Building Customer Loyalty
Building customer loyalty is key to building a successful electrical contracting business. Electricians can do this by exceeding expectations, creating a perception of value, and listening to their customers.
By: Kevin Orfield
Issue Date: April 2008
Eighty percent of your business typically comes from 20 percent of your customers. Lose a few big customers and your business will get into trouble quickly. Important as it is to attract new customers, it costs five or six times more to get a new customer than to keep an existing one.
Successful electrical contractors understand the importance of building customer loyalty and maintaining a steady customer base.
Exceed Customer Expectations
Many electrical contractors focus on price competition instead of thinking of ways they can exceed customer expectations. But many customers are not primarily driven by price and will pay a small premium for exceptional service.
According to Paul Timm, Ph.D., Orem, Utah-based author of Customer Service: Career Success through Customer Loyalty, the number one turnoff for customers is inappropriately slow service. “Contractors have a reputation for not appreciating people’s time,” he says. “For example, showing up late for jobs or taking longer than expected. This might be an undeserved reputation, but delivering timely service represents a significant opportunity for electrical contractors to earn customer loyalty.”
Instead of telling a customer you will be there at 11 a.m. and then showing up at 1 p.m., give them a time and show up ten minutes early. Instead of telling a customer a job will take four hours and it actually takes five, tell them the job will take six hours and finish it early. “Setting a time deadline and beating it is an incredibly powerful way to exceed expectations,” says Timm.
Create a Perception of Value
Customers who don’t believe they are getting a good value in relation to cost won’t stick around for long. A powerful way electrical contractors can increase perception of value is to unconditionally guarantee work, no questions asked.
Another way to enhance value is to provide information to a customer on how to derive maximum value from the product or make it easier to use. “I bought a new car recently and the salesman took me around the car to show me how everything worked, from the tire jack to the stereo,” says Timm. “My expectation was to go home and read the manual. I was very impressed that the car manufacturer exceeded this expectation, and it took only a few minutes.”
Similarly, an electrical contractor installing a home entertainment system could spend time teaching the customer how to use the system or provide written instructions to the customer.
Do the Little Things Right
Making a customer feel comfortable helps build loyalty. Simple things like smiling, introducing yourself and calling a customer by name go a long way toward earning a customer’s confidence and repeat business.
Take a little time to get to know your customer, ask them about their family and engage in the occasional friendly small talk. And don’t neglect your appearance, as your customers will judge you by nonverbal cues as well as verbal. Look sharp and you’ll convey a sense of professionalism.
Show Your Appreciation
Take the time to surprise your customers and give them something unexpected. Show your appreciation with a small token such as a thank-you card, gift card or fruit basket. Even taking the time to write, “I enjoyed working with you” on the invoice will make your customers feel good about doing business with you.
Listen to Your Customers
Timely response to customer feedback and complaints can solidify customer loyalty. Conversely, ignoring complaints is a surefire way to lose business.
Successful electrical contractors actively seek customer feedback and immediately address customer complaints. If you handle your customers’ complaints well, they are very likely to do business with your company again. In fact, they are even more likely to remain loyal than a customer who never had a problem.
Make it easy for your customers to give you feedback. The easiest and most effective way is to simply ask how you did on the spot when the job is complete. Following up is key-always strive to quickly address any complaints.