Customer Retention: The Art of the Follow-Up

In today’s business environment, most retail companies have an Internet presence, typically an e-commerce Web site where customers can buy products online and obtain some degree of customer service. In fact, the distinction between pure-play e-commerce companies and traditional brick-and-mortar companies that use e-commerce as a retail channel no longer exists, in practical terms.

“Today, I am not clear that even companies like eBay or Amazon are ‘e-commerce,'” Yankee Group senior analyst Art Schoeller told the E-Commerce Times. “Amazon does have warehouses [and] call centers. It ships products,” just as traditional companies have done for years.

Considering the ubiquity of e-commerce, however, few companies seem to understand how to walk the fine line between enticing customers to become repeat buyers and annoying them with incessant marketing messages. In other words, few have mastered the art of the follow-up.

What do companies need to keep in mind as they perform this delicate balancing act?

Defining Follow-Up

To provide good follow-up, companies need to understand two key business principles: “deliver[ing] what you promise and then promis[ing] what else you can deliver,” Erin Kinikin, vice president and research director at Forrester Research, told CRM Buyer.

“In terms of delivering what you promise, the best overall definition of follow-up is ‘once and done.’ That means that the customer has to ask just one time, and that all the subsequent internal tasks that have to be done behind the scenes are invisible to the customer,” Kinikin said.

“Then you can promise what else you can deliver,” she added. “That means providing new offers in the context of what the customer wants. If I’ve been to a Lyle Lovett concert, an offer for heavy metal tickets is probably not going to fly.”

In addition, Kinikin warned, “Too many companies try to get the customer to buy something else before they’ve made sure that the customer is satisfied with what they already have.”

Managing the Process

For his part, Schoeller said certain business process rules need to be followed when managing the follow-up process.

As he explained it, the rules that determine follow-up methods take both the customer and the transaction into account. To arrive at the correct conclusion, e-businesses must segment their customers by demographics and by their customers’ desire for follow-up, in terms of type and frequency.

As they monitor and measure the success of each follow-up interaction, e-businesses then need to continually refine the customer retention process, taking action on whatever gaps exist between intent and results.

“Customer segment, customer preference and transaction type should rule how the follow-up is managed,” he said, noting that the primary “don’t” in the customer retention space is taking a one-size-fits-all approach with customers.

Preventing Follow-Up

In terms of customer service rather than repeat purchases, the issue of follow-up may be viewed a bit differently. In fact, Denis Pombriant, managing principal at Beagle Research Group and longtime CRM industry analyst, told CRM Buyer that a company’s primary goal should be preventing follow-up by solving customer problems on the first try.

He cited Proficient Systems as a company that provides technology supporting this concept. “Proficient knows that there is never a better time to help a customer than when they are on your e-commerce or support site,” Pombriant said. “They also understand that the customer on your site now was most likely on a competitor’s site four minutes ago and that customer might be elsewhere in two minutes.”

Overall, Pombriant noted, a healthy proportion of visitors to any site need either sales or support assistance. If an e-commerce company can identify customers whose probable lifetime value may be significant, it behooves the company to reach out to those customers via chat and co-browsing, two technologies that, used appropriately, can lead to more sales and fewer second support calls.

Dos and Don’ts

Overall, Kinikin listed several follow-up “dos,” including sending the customer immediate acknowledgement of his or her request; sending periodic status messages, which she likened to a “package tracker on steroids”; watching for critical customer events, such as a move or a change in life circumstances, which could provide an opportunity to suggest new products or services; and offering good opt-out facilities.

“There’s nothing worse than telling a company you’re not interested and being ignored,” Kinikin said.

Likewise, Kinikin said, “Don’t make the customer guess about whether you’re working on their request. A daily update is appropriate. And don’t redirect customers back to the phone for simple requests.

“Customers will tell you when you’re rude,” she added. “The best companies monitor customer letters and complaints, as well as opt-outs, very closely to understand what customers like and dislike.”

As she noted, “The customers decide, and the company just has to be able to react quickly and appropriately — and never make the same mistake twice!”

Some Masters

Kinikin went on to cite some companies that she thinks have mastered the art of the follow-up.

“Nordstrom includes a prepaid return envelope with every e-commerce sale. The customer is always right, even if they buy online,” she said. “Lands’ End responds to e-mail requests immediately, canceling or changing orders and verifying results, with a personal phone number to call if anything needs to be fixed.

“A lot of leaders’ success is a matter of attitude and training,” Kinikin added. “Lands’ End and Nordstrom have good technology, but they have great people trained to deliver great service to the customer.”

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