A little more than a year ago, Draperies & Window Coverings reported the results of its millennium marketing survey—asking home fashion retailers, managers and designers/decorators about retail advertising. (See D&WC, December 1998.). One of the conclusions: retailers rely on satisfied customers to do most of their advertising. The survey indicated that one of the two best sources for custom and in-home window fashions leads is satisfied customers and the word-of-mouth advertising they provide for free.
What does this mean to you? First, if you're not already doing so, it's important to pay attention to your existing customers to encourage them to spread some good word-of-mouth comments about you. Second, community involvement can be a key tool in your prospecting efforts.
Part of taking advantage of your satisfied customers to create additional business involves encouraging them to refer others. Another part is working hard to gain future business from these same customers.
Small businesses that grow through advertising alone tend to have smaller clients with smaller budgets, while those who expand their businesses through personal referrals have larger clients with larger budgets, and customers who are less focused on price. Potential buyers you learn about from your own satisfied customers are "warm" and friendly leads, not the "cold" leads you get from newspaper advertising or direct mail.
All too often, cold leads are attracted by the hope of deep discounts or low prices. Prospects that are referred by your customers, warm leads, are attracted to you because they feel they know you because a friend or family member spoke highly of your skills. These prospects are far less likely to buy on the basis of price alone, but rather because of a relationship—which also includes expertise, personality, design skills, installation expertise, quality and follow-up.
Most consumers would rather do business with someone they have a reason to trust and believe in who has been recommended by a person they know than with a total stranger, especially in this business where, chances are, you will be invited into their homes. Best of all, growing your business through referrals from your satisfied customers is a relatively inexpensive way of promoting your business.
FIRST, CREATE SATISFIED CUSTOMERS
It's important to recognize that referrals and add-on business from satisfied customers do not just happen like magic. They require a bit of planning, and you must "prime the pump." The first step is to make sure you create satisfied customers—and do not leave behind unhappy customers. A general rule of business states, "A satisfied customer tells three people within the first month after the sale, while a dissatisfied customer tells seven people about you during the first week."
The lesson: make your customers feel ecstatic about your products and service. Always provide the best quality and service, and if something goes wrong, fix it quickly. Rather than insisting on being right, be smart in terms of the long-term impact of dissatisfied customers on your business.
When a problem does occur, research shows that 95 percent of customers would do business again with a company if they straighten out the problem quickly and effectively. Sometimes, engineering a quick and effective fix can provide even better publicity for you and your problem-solving skills than if the project went right from day one.
Once you've created satisfied customers, how can you encourage them to purchase from you again? Most important, keep them informed about what's new with your business and your desire to work with them again. Maintain a database of existing customers, then send them mail about new products, sales and promotions, and additions and expansions to your business.
It's best if you keep track of subjective characteristics of your customer base, in addition to contact information. For example, if you remember your customers' home styles, design preferences, color likes and dislikes, rooms they plan to redo soon, and personal information (hobbies, children's names), you can communicate with them with truly personalized information six months or a year after their initial sale. Give them a call or send them a note to let them know when you have a new product that you think they especially would be interested in.
Most customers like to be asked for their business. They like to know you truly are interested in having them as a customer and that you don't take their business for granted.
Let customers know you are thinking about them with periodic newsletters, too-advising them how to solve design problems and reminding them that you are still available to help them decorate their homes.
Let them know when you have a new product that solves their window covering problems. Inform them about an upcoming sale. Make them a special offer as a Preferred Customer to buy now and experience special savings. Another way to keep in touch is to present consumer seminars or host an open house to help customers learn more about new products, design trends and your problem-solving skills. Invite your existing customers—and encourage them to bring friends and family.
INVITE CUSTOMERS TO REFER OTHERS
When you send thank-you notes and gifts to your customers, let them know that the way you get most of your new business is through referrals from satisfied customers like them. Unless they are small business people themselves, they probably don't realize that their good words about you are important to your future business success.
The simple act of informing them about the importance of referrals is a big step in making them aware of your business promotion methods and in encouraging them to talk about you to their friends, family or business colleagues who may need your services.
In your thank-you notes, provide an incentive for customers to refer a new potential buyer. The referral incentive can be a discount on their next order, a small gift or a gift certificate. In all your follow-up communications to existing customers—such as newsletters, postcards and reminders about a new product introduction or a special sale—always remind them how much you appreciate their referrals.
When your customers do refer a new prospect, thank them for their efforts. You can express your appreciation through a personal phone call, a note or a small gift. As an example, when a client refers a new patient, a chiropractor friend of mine sends a thank-you note with a coupon good for two movie admissions at a local theater and a free bag of popcorn.
Another nice gift—and one that expands your reach even further—is a flower arrangement or plant delivered to your customer's workplace. We all know what happens when an employee receives flowers at the office: all his or her coworkers come by asking, "Who sent the flowers?" What better opportunity is there to increase visibility for your business from a whole new group of potential customers?
TAKE EFFECTIVE ACTION
Another important way to "take advantage" of your customers is to learn how to act on their referral cues more effectively. Often we are hesitant to be perceived as pushy when someone mentions the possibility of a future purchase by a friend or family member. However, there are gentle ways to act on referral cues without being overbearing or obnoxious.
If an existing customer says, "I have a friend who is redoing her living room," take the initiative to follow up on the signal right away. You can ask, "Is it OK if I give her a call?" or "Can I give you my card, so she can call me at her convenience?" or "Could I have her address to send out a brochure?"
You also can take advantage of your existing customers by asking them to write testimonials about their experience of working with you, and asking them if you can take photographs of their new interior look for your portfolio.
The satisfied customers you create are one of the most important assets to the future success of your business. Make sure you take advantage of this asset to gain additional business from your existing customers and referrals to their friends, family and business colleagues. It's a smart business move and a method our survey says is a most popular way of advertising.
Kay Pegram is founder of Kaymar Communications, a Playa del Ray, CA-based independent marketing services firm for companies in window fashions and other industries. Pegram's previous window coverings industry experience includes serving eight years at LouverDrape and as director of marketing for the Tempo companies.