After Sales Care

Marketing is about selling goods that don't come back to people who do!
Ask any successful business and you will be told that the bulk of sales are to existing customers. The concept of Lifetime Customer Value (LCV) is very important here. Unless buying an urn for his/her own ashes, the chances are that whatever you are selling, the customer will need to buy again in the future. If it's bread, the customer will be back for more tomorrow. If it's a car, the customer will be back within a couple of years. The question is, will the customer come back to you - or to your competitor? The answer depends on his purchasing experience with you and the after care service you provide where appropriate, but it also depends on his/her memory (customers have notoriously poor memories except when it comes to remembering bad experiences they have had), so you need to jog their memories a little.

This is why it's important. In a life, the average driver may buy ten cars. If you sell a young man his first car and if you make an average profit of $2,000 on each car sold, the LCV of that customer is potentially $20,000 (I'm avoiding complications of inflation, model changes etc. - let's keep things simple to make the point). But if he never comes back to you, someone else will be getting most of that value. Now, (still avoiding the many variables that can occur - keep in mind that this is an argument of principle rather than a scientific one), studies have shown that people will generally tell a few others about a very positive purchasing experience, but they will tell many more about a negative purchasing experience. A car buyer who's had an unhappy time dealing with you because of delays, commitments unfulfilled, poor after sales service etc. may tell 20 other people about it and put them right off dealing with you. Their combined LCV is 20*$20,000 = $400,000. Okay, some of them might never have come near you anyway, but they in turn will bad mouth you to others who might have come so don't quibble too much with the numbers. When you lose a customer due to a poor service you lose a lot more than his/her next transaction. You can argue with the figures but not with the logic!

A car buyer who has had a happy time in buying from you may tell 8 other people about it. He has become a member of your salesforce and a very powerful one because unsolicited referrals from people who have nothing to gain by speaking well of you are much more convincing than all the advertising you can buy. The LCV of the 8 people is 8*$20,000 = $160,000. So, when you do a really good job for your customer you stand to gain much more than the value of his/her next transaction. Again, you can quibble with the multipliers I've used (and they vary from product to product and from community to community) but not with the logic.

In the above example the potential LCV of that initial customer (if you treat him well) could be as high as $580,000 (his own $20,000, plus the $160,000 he turns on and the $400,000 he does not turn off!). Sure it's a game and your accountant won't accept these figures in your sales projections, but it's a very instructive game and should make you think twice about after sales service - whatever you sell - and you should appreciate that looking after your existing customers is at least as important as looking for new ones.

You might say why talk about this Lifetime Customer Value idea on the page about after sales service rather than on, say, a page about producing a quality product? The reason is simple. First, you do need to have a quality product but that should be a given. Customers expect that as a minimum. What they don't expect, and what they are used to not getting, is excellent after sales service. We have all been at the receiving end of the sales spiel that promises the sun and moon and, once the transaction is concluded, you're suddenly just a nuisance - particularly if there's something you want fixed. They are too busy on their immediate next sale to someone else to have time to worry about their future next sale to you! Short-term thinking.

Customers will be impressed to the point of shock if, having bought your software package (or whatever!), they get a phone call (or an e-mail) after a month and again after 6 and after 12 months asking if everything is going well and if any little problems have cropped up that you could help them with. Wow, never seen service like it. I'll definitely go back there again - and I'll tell my friends!

It does not even have to take any effort. An autoresponder with personalisation can automate the whole thing if you set it up properly.

A little psychological point. Have you ever noticed that when someone does something for you that makes you feel important, you're much more likely to talk about it than if he/she does something that makes you feel unimportant? Keep it in mind!

Because of the relative newness of e-commerce, people talk about purchases they've made online much more than they do about purchases they have made through other more traditional channels. If you book your vacation through a travel agent, you don't mention it. But if you found a great deal on flight and hotel (rental car all part of the deal!) on the internet - that makes you clever, and you tell a lot of people about it. That's just a fact, so when people talk about the purchase they made from you, what do you want them to be saying?