The Old Leaky Bucket

The Old Leaky Bucket

I was asked  the other day from one of my favourite salespeople about retaining clients.

These days they seem to be “leaking a lot lately” he said, and how do you stop the leaks.

Here are a couple of ideas.

Do not stress.

I think that we do stress a little at times on our retention rates, I always like to ask what are the exact numbers of clients that are actually falling off your lists?

I wrote an article called “The Conveyer Belt theory” which talked about living with retention but also doing something about it.

If you are losing around 20% of your clients every year that is actually quite normal, any more than that you have a couple of problems.

1. Selling packagers not solutions.

This one is quite common, media companies under pressure, rates dropping, packages being sold against you. You turn into them, and start selling your product like them. It is short term.  It might work for a while. You have to go deeper into your sales strategy and own a different space.

2. Customer Service.

This is really the road to riches, but usually media companies pay lip service to it. Here is an example of creative thinking, and innovation.   A business partner of mine created a customer service idea out of travel.

He was able to purchase 100 airline tickets at around 50% below the advertised price, and it was to a great destination.

No Strings attached.

He decided to send his top 100 clients a FREE ticket as a thank you for investing with his media company. NO STRINGS ATTACHED, no advertising, no commitments, nothing. Guess what happened, every client was over the moon.

They were so excited to receive a FREE ticket, but could they also take their partner with them, sure he said, I can get a ticket at the advertised price, slightly under, but still a good deal.

What do you reckon happened?

70% or 70 took the extra flight.

Do the math.

Original ticket Price 100@ $299 = $29,900.00 (Giveaway)

Ticket for spouse      70 @$599 =     $41,930.00     (client paid)

The actual cost of the promotion   $9000 (170 x $299 = $50830)

Here is the rub, they took those 100 clients and their partners on the trip and generated hundreds of thousands of advertising dollars beside the pool.

We don’t do that around here.

So, the squealing begins, oh, no, we don’t do that, that wouldn’t work around here, that is a bit clever for us, blah, blah, blah…

I have proposed deals like this to many media companies, and the answer is usually no, and sadly that goes on in hundreds of media companies all over the world.

So, want to stop retention, and then pay a little more attention to your advertisers, for they are ones that pay you, and stop saying it can’t be done.

Good selling

PHOTO – tobias schlitt

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4 Responses to The Old Leaky Bucket

  1. This was the secret to my late father’s and to his brothers’ success. In selling radio, he never opened a ratings book! It was all about ideas and relationships! People trusted him, people believed in him, people respected him, and people loved him. And he worked to earn it! While I was growing up, we would have large advertiser parties where we would cook lamb, serve drinks, and entertain family, friends, and clients. My brother, sisters, and I set-up, served tables, and yes, served a lot of drinks! My father would tell us, “Shake their hands firmly, look them in the eye, smile, laugh, make them laugh, never argue with them, find out what THEY like and talk about THAT subject not what YOU want to talk about, talk to them like you have known them for years even if you just met them. Remember, these people put the food in your mouth and the roof over your head…” I was just telling someone the other day how people he had not seen or spoken to in years, even decades, and people with whom he had only done business once or twice, dropped everything and came to Modesto, California from as far away as New York and Chicago to pay their last respects, in person, when they heard about his passing. You see, Mike Pappas not only new about business, he knew about people, he cared about people, and they cared about him in return! And yes, he took many clients on many trips and sold a lot of business in the bar and by the pool. I miss that man!!!

  2. This is a great example. Mike.
    At the heart of it is a fundamental principle. Hospitality should be used to say ‘Thankyou’ rather than ‘Please’ As a thankyou it is great customer service, as a please it can be interpreted as bribery!

  3. Some excellent points on customer retention here, Mike. In B2B marketing, it is critical to maintain a strong client relationship following success in lead generation. I believe your second point, customer service, is the most effective means of customer retention as repeat business is of a much higher long term value in B2B sales.

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