MarketingProfs' Members Register for B2B Forum 2010 for just $695! (good until 11/30) »

Ask your question ... sign up today! It's FREE!
Customer Behavior   URGENT - Need Help Fast!  
 
This question has been closed, and points have been awarded.
How Can I Change A Client To A Loyal Client?
Posted By: aghaneh* on 12/20/2006 11:53 AM (CST) 250 Points
I am the Marketing Director for a company who underwrites commercial loans. Like most companies, the 80/20 rule applies to our client base (i.e. 80% of our business comes from 20% of our clients). How can I get the other 80% of our clients to move down the purchase funnel from a one-hit-wonder, to a repeat, loyal client? I am looking for contest, event, or incentive ideas that will not interfere with the other 20%. For example, I don’t want to offer a contest to our clients for “most loans closed during the year”, because the top 20% would surely win. I am looking for an incentive to solely drive the other 80% to produce more with us. Any thoughts or ideas are greatly appreciated.

Posted by: Theresa H. Accepted Answer
12/20/2006 12:23 PM (CST)
Why couldn't you offer a contest to only your infrequent/one-time customers? You know who they are and can track them. Just don't include your core business partners or have a separate contest for them. It makes the playing field more even for the newer guys and incentivises them to send you more loans because they know they won't be outdone by your bigger clients. (They will really have a chance.)

Not fully understanding your business, I am assuming that you get paid by clients per loan, or maybe they pay you a % of the loan amount.

With that in mind, how about offering just the one-timers or infrequent users a decrease in your fee based on # of loans they send to you. Make levels:
1-2 loans = full fee
3-10 loans = 2% reduction in fee
10-20 loans = 5% reduction in fee...

Hope this helps.

Theresa
 
Posted by: BARQ Accepted Answer
12/20/2006 12:51 PM (CST)
My guess is that there is a little bit about your company that 80 percent of your customers like, but they like other companies for most of their business. You might get more effective use of your budget by profiling the 20 percent that like you alot, and target more of that profile, rather than squeezing the cherry-pickers.

BARQ
SELMARQ Brands' Best Friend
 
Posted by: NuCoPro Accepted Answer
12/20/2006 12:54 PM (CST)
You should create a survey specifically targeted at the 80% part of your customer base. Generally you want to uncover why they use you; are you a second, third or fourth choice and why. Why they use other service providers. What improvements you could make to have them consider you as their first choice. etc.

Offer them some kind of personal incentive ($20 coupon at Amazon, etc.) to get their participation, and it has to be a web based survey to make it easy and quick.

After you compile the results of the survey, you can create a marketing campaign to convert your occasional buyers into more profitable customers.

Regarding the prior post, I would be VERY careful about offering discounts for three reasons.

1. You may well end up stuck with those "special" rates forever.
2. Its going to create internal administrative headaches keeping track of who gets what.
3. Don't be surprised if your big customers get wind of it and demand similar discounts.
 
Posted by: CarolBlaha Accepted Answer
12/20/2006 12:54 PM (CST)
The 80/20 rule applies also to your sales staff. You may find they are not spending enough time with those inactive clients to develop them.

There is no rule that an incentive or spiff has to be to every client universally. When we do a spiff, we set each company and their salespeople up individually. The accounts doing high volume have a different spiff than those inactive accounts. Another way is to base the incentive of increase over last year loans. That gives the guys in an area with a smaller customer base to compete with those in a more hopping area. We also tie the incentive to dollars straight to the salesperson's pocket. Owners that sell can sign up, but its really designed for the salespeople to benefit-- those are who you want to win. Our sales staff must go to each location and get each person individually registered prior for acceptance in the spiff. This gives salespeople a good talking point.

Another incentive we have done is break the spiff into cash for the rep and advertising coop $ for the owner.

But no incentive is worth a darn if you don't get your support staff out there selling to those inactive accounts.

Good Luck, Carol
Sell Well and Prosper tm
[URL deleted by staff]
 
Posted by: Marketing-Riot Accepted Answer
12/20/2006 1:53 PM (CST)
go after their base business and build from there

I imagine they are going to their "banker" for the loan - the place they do everything you know, checking, savings, trusts and loans

Also, check out CitiFinancial with all their little pod networks - offices in every community...pushing the local thing...PrimAmerica is another to research going after middle america...
 
Posted by: Marketing-Riot Accepted Answer
12/20/2006 2:01 PM (CST)
Their CPAs also help with funding sources
 
Posted by: michael Accepted Answer
12/20/2006 3:25 PM (CST)
First, be certain of the reason they are "disloyal". It may be that they don't write the kind of loans that fit into what they would consider your expertise.

Best way to do that is ASK. You'll need a appropriate incentive to get them to open up but it doesn't have to be expensive. Avoid logo'd promo items.

You know your industry. Likely they don't discuss information between competitors. (We have a client where this is a common practice and it causes lots of trouble...basically forcing the company to pay for business they're already getting)

You may find someone is not a good target customer but an excellent referral customer. Keep the relationships open.

Michael
 
Posted by: aghaneh* Author Response
12/20/2006 5:08 PM (CST)
Thank you everyone for your intuitive suggestions so far. I will keep the question open for one more day before closing.

 
Posted by: telemoxie Accepted Answer
12/20/2006 7:16 PM (CST)
I'm assuming that you are selling your loans thru banks or agents rather than directly to corporations, is that correct?

