There is a long standing debate in the marketing and advertising world about what is more effective – hunting for new customers or concentrating on customer retention? Definitely looking for new markets and new customers is interesting and challenging, but keeping long standing loyal customers is, in many instances, more impactful on the bottom line.
In a recent market study, General Motors estimated the lifetime value of a loyal multi purchasing customer at $276,000 over 25 years. Apple Inc.’s. loyal customers have generated over $373 billion…yup that’s a B… in life time sales. Think of WestJet who make a point of knowing their returning passengers and recognize their loyalty. These businesses understand the power and application of customer retention.
Ironically attracting new customers is more expensive than selling to existing ones. However, hunting for new markets to grow a business is often seen as being more interesting and innovative than figuring out how to re sell or up sell to existing customers. Customer retention has a direct impact on profitability with the loyal returning customer generating 1.7 times more revenue than the one time customer.
The underlying secret to retaining customers is truly understanding their needs and the delivery of consistently excellent service that responds directly to these needs. For example
► How does the customer want to be treated?
Yup, it’s about the customer service experience.
►What makes customers return to a vendor or product?
Are there specific needs that, once met, will encourage a customer to return?
Think of Amazon.com or clothing giant Lands’ End who are the pioneers in offering free delivery. Their efforts at retaining customers have built them a loyal base of consumers who return again and again, because they like the way they are treated!
So, what do we do in library land for our legions of returning customers?
Many public libraries:
● Charge customers if they lose their library card
● Limit the number of books or cd’s customers can borrow
But to be fair, we also:
● Purchase and promote new resources
● Present library events and programs
● Say “thank you” or “come again” at the circulation desk
● Offer occasional Fine Amnesty days or Customer Appreciation events
Really, is that all we do to keep our customers coming back?
Over the next few months GPL will be having this conversation with our customers, staff and the board as we re-think customer retention and craft a new three year strategic plan that will reflect the importance of customer retention.
I am hoping we come up with some great new ideas. Stay tuned!
Kitty Pope #19 May 2014