[Oliver James]

Since I started up (from zero customers 5 years ago) I have had a total of 1055 customers through my books - mostly gained through canvassing (of which I have now stopped doing - hopefully forever.) 

I now have 414 customers on the round.

Of the 641 customers that are no longer on the books, approx 40% are cancelled customers (ie I have found them, ahem,  'a bit awkward to work for'...  );
 and 60% are suspended (ie. they have moved, found another cleaner, or they have leaned across the desk, pointed a stubby finger at me and grunted at me in their best Lord Alan Sugar voice:

'You're fired'         

These figures are a bit skewed by the fact that in April of this year I let go of about 150 jobs due to employing "not going as planned" ;-)

My 'flake' rate is 641 divided by 1055 = 60%.

My retention rate is about 40%.

I'm looking for information about how long customers stay with me so that I can allocate an advertising spend to each new customer gained.

For example; if the average customer stays with me for 5 years, and they spend £120 per year, of which 35% is net profit, then their lifetime value to me = 35% of £120 = £42x 5 years = £210.

The maximum amount I'm prepared to invest to  "make" this £210 is 25% ie. £52.50 - giving me a return on investment of 400%.

Hope I am making this clear... What I'm trying to do is:

a) Find out how my retention rates compare with industry norms (which is why I'm asking about retention rates).
b) calculate what the average lifetime value of a customer is.
c) Allocate advertising budget to the most effective form of (tracked) sales generation (seo / leaflets / other advertising) with the amount being allocated being 25% of the Lifetime Value of a customer.

To make this calculation I'm looking for information on retention rates.

If you can help me out Please state:

1. Your customer retention rate.
2. Wether the figures are for established work (more than 5 years) or new work (less then 5 years).

So



a) state the time period that you have gathered your figures over.

b) Clarify    i) If these figures are for established work more than 5 years old
                        ii) or wether you were round building.

c) If it is established work, please state how many years the work is has been established.   

[Dave Willis]

Why bother? 

[Ian101]

no way am I having a go Oliver as yes its important to know your numbers but prime example of how some of us windies keep trying to make this job a lot more complicated than it need be. 

[Clever Forum Name]

Tax man is getting cleverer every day.

[Shrek]

Why would you want to know other people's business? Whatever figures anyone has is totally irrelevant to you, how would use the information?

[8weekly]

Leaving aside the calculations, the ratio of retained customers is interesting and probably not a million miles from mine.

[Smurf]

There are NO SECRETS of marketing window cleaning or any other service for that matter if you ask me.

[nathankaye]

Its all about wearing quality pouches     n being professional 

[Smurf]

Yehaa! 

[Spruce]

I go with Ian101 on this one.

However, you could make this simple. Let's say you drop leaflets, advertise in a local rag, also have an advert in the yellow pages and canvass (door knock.)
As each new customer comes in, a simple question to ask is where you got our name from. Over a period of a year you will have a pretty good idea where your enquiries are coming from by numbers. You don't need to put a value to it.

If you get virtually nothing from Yellow pages except sales callers, then discontinue that. If the local mag brings a couple of enquiries then you have to think about that. But I would imagine that the vast number of your enquiries come from canvassing and customer recommendations. Some will also come from customer requests who see you out and about. I haven't got any figures but I know that the vast majority of our new enquiries come from customer referrals. These have also been the most loyal customers.

Ian101 was also in the motor trade. On the customer profile form, there was a box to tick when we started to talk to a walk-in. Was it a newspaper advert that brought you in, radio advertising, mailing shot or are you already a customer of ours?

Reg Vardy went through a period where they stopped adverting in the local newspapers as they were trying to identify what sort of an impact it would have on sales. The result was it didn't although that again isn't a forgone conclusion. They stopped sending out mailshots as the take up was far too low to justify the cost.
The most effective was telephone canvassing on previous customers with a well prepared sales pitch - if we could upgrade your current model with newer model with better specs for the same monthly cost, would you be interested?

In our business I believe the same applies. Door knocking yourself is the best way to add customers.

-

[robbo333]

Are you talking about marketing or advertising?
There are lots of definitions as to what marketing or advertising is but keeping it SIMPLE and I mean simple...
Marketing is: your business from your CUSTOMERS point of view.
So let's start at the beginning, how do you answer your phone, are you polite etc? How do you provide a quote, is it verbal or written? When you turn up is your van sign written, do you wear some sort of uniform, are you shaven and well presented? When you've done a first clean do you show the customer round to make sure they are happy with the job? Do you phone or text them next time you are due? All this is marketing. It's your entire business, how your customer sees it.
Advertising: Is the MEANS by which you make known, that which you have to sell, or buy. So advertising can be anything from a postcard in the local shop, to leaflets, posters, adverts in magazines, websites, facebook ads, radio or even canvassing. Advertising is a part of marketing.
When we look to get new business we tend to look at the best ways of advertising. The best way to think about this is 'how can I get the most amount of good customers for the least amount of spend'?
When we look at improving our overall business we tend to look at marketing (which encompasses everything) and many companies will look at doing a SWOT analysis on a regular basis. (Strengths, Weaknesses, Opportunities and Threats) and use those four key areas to look at ways of improving their business.
So our leaflet or website for instance is advertising first and foremost, because we are using it as a way to  'make known' that we are selling our cleaning services. But it's also a marketing tool because of the way it looks and the way our website works, will reflect upon the way a customer will perceive our company.
Anyway, back to your original question, personally I think you are over thinking it. Do the best job you can do for every customer, get rid of the wasters and look at what works best for YOU in getting new business.
Hope that helps.

[Tom White]

Tax man is getting cleverer every day.

I'm related to someone who works for the HM Revenue and Customs in a managerial capacity, who has carried out tax investigations in the past, and I can categorically state that this person is NOT getting cleverer every day.

In fact he's often not very bright at all.

[Clever Forum Name]

I was suggesting the OP was undercover for HMRC.......

[Tom White]

I was suggesting the OP was undercover for HMRC.......

I think you're paranoid. 

[Clever Forum Name]

I'm not lol. Gocardless and CP makes me sleep at night

[Dave Willis]

  The original post sent me to sleep.

[SeanK]

I would be more worried about what type of people the area is attracting, 60% messer rate. (shock)
Just think of the bad mouthing you would be getting after having dumped or fallen out will 600 customers.

[Spruce]

I would be more worried about what type of people the area is attracting, 60% messer rate. (shock)
Just think of the bad mouthing you would be getting after having dumped or fallen out will 600 customers.

That's an interesting perspective and ever so true. Good point SeanK.

[8weekly]

That's over 5 years though.  When you are growing and picking up new customers, there will be a hell of a lot that don't last a year. 20-25% I'd guess.  Price is a factor too. If it's a fiver, it's a non decision, but if it's £20 it is looked at more carefully I think.

[Ian101]

In reply to the change of title ..........................

im higher .... my next George number is 980 but 2 months ago my round size was 260 ish so about 75%.

sounds appalling but prob lost about 30% over the last 6 years  due to being bad customers - for all the usual reasons
other "losses" due to constant refining - better paying work - selling work that didn't match my best work so end result now earning more with a lot fewer than I was with a higher number of customers.

by end of November I expect to have sold off the rest of my residential work so will be totally out of the residential window cleaning business and just doing commercial windows and large external building cleaning jobs - been getting things in place for last 3 months to enable this such as IPAF training - CSCS card, Rooftop safety training etc etc.