Let's assume that the 80/20 rule holds. If you have 100 prospects, then you know who the top 20% are, they have given you most of your business.

But 20% of your potential business is represented by the "bottom" 80%. The good news is, applying the 80/20 rule again, 80% of the business remaining, or 16% overall, is clustered in the top 20% of the "bottom 80%".

How can you identify these? One way would be to build a demographic model (company size, revenue, etc.) and look for trends. See if you can find companies in the "bottom 20%" who seem to be similar to your best performers. Now you have A (top 20%) , B (next 16%), and C companies. Focus your "change client to loyal client" campaign on the B companies. As you learn more, move companies from the B pile to the C pile and vice versa.

Regarding incentives, again, it would be good to know if you are selling directly or indirectly. If you are selling indirectly, you could have a contest for most sales, to keep your top performers happy, but also a contest for greatest percentage increase in sales, which will help you identify and reward your best "B" prospects/partners.

Of course, a simpler and better approach (if you have a large enought group of prospects) is to build your profile of your "A" customers, and keep identifying prospects who fit that model, and advertising to them.
 
Posted by: Melvin @ Volcanic Accepted Answer
12/20/2006 7:45 PM (CST)
I'm actually interviewing marketing executives and business owners (for at least 5+ yrs) to find out what they find to be the best ways of building loyalty.

Here were my thoughts before starting the research:

- Impress customers so they tell everyone. When people tell others about you, they become a part of your company. Can you imagine telling your friends about to drink Coke and then drinking Pepsi. You wouldn't be caught dead drinking Pepsi because it's now inconsistent with who you are. In psychological babel, this is called cognitive dissonance.

- Keep in touch. How does that saying go? "Out of sight... out of mind." And there is another one. I believe it was Woody Allen who said "80% of success is just showing up." The same goes for loyalty. Simply keeping in touch is 80% of the battle. Put together an annual client communication and contact plan (CP). Divide clients into groups and create a plan for each group.

- Manage expectations well. Don't promise a world tour and deliver a trip to Fiji. Promise a trip to Fiji (which is awesome) and deliver a world tour. By the way, I'm from Fiji and if anyone is interested in going, you definitely should. It's absolutely fabulous.

After I conclude my interview's I'll be putting together a post on my marketing tips blog at: [URL deleted by staff]
Feel free to check it out when it's released... or just subscribe to be notified when it's posted.

Merry Christmas Everyone

~ mel

Melvin Ram
Volcanic Marketing
 
Posted by: Frank Hurtte Accepted Answer
12/21/2006 12:11 PM (CST)
I would recommend that you spend some time and money interviewing the one time customers, and first time customers to gain insight into their view of the experience. What they liked, what they did not like, who took care of them, did they feel connected, etc.

I once found that repeat customers went to the same high quality customer service person - and they loved that person. New customers were sent to the "low man on the totem pole" - often a newbie with limited training, and often a person who did not stay with the company.

We made a few changes, put together teams to better match new customers with the best of our people.

The net results were fantastic growth...
 
Posted by: scovert* Accepted Answer
12/21/2006 2:09 PM (CST)
I agree with some of the others that you need to know why they are one-time customers. You should put your efforts in that instead of contests etc. Today the customer is king more than ever before. Also its all about relationships. There's a reason why your business is 80/20 and its your job to find out the "why."

We are all about helping with customers. Please see [URL deleted by staff] for help in this area.
 
Posted by: aghaneh* Author Response
12/21/2006 4:27 PM (CST)
Thank you everyone for your reponses. I am closing the question.
 


Get more answers ... ReTweet this!

Would you like to post a response?
Welcome to Know-How Exchange!
This is a collaborative community. We welcome everyone's participation.
All you need to do is login. Enter your account info in the box above (top right).
Not a member? Not a problem. Register here (it's FREE and EASY).




Know-How Exchange powered by MarketingProfs


Sponsored Links

Buy a Link Now

Just Released ... Download Today!
Just Released ... Download Today!
Look inside
Included with Premium Membership
User Name:
Password:
Remember Me
Forgot your password?

Top 25 KHE Experts
(Customer Behavior)
Jay Hamilton-Roth (5292)
W.M.M.A. (4678)
ASVP/ChrisB (4550)
mbarber (3824)
mgoodman (3736)
Frank Hurtte (3433)
stevea (3045)
telemoxie (2824)
Peter (henna gaijin) (2307)
Gary Bloomer (2244)
adammjw (2164)
michael (1938)
darcy.moen (1927)
SteveByrneBranding (1907)
billc24 (1857)
jlevin (1855)
CarolBlaha (1588)
thinkmor (1532)
Pepper Blue (1527)
jose04 (1484)
Michele (1398)
Deremiah *CPE (1391)
Carl Crawford (1367)
Puru Gupta (1139)
Phoenix ONE (1135)
Recently Posted Marketing Jobs
Director of Marketing and Communications
Demand Generation Manager
Marketing/Advertising Faculty
Director of Marketing
Market Analyst
Sr. Field Marketing Manager - Business Intell.
Associate Vice President of Marketing and Corporat
Marketing Manager
[more jobs]

Join over 355,000 members ... SIGN UP!

My email address is and I'd like my password to be .

Already a member? Sign In!

My email address is , and my password is .


HACKER SAFE certified sites prevent over 99.9% of hacker crime.