying our benefits in the flesh.

The idea that once you’ve sold someone, you won’t need to sell them again is on its face ridiculous. Customers are bombarded all the time with competing messaging, new opportunities and new offers. The fact that most customers are staying put may have less to do with what you’re doing and more about the fact that they’ve yet to be approached with a more compelling offer.

Customer retention isn’t as sexy as customer development. There is no “close.” Customer Relationship Management is a process, not a destination. The dollars allotted to CRM on a spreadsheet are hard to translate into ROI. Yet without it, you’ll find that customers are churning out at an accelerated rate, and you won’t have much of a clue why. And replacing them is expensive. For most organizations, it can cost up to five times as much to develop a new customer as to retain an existing one.

Okay, so we can all agree that creating a Customer Relationship Management system for your organization is important. Enough with the pep talk, how, exactly, do you approach it? I’ll offer up a few suggestions in our next post.

Posted by Mickey

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Mickey On Clients, On Customers, Ramblings CRM, customer acquisition, customer relationship management, loyal customers, new business

A lot is being said and written about Toyota’s recall of thousands of its units due to faulty accelerator pedals. The media is talking. Customers are talking. Late-night talk show hosts are talking. But Toyota itself? It’s not talking.

To be fair, Toyota spokespeople are talking. It’s just that they’re not saying anything. Peruse this ad that ran in this Sunday’s paper, and you’ll see what I mean.

While I have no doubt that Toyota’s intentions are good and that the company’s priority is the safety and satisfaction of its customers, one would never know that from the way the company is behaving. Its take-it-slow, let’s-get-to-the-bottom-of-this-and-have-all-the-pieces-in-place-before-we-go-public approach isn’t doing much in the way of maintaining trust. Customers have urgent questions now. Is my car affected? Is it safe to drive? When will it be fixed? What assurances can the automaker give me it is safe?

With all the questions that abound, not just from Toyota owners but from dealers, the media and the general public, this close-lipped approach is proving to be a violation of the trust Toyota has spent decades earning among the car-buying public.

The reality is this: if you’re not out there telling your story, somebody else will be. And you never know who that’s going to be. In these days of Social Media, where anyone with an Internet connection has a microphone, there’s going to be no shortage of commentary. But without a corporate voice, there’s no filter for this information, and the public is left with the uncomfortable feeling that, “There’s something Toyota’s not saying.”

Why is it when there is some major auto recall that the manufacturer gets sweaty palms about the whole notion of transparency? It is the ONLY thing that will contribute to maintaining/rebuilding the trust that is necessary to regain its former position. One need only go back to the Tylenol tampering episode of 1982 to see how it can be successful.

Adopting a “you-know-what-we-know” stance, if taken with the interests of the customer in mind, would go a long way to soothing buyer/owner/dealer anxieties and also nip a lot of the media finger-pointing and speculation in the bud. Accept the fact that you’re going to be fodder for late-night comedians for a while. Don’t stress the fact that some of the answers you’re giving are uncomfortable or uncertain. Trying to do business behind a curtain during a time of crisis management is opening the door to long-term erosion of loyalty.

Toyota’s #1 asset during this time is its base of loyal customers. But how can your most passionate owners stand up for you if they don’t know what’s going on?

From a practical standpoint, there’s a lot Toyota could commit to in order to minimize the damage to its reputation. Offering a 10% discount on new models when owners trade up from a recalled model. Offering an industry-best 10-year warranty, retroactive to 2009 models. Offering free upgraded loaners immediately to those affected.

But above all, be transparent. Take the attitude of, “If I were a customer, how would I expect the company to take care of me?”

It’s the feeling that “there’s something they’re not telling me” from all stakeholders here that is sewing the seeds for discontent.

Posted by Mickey

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Mickey On Customers crisis management, customer satisfaction, incentives, loyal customers, Social Media, Toyota recall, transparency, trust