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Lite Paper, by Japhet Berlin, MyHomeAssets! Software
It costs money to obtain customers
It costs you plenty to get a new customer: yellow pages, search engine and paid advertisements, flyers, paper and other media—yet businesses leave money on the table by ignoring existing customers.
It costs less money to retain existing customers
Studies show it takes seven to ten times more money to obtain new customers as it does to get more money from the customers they have.
Insurance firms are among the most guilty
Often, the only time you hear from an insurance agent is when you get a bill from the insurance company with their name on it. That’s not a very smart way to build loyalty.
Mortgage companies can make more money
Mortgage brokers can gain in two areas: 1) offering a prospective customer some valuable tool to make their mortgage loan process more productive and fruitful, and 2) ensuring you get the client funded by not overlooking the value of their personal assets as it is entered into a 1003 form.
Both businesses curb customer loss by doing something important for your customers
Customers have a lot of loyalty toward people who give them something valuable, for free! I still remember businesses who gave me things as a kid: Lincoln Bank (no longer in business, but they gave me a bank shaped like the bust of Abe Lincoln). What about Cracker Jacks or your favorite cereals? I still remember some of the neat stuff they gave out: secret decoder rings and the like--the postal service seemed a lot slower when you were a kid. As an adult, I know who gave me my favorite pen, my mouse pad, etc. There’s a reason why these things work. A local realtor, for which I have little use at the moment, routinely leaves scratch pads at my door. While I have friends that are realtors, I’m likely to buy from her because I get the feeling she knows my area—and me—better than anyone else. While I also know other insurance firms (certainly we all know AIG, Geico, esurance, etc. from their advertising), I’ll stick with someone who cares about me, even if it costs me a little more money.
Customers will be loyal
Insurance and mortgage firms are the most notorious for ignoring their customers. Insurance customers usually get nothing but a bill from the insurance company with their agent’s name on it. Mortgage brokers are in hot competition, but have little to offer a prospective customer.
These are active or easily obtainable customers. Customers you can do business with in the future, and make even more money with. But you can’t do it without a program to ensure they stay with your firm.
It doesn’t cost much to implement a program for customer retention or prospective customer retention, and the financial impact can be tremendous because research shows it takes seven to ten times more money to get a customer than to retain one.
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