[Mike Halliday]

Just got back off my holidays and while away had a lot of time to think about bussiness and how things could be changed for the better.

One thing I was thinking about was if customer loyalty had anything to do with how much they paid.

Do cheap customers next time look again for the cheapest option or do they think ......"the last guy was cheap, I will call him again" 

Will customers who paid a top price be tempted by  a lower price the next time they need a carpet cleaner.

So a cheaper carpet cleaner will spend less on marketing as his customers tend to stay loyal (but makes less money)  but a higher priced carpet cleaner will lose a higher percentage of existing customer so will need to spend more on marketing to replace them.......but could earn more money by charging more.

I'm in the latter bracket, I charge high ( but give a top job) but I think my customer retention could be better.

Is there a sweet spot where price and customer retention are exactly right to maximise profit?

[Kev Martin]

It is a simple equation in my mind.  You work hard on your best paying clients by doing everything to retain them but you also should develop them by  offerering them more services whilst you trim away the lower end of your clientele and only utilise them when you need to and want to

[Ian Harper]

Mike

Nice to see you looking at this type of thing.

First as you charge more you should have to budget for regular mail. which I know you dont like because you leaflet you area regular and dont see the need.

So if your customer see your leaflets and offer on them they think they know what you charge. well if you mailed them with an offer that was better or different with an exp date then they would know that you feel different about your customers.

Having a introductory offer means that its for new people. and any other offers are time limited. you can do as I have just started doing put a second offer on your leaflet which is for past customers only. (saves postage)

you also need to change your offers as its not a offer if its always the same deal. you can put stuff in and out like spotters etc that would keep in line with any laws.

I am going to try the 3 letter idea on my leaflet that is for past customers. putting a long exp date and each turn that area gets the leaflet you can times running out. and make a big deal on last time they get leaflet before end .

People expect confusion over price just look at utility's pricing, and broadband has just been taken to task over their pricing. did you know as long as one in ten gets the speed thats ok with the government. making it easy for people to guess your price works against you. that why I have my tag line "The more carpets you have cleaned the cheaper each carpet becomes" they cant work out what the cost would be to them as they dont have any fixed points. single room is £50 to past customer does not mean that 3 will be £150

It supply and demand marketing -)

AS long as the offers are genuine and transplant. that means that if a friend of a past customer calls and the price is different for same then you can explain why that is. 

Lastly, events. people have carpets cleaned for a reason and its not only because they area dirty. Thats why we are busy at xmas

babies, dogs, seniors, are just 3 events in life. its like the bookends of life babies poop on carpet just like seniors, puppies and old dogs. 

if you are really cleaver you can set up your database to tell you when the baby should be potty training. great time for a letter from you.

Hope this helps

PS  With respect, Kevin the more service means more experance for marketing those services. more equipment etc. and jack of all trades image. how can you be a speciality if you do other things? many years ago thats how carpet and upholstery was marketed so people could tell the difference. plus if you have time! I have been here, I made the choice to learn marketing and not waste my time and money keep adding on more and more services to fill my day

[Mike Halliday]

Some good points but thy don't answer the basic question.... Who is the most  loyal ? The higher payer or the cheaper customer.

if the £45 a room customer constantly comes back then they are more valuable than a £65 paying customer that cost £20 in marketing to acquire.

.......  but if you are paying £20 in marketing to get a customer who pays £120  but they only use you once then you still are earning  more profit.

[Shaun_Ashmore]

I can see your rational Mike, personally I'm not a big fan of discounts specially discounts to grab a new customer as it doesn't create loyalty BUT you could do your normal successful marketing then offer 3 fo2 on past customers pulling them back in.

[neil 47]

Mike

simple the cheap guy does more hours per year and they are filthy so need doing every 3 months so they remember you and they are mostly on fb so add you as a friend and when you post it reminds them again sell to the bargain culture .

the poor old Mr expensive carpet cleaners clients are aged and forget easily they haven't got facebook, and after you have cleaned them, they don't need doing for another 2 years by that time they have forgotten where they live never mind who cleaned the carpet .

Expensive are more loyal but they are not repeat customers enough.

I don't market and i'm not cheap nor expensive and my repeat is about 20% somtimes higher

[Carpet Dawg]

I think the cheaper end are also loyal and more likely to refer you as everyone likes a bargain.  But as soon as you put your price up to anything meaningful, they'll run for the hills.

I think the high end get it done less often/are more careful/own better quality carpets and furnishings that stay looking good for longer etc.. So you'll need a lot of them on the database.

[Shaun_Ashmore]

That's true, when I first started  on my own after being employed I was cheap I didn't know how to get customers apart from by price, my recommendations and repeats were approx 90% as soon as I increased my price from £15 a carpet (1992) to £18  3 years later my repeats and referrals dropped like a lead balloon to approx 60%, it's about 60% now although I don't charge £18 a carpet anymore.

[Deep Cleaning Solutions]

High end or low end customers ...... It does not matter because if they where happy to pay what they paid last time they will pay it again.

If you want decent retention you need to be constantly reminding your customers that you exist 

Customers will lose your number or business card so the next time they want it doing they will call someone else or find your number in the YP or online by pure luck.

We used to send reminders in the post but it's incredibly expensive to do now so we send a text with textlocal to all of our past customers in our database each summer. I know some on here don't like this idea but it brings in an immediate 2 or 3k and our customers tend not to delete the text so I often get texts for jobs quite regularly because it's a constant reminder on they're mobile.

Another thing we have started doing that I wish I'd done years ago is we ask for an email address from every customer. When booking in we tell them that we need the email to send the invoice to as we do not provide paper invoices anymore because of the environment ect blarh.

If you plan on texting or emailing your database it's best to get the customer to sign a survey form with an opt out option in the small print at the bottom of the form to cover yourself.

Something else I should of done sooner is get as many customers as possible to like my fb business page as this is another constant reminder that you exist 

There are more personal retention strategies like writing a letter, loyalty programs or even calling past customers but for me it does not matter if they are rich or poor, 80% of past customers need constant reminding to use you again!

[Hilton]

There is no sweet point as such its simply a case of setting your price to cover your operating costs with a reasonable profit.This will be down to each individual or business but should be consistent.

Retention is all about contact as mentioned above depending of course on the quality of the service provided, generally speaking there are four elements to your marketing which you have to process to build and maintain business as follows;

Cold Prospects......who you market to that do not know anything about you or your service.
Non Converted Prospects.......Those that you marketed to already have expressed an interest but not ordered yet.
Lapsed.....Those that have used your service but not been in contact for a period of time defined by what life time value you place on your customers.
Loyal.......Those that have used you and continue to use you and probably recommend your services.

Market to all of these all year long on a regular basis and you will obtain and retain customers who will cover your operating costs and return profit.

How you market , leaflet, local paper, radio, etc will be defined by the budget you set aside for your business as a marketing budget but the four mentioned above should be consisted as sacred and stuck to without fail through out the year.