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Marketing for customer retention Featured

10:57am EDT March 28, 2002

Not all marketing is about acquiring new customers. Marketing efforts and resources should be divided among recruiting new customers, integrating new customers into a positive relationship with the company and retaining existing customers.

Unfortunately, customer retention often gets short shrift in marketing budgets.

A new client told us the company was losing customers faster than it could replace them, and they didn't know why. They told us their products and services got a high satisfaction rating, their customer service people were polite, responsive and friendly, and their pricing was in line with the market.

However, we discovered its billing system was rigid and not at all customer friendly. Invoices were difficult to understand and contained unnecessary and confusing information. After the sale, the monthly invoice was the primary, and in many cases the only, contact between the customer and the company.

Accounts receivable people were not in regular contact with the customer service reps. When customers called with a question about their bill, they were transferred to their salesperson. Salespeople were unable to answer many of the questions and had to check with the billing administrators for answers.

Complaints lodged with a salesperson didn't get through to the billing administrators. The same mistake appeared month after month on the invoice, with past due messages getting progressively more strident. In extreme cases, accounts were being turned over to collection agencies.

We suggested our client review the billing system to make statements easier to understand, train billing administrators in customer service and require them to answer questions without referring customers to their salesperson. The system for recording complaints needed to be interactive, so that any customer service representative or billing administrator could see all comments on a customer's file.

Finally, the company needed to rebuild customers' confidence and change perceptions about the billing experience. We suggested a sweepstakes, announced on the billing envelope, giving away products and services each month, to increase attention to the bills and inserts.

We also suggested they step up the marketing of products and services with inserts and begin a customer referral program on invoices, giving customers credit for new customers successfully referred.

Andrea Fitting is CEO of Fitting Group, a Pittsburgh-based agency that specializes in helping companies transition to deregulated markets.