Re: UKNM: Customer retention

[Terry Kendrick]

At 13:22 15/09/2000 +0100, you wrote:

>Date: Thu, 14 Sep 2000 15:21:01 +0100

>

From: Ben Thompson <benbabyhippo [dot] com>

>Subject: UKNM: Customer retention

>

>A question based on something we're working on (its finished and ready to

>run, we're crossing t's and dotting i's on legal stuff) and two articles

>this week (one saying only 500,000 people in the UK have bought goods

>online, the other announcing Amazon.co.uk's 2millionth customer).

>

>Anyway, ignoring the obvious weekly emails last minute, QXL et al send out

>are many firms actually focussing on retaining their customers? We

>continually hear of viral marketing and refer a friend schemes that

>encourage new customers to "appear" but are many firms following the advice

>in the post offices adverts on trying to retain the customers they already

>have.  If so any ideas where to look for figures or why firms aren't doing

>it?

>

>Thanks in advance,

>

>Ben


Ben,  firms are OBSESSED with it.  They are Retaining, CRMing, 1to1ing and

exchanging body fluids with their customers.  Some read all the marketing

hype and then desperately retain anything they've sent an invoice to.


I've seen them quote all the theory and then assume it applies to

them.  They have strategic intent to retain 80% of their customers because

they've been told it takes five to fifteen times as much effort and money

to get a new customer as it does to retain an existing customer.  They

sometimes don't check to see if they have a profitable customer base to

start with... and then they sheep-like spend lots of money to retain

these  existing customers when they aren't profitable now and are

inherently non-profitable.   Sometimes you have to chuck your customers and

get new ones.


There is a great feeding frenzy going on at the moment in this area.  If

you want to learn more,  email me off list and I'll send you a list of

about twenty good CRM sites where you can go blind and loopy trying to keep

up.    The theory is good and it has worked for many companies, but

beware.  Get into this and you are joining a religion, you will lose all

understanding of the meaning of words such as "loyalty" and "peace of mind".


Terry

Clearly bored in his lunchbreak.



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