How many times have you read an advertisement in a newspaper or magazine and phoned to get details? You leave your name and address and prepare to wait a couple of days. A week later, nothing has arrived. So you call again, another week passes -still no response.
It makes you wonder why you bothered to call in the first place. It also makes you wonder why the company went to such lengths if it was planning on ignoring you.
Winning new clients and new business is a big issue in every industry, especially for small players and recent entrants.
However, among mature and, on the whole, bigger businesses, client retention is the name of the game. This is because, aside from the fact there is a big difference between a “kept” client and a “happy” client, there is an even more significant difference between a new and an existing one – cost.
The Technical Assistance Resource Project for the US Office of Consumer Affairs has revealed that the price of acquiring a new customer is some five times greater than the cost of keeping an existing one. This suggests if you were to improve customer retention levels by 5 per cent, the average value of a customer would be increased by 25 per cent.
To achieve improved customer retention, however, you have to be in a better position to understand and track customer preferences and to monitor how they change over time.
Without this information, identifying what services and products customers want and need and at what price is sheer speculation. Yet, according to research conducted by Deloitte & Touche with Autif in the second half of 2000, despite the obvious importance of this data having being recognised, few of the investment management companies surveyed felt they had in place sufficiently effective facilities to carry out the task.
Maybe it is at least in part because of this that the same piece of research revealed that e-commerce was the second-greatest strategic concern for participants – that is well up on the 10th place it achieved in 1999 – but then it had not even registered in 1998.
Sophisticated customer relationship management systems may not have been precisely what the respondents had in mind but even systems of a more basic variety would apparently not go amiss.
As part of the survey, participants were asked how swiftly client email should be responded to. Some 93 per cent felt that best practice fell somewhere within a 24-hour period.
However, when put to the test, many fell a long way short of their ideal turn-round.
Of the three communication channels used, email proved to be the least effective in terms of response times, both for the direct client and the IFA.
An Isa application package was requested from a range of companies via the website, using a freefone number and last of all, the lowly coupon. Of those sampled, only 33 per cent of the applications requested using email had been received by day two.
The equivalent figures for off-the-page newspaper coupon requests and freefone telephone enquiries were 79 per cent and 78 per cent respectively.
Most alarming was the fact that 18 per cent of managers failed to provide an Isa application within 12 days to the direct client request. The equivalent figures for off-the-page newspaper coupon requests and freefone enquiries were 7 per cent and 11 per cent respectively.
We gave up waiting after that. The good thing about the advance of technology is that nowadays you can get companies to ignore you via the internet too.
Anne McMeehan is director of communications at Autif