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How loyal are your customers?
Any strategy that doubles your business is remarkable. But a strategy that
sees your business multiply by 10 times? That's phenomenal.

David Hall, the owner of Sydney's The Clean Plumber, came up with a simple
strategy that did just that. Within six months his business, which was 18
years old, grew from a business of four employees to forty.

His strategy? He changed the business's name, he started giving customers
what they want, and he created a customer loyalty program that keeps the
customers he already has coming back. The whole rethink took him three days
to brainstorm and six months to implement.

What's in a name?

Back in 2002, Hall's business had an image problem. Customers were calling
to complain that his plumbers were dirty and late. "We were typical Sydney
tradesmen. We didn't care when we turned up, we were flannelette-wearing,
dirty tradies. I demanded more from the people I did business with," Hall
says.

Hall sat down with his team and asked a big question: what was it that his
customers actually wanted? Punctuality, respect and cleanliness were
lacking. It was this customer insight that inspired a dramatic shift in the
company: "The Clean Plumber" was born. Months later the local paper
announced the new business name, with David's business offering $30 cash if
his plumbers were late. He also promised customers homes would be left
fragrant and spotless.

It's all about the reward

With 10 times more business after the name change, Hall's confidence in
marketing had paid off. Six years later, he has a list of customer rewards
and direct marketing campaigns longer than most big businesses. Here are a
few:

- he sends letters to customers with The Clean Plumber currency attached.
The 'dollars' can be exchanged for services (for 'wow' factor he uses actual
coins he had minted);
- each plumber leaves a bag of mints behind when they finish a job (so that
the house is left in "mint condition");
- customers who refer their friends are often awarded $50 in cash and a
bunch of flowers personally delivered; and,
- 'Priority Customers' (previous clients) are offered free home plumbing
inspections to ensure minor plumbing problems don't become major
catastrophes.

This innovation is my favourite: because he promises to be on time or do the
job for free, he has bought a motorbike to make sure his employees are never
stuck in traffic jam.

"I don't understand businesses who do a $2000-$3000 job and walk out the
door thinking they're never going to see that customer again. Why not look
at each customer as an opportunity to get repeat jobs?"

"Consider customers not as dollars, but as long term friends," Hall says.

This sounds twee but Hall is spot on. It makes sense to fight to keep the
customers you've already got. So how can you do this? By establishing your
own loyalty and referral scheme that works.

Define your objectives

For Hall, the first step was to decide what he wanted to achieve. He wanted
to retain customers and encourage customer referrals. You might decide to
focus on retaining the most profitable customers.

What motivates your customer?

Customer motivations vary enormously. Try to drill down to what motivates
the customers you are trying to influence. Hall, for example, has figured
out that a great freebie is cleaning the gutters for free (he's got
apprentices at each job, why not put them to work?!). It may be that you
also have something in your business that is easy to offer, but of high
value to your customers - an express service for repeat customers? A $3
latte for the client you're about to charge $90 for a haircut?

Use customer insights

Any loyalty scheme represents an opportunity to create a huge database of
customer information. Woolworths Rewards makes their customers register
online - this data will presumably be used to collate buying patterns and
allow for more targeted marketing. Collect as much information about your
customers so you can tailor your rewards and your products and services.

Knowing why your customers came to you in the first place - or why they're
considering leaving you - might change your business model for the better.


Posted by Kristen Le Mesurier
July 21, 2008 9:15 AM
How loyal are your customers?
Any strategy that doubles your business is remarkable. But a strategy that
sees your business multiply by 10 times? That's phenomenal. David Hall, the
owner of Sydney's The Clean Plumber, came up with a simple strategy that did
just that. Within six mont... more
 

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I adhere to many of the same beliefs.They didn't say what his old name was though,un-less I missed it.I feel he is way over-board on the 50.00 and the flowers but obviously he is making it up somewhere and it looks to be in shear volume,though I am not against giving a finders fee or bump to a customer who has passed on to me a great lead.
 
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