One of the most common mistakes pool retailers make is not paying enough attention to new customers. Most pool retailers have an ineffective customer onboarding process, or they have none at all, leaving it to fate. Even the term “customer onboarding” is foreign to many pool retailers.
Customer onboarding is the process of introducing new customers to your company according to a pre-established plan rather than the random experience imagined in my previous post. Here’s why it is important: Research has proven time and time again that customers who are effectively onboarded will stay with the company longer and spend more money. They will also have a substantially higher retention rate, lower cost to serve and higher cross-sell rates. It seems like common sense, but most pool retailers pay little attention to the critical onboarding process for their new customers. By the way, that goes for service companies, too.
The First 90 Days are Key
Research has also shown that the first 90 days in the experience of any new customer — the customer onboarding period — are an especially sensitive period characterized by four important factors:
1. Customers are open to higher levels of interaction
Most new customers come to your store for a reason. Only after your company understands that reason can you have a meaningful follow up. Stephen Covey once said, “Seek first to understand and then to be understood.” And he was right: If you want to interact effectively and influence new customers, you first need to understand them. Timely and relevant communications with your new customer are critical parts of the onboarding process, so take advantage of the customer’s initial openness.
2. They expect to be asked for personal information
The first order is the time to gather email and communication preferences so new customers can receive relevant offers like discounts and other incentives. Remember, this is when they expect to be asked for personal information, so ask for it in a professional manner. But also probe to improve the understanding in item 1.
Most of your new customers are defecting from another company. By interviewing them to find out why they left and came to you and by watching to see how much of their spending you earn and retain, you can learn a great deal about how to improve your new customer retention strategy.
3. They are in “switch mode” and are open to new loyalties
Study the products purchased by new customers during their first purchase event. This always reveals a set of products more likely to drive their second purchase. These products are the candidates for the first promotional offer designed to get the second sale. Getting a second sale from any first-time customer puts them on track to be repeat customers and is a very important objective for your business.
4. They are much more likely to defect before settling in
Keep in mind that new customers are fragile. They have not yet developed sufficient trust in your company or the habit of buying from you on a regular basis. Our research found that 30 to 60 percent of first-time brick-and-mortar customers don’t make it to the second sale. If you take the time to understand your customer, you can determine when to expect their next purchase. The closer they get to this deadline, the more likely a relevant incentive will bring them back.
Your turn
What kind of onboarding process does your company have? Is it working? How do you track and measure onboarding performance? What ideas do you have that you have not implemented? What is getting in the way? What kind of help could you use?
Read the previous post in this series: When Should Your Customer Retention Efforts Start?
