WHAT defines a client, as opposed to a customer? Author and IT expert Joel Scott has written widely on the subject of client relations. Scott runs Computer Control Corporation, a company that helps business establish and sustain client relationships through the power of customer relationship management (CRM) technology.
“You need to distinguish between customers and clients,” says Scott. “Customers are not good enough. McDonald’s has customers. A client is a company or a person with whom you have a relationship; the client knows who you are and you know who they are. A customer is a company or a person who’s somehow drawn to your company, buys something and then leaves without a trace.”
Why have customers when you can have clients?
Some businesses have customers when they could easily have clients, says Scott. To illustrate the point, he highlights the fate of two shops in his neighbourhood of Newton, Massachusetts.
“When our consulting business was very young, we had a small office on a busy road. Across the street was a Subway shop. I always believed Subway franchises had the same retention model as McDonalds – in that they have no idea who we [its customers] are, and just relied on huge advertising and marketing spends. But I was wrong.
“This particular Subway was owned by a young guy named Rob. If Rob knew your name he’d always smile and use it, and if he didn’t know your name he made absolutely sure to find out what it was.
Every business needs a client retention system
“Rob didn’t have a database, but he certainly had a good memory. One day, I ordered a sandwich and a cookie but forgot to take the cookie. Fifteen minutes later Rob was standing in my office, not just with my cookie, but also with a plate of cookies for the whole company. This is client retention at its best. Rob not only made a loyal client out of a customer, but also convinced everyone in our company to eat at his place almost every day.”
The moral? “If you don’t have the budget for expensive above the line advertising, you may want to consider a more efficient model for growing your business.”
Another of Scott’s favourite stores – a second-hand bookshop – fared less well.
“This was the kind of store where you could buy a used paperback for half its original price, and when you were done reading it you could sell it back for a quarter of its original price. Most businesses would kill for a return like that, but one of the problems with this business was it depended upon high volume to meet its fixed costs.
“I was in this store twice a week, every week for years. The owner was a very nice woman who cared about her store and about satisfying her customers. But never in all those years did she ask my name.
Why databases are key to client retention
“Neither did she have a database, so she couldn’t send me a postcard to tell me my favourite author would be in the store for a reading, or run special promotions for prize customers, like me. Nor could she email me reminding me of my wife’s birthday and that several more Danielle Steele books were available.
“Sadly, the store recently went belly up, but I believe it would still be there today had the owner been savvy enough to use some relatively easy technology.”
The moral? “The point is you needn’t be big or sophisticated to turn customers into clients. You just need a system.”
Related posts
Proven client retention strategies
Spinning a web of client influence
Client retention the key to growth
How to calculate Client retention
How to segment client retention data
Turning customers into clients
Turning customers into clients
30 Jul 2009
Planet Client is the only online editorial resource dedicated to giving small to medium sized enterprises a deeper understanding of how to win clients, retain clients and understand clients.
Client & Customer Content (What’s this?)
