In an industry like the hardwood lumber industry, relationships are key. Yes, there are times when a single one-time sale to a new customer takes place, but in most cases, relationship selling is what we do. So, for us, it is important to be focused on growing repeat business with our customer and considering the “lifetime customer value” (LCV) we’ll have for years to come.
Why is LCV and customer retention so important? As CleverTap notes, the costs of new customer acquisition is up to 25 times “more expensive than retaining an existing customer,” and that existing customers “spend 67% more on average than new customers.”
If you are also focused on lifetime customer value maybe you will find some of these key focus areas helpful.
Emphasize outcome, rather than features. Do customers receive more value when doing business with you than with one of your competitors? What generally drives customer interest is “the perception that purchasing your products will see outcomes related to higher efficiency, future sales of their own products or services, and a greater perceived value of their products to customers.”
Provide high-quality customer support. Customers begin to see lifelong value when they see how relatively easy it is to use your product or service. Invest in being a customer service leader in your industry. And remember it is important to also maintain a high level of employee engagement in your company. Happier employees can lead to happier outcomes with customers!
Share industry updates and information. Be a resource! When you offer insights either into a better use for your product or service, or about the industry in general, you’re providing a unique service to customers. This becomes especially meaningful when the news and information you offer helps their businesses become more efficient and profitable.
Connect customers with others in your network. It’s likely you know of businesses that might benefit from products or services your own customers provide. Why not make the effort to connect them? It’s another way to demonstrate your value as a trusted supplier and business resource that, in the customer’s eyes, “is always looking out for me.”
These techniques seem to work for us. Whether it is with a forester and a landowner or a lumber trader and a hardwood distributer, focusing on developing strong relationships and using proven customer retention practices helps us succeed. What other things work for you?
Tony Cimorelli
Baillie Lumber