On the high street – be it the virtual or physical version – customer loyalty is hard won. The big retailers pump great piles of cash into customer retention strategies because they know that the consumer has evolved into a fickle animal.
Where once customers might have only bought from one brand – and have defined themselves by that brand – or felt an allegiance to one store and the people in it, today the market has fragmented to the extent that ‘shopping around’ is now the norm.
Has this more canny approach to purchasing found its way into the print market, too? Well, Matthew Peacock, director at consultancy Active PPP, says the need to retain customers is nothing new, but it has got more complex.
“It is an old sales adage that it is much cheaper to retain an existing customer than find new ones, so in all cases I would expect printers to make an effort to encourage repeat business,” he says.
Nick Devine, The Print Coach, explains further: “There are in fact four levels of customer loyalty, not just one as most people assume.
“First, you have unhappy clients who will leave you. All companies have these if they have a busy operation, it is unavoidable. However, you cannot afford to have any of your tier-one customers in this group – ie the top 20 per cent of your business. Secondly, you have the happy but not loyal. These are the clients that most people assume are loyal. They may return to you on a regular basis, but they are equally open to competitive bids from alternative suppliers. They like you, but they don’t love you.
"For most printers this is where the majority of their customers currently sit. Then you have loyal customers. These are the companies who keep buying from you and don’t take calls from competitors. Finally you have the advocates. These people love what you do and pay premium prices because they value you. They will promote you behind your back, give you great referrals and compelling case studies.
“Your mission is to get your tier-one customers from the second level to the fourth level of customer loyalty.”
That is easier said than done – retention is not an exact science. Whether it be loyalty cards, repeat customer benefits, persistent low pricing or great customer service, or none or all of these, working out what is right for your business – and what will work consistently – is difficult.
“The way printers look to retain customers should depend upon the nature of their business,” says Peacock.
“A traditional craft printer may rely on personal service between customer and printer. In contrast, a highly automated web-to-print business producing personalised greeting cards will minimise human-to-human interactions and may include automated repeat-business discounts in the pricing system.”
Traditionally, the print industry loyalty strategy has been good products at good prices in good time. And occasionally a good jolly for the really important clients.
To some degree, that basic approach is still valid, some printers have not needed to offer loyalty schemes or discounts on repeat work. Mostly because of the way they operate in being open and honest with their customers and they know this.”
Is that enough today? Some customers will go to competitors chasing lower prices
No matter what sales business you are in, ‘free assistance’ is increasingly important to customer loyalty. UK d-epartment store John Lewis is a prime example. Its very successful business model is to not just provide a product but to provide an advice service for that product too. People go back to buy things at John Lewis as a result. Print’s increasing adoption of a much more rigorous and broad customer service offering is moving towards performing the same trick. The GI Solutions approach is a prime example.
“Our customer loyalty is built on putting customers first and considering their needs when it comes to investments and improvements in products and services. Constantly improving how we support customer communication requirements keeps our customers happy,” says Matt Lawrenson, marketing executive at GI Solutions.
“Also, we provide as much help and support as we can to develop new ideas. For example, offering a free resource showing format ideas and we also run monthly and ad hoc seminars to address training for subjects like direct mail."
It sounds expensive, but as Peacock said, it is not as expensive as having to go to market to try and tempt in new customers. So is there more printers could be doing?
It is useful to look at what the kit manufacturers are doing in this area. As the market for new machines has got ever tougher, those selling equipment to printers are arguably further along the retention strategy road than the printers themselves.
Peter Bray, managing director of Durst, says the shift his company has made is to be more reactive to the customer – not just the customer is always right about a product, but the customer gets to determine what the product actually is.
“During all our engagement, right from the start of a sales process, we play close attention to customer applications so we ensure that our system meets their exact needs,” he says.
“Gone are the days when you did a sale and moved on the next. We closely analyse our customers’ needs with strong back-up service to ensure they can grow their business opportunities. It’s this sort of approach that helps us gain repeat orders.”
Mark Hinder, Konica Minolta’s head of market development, Europe, warns that it is this close attention to customer need, not discounts, that produces loyal customers – so those 15 per cent off vouchers for repeat customers should be scrapped.
“We should not just give away additional discounts,” he advises. “We should consider the true meaning of value, which in turn will deliver loyalty. People recognise that all customers are now used to loyalty schemes, such as those prevalent in the retail industry, to entice customers to continue to purchase from them. But are we not in danger of fuelling the debate that print is just a commodity and that the only choice for customers is getting additional discounts in a loyalty scheme? I believe that loyalty can be earned by focusing on customers’ needs and providing them with value that is delivered in the form of innovation. That, in turn, will create a new wealth of opportunity in itself.”
John Corrall, managing director and founder of inkjet integrator IIJ, agrees: “Customers want us to provide expertise and effort into helping them work out whether a new idea is feasible. Often this means doing a lot of print sample work. Testing to see if we can print what he wants where he wants it at the speed and cost-per-print to make it economic. To me this is a lot more valuable than a discount. Opening up new markets for new business opportunities for our customer has huge value.”
Valued service
While the revelation that massive discounts will not be forthcoming from manufacturers may be disappointing, most printers will appreciate the point made: you don’t want hundreds of loyal customers paying below the print price, you want hundreds paying what the job is worth and sticking around because they value the whole service the printer is offering.
“Gimmicks and even dishonesty can be effective in the short term but not in the long haul. In the end, customers loyalty is gained and retained by honesty, value for money and good service,“ says Peacock.
“Good service” is, however, an ambiguous term. One printer’s good service will look woeful to a different customer. That may well depend on the market the printer is operating in: different sectors have different customer expectations. So how do you know what your customer wants?
“Knowing what adds value for customers is fundamental to business success but I’m constantly surprised how little effort companies make to understand their customers,” says Peacock. “Usually the printer’s understanding is based upon intuition and experience but often includes false assumptions.”
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