No B.S. Guide to Maximum Referrals and Customer Retention. Dan S. Kennedy

restaurant, financial advisory practice, or software company. Still, he teaches pastors not to take this for granted. If they must convert the person to being an evangelical ambassador, we must do so as well. Presumption or sense of entitlement tied to excellence of goods or services has no place and no power.

      The first Rubicon a person gets across is purchasing. He may have hung around as a prospect for some time, reading your online or offline media, seeing your ads, being aware of and interested in you, receiving offers from you. Or he may have seen your sale of the century ad on Friday, and come in and made a purchase on Saturday. Either way, there is absolutely no assurance he will return again and again. All he did was buy something, and all you did is sell something. A transaction happened. A window of opportunity is created that will close quite quickly. Nothing more happened and nothing more should be presumed to have happened.

      It’s worth noting, hardly any businesses do anything about this. If I wander into a store at the mall and buy something, at best I get my email captured (and I personally don’t use email) and get dumped into a generic email marketing and “constant contact” system. Most of the time, even that minimum isn’t tried. But I can count on one hand the times I’ve gotten an actual, personalized thank-you card in the mail with any sort of bounce-back coupon. It occurred with a jewelry store and a rare book dealer last year. Nobody calls, asks if the thing fits or looked good when I got it home or if the dog likes her bed, etc.

      In short, follow-up to ensure satisfaction sucks. That pet goods store owner believes: Let sleeping or not-sleeping dogs lie. I guess they assume I’ll be back if I liked their shop and if the dog likes her bed.

      You want to be assertive and proactive in moving first-time buyer to customer to committed customer. To be a customer, they merely need to return and develop a habituated pattern of patronage. A good example of this was explained to me by a very clever entrepreneur in the dry cleaning business. His grand opening strategy was to aggressively buy habit. The first offer spread through the neighborhood was: Everything you can carry in here in your arms, bag, or box dry cleaned for $1.00. When they came back to pick up that cleaning, they got a ten-day offer to bring in coats, rugs, bedding, or drapes and get a bagful cleaned for just $5.00. These are irresistible offers. By the time the person picks up the second load, she’s been to this cleaner four times in under 20 days. He says her car then heads for that cleaner automatically if clothes are piled into its back seat. This turns a buyer into a customer by habit.

      The best way to have a committed customer is to have them paid forward or on autocharge, especially if there is pain of disconnect with the autocharge.

      In the 1980s, when I was very involved in the “prepay revolution” in chiropractic, I discovered two very important truths. You need to know that then, and now, most chiropractors charged by the visit, and by the treatment modality, as it was consumed. With prepay, the patient was prescribed a treatment plan like “three visits a week for three weeks, then two a week for four weeks, then one a week for five weeks, totaling 22 treatment sessions times $89.00 equals $1,958.00, plus one spinal decompression traction session a week for the 12 weeks times $240.00; $2,880.00; total $4,838.00” then asked to prepay that with a 5% savings or pay it in two monthly installments, right then, bing, bang, bingo.

      Here are the two truths that revealed themselves. First, the pay-as-they-went patients were miserably noncompliant. They skipped prescribed sessions, postponed at the last minute, didn’t do prescribed exercises at home, and more than half never completed their plans. Second, most did not refer at all or were only milked of one or two referrals early, if the office had a very aggressive approach—like a new patient class requiring “bring a buddy.” In contrast, the prepay patients were much more compliant; 80%+ completed their treatment programs on schedule or close to it, 70% referred, and about 25% referred abundantly, and stayed on after their primary treatment programs as lifetime ‘maintenance’ patients. That’s the power of prepay.

      Autocharge has a similar effect. The person getting his credit card charged $125.00 on the first of every month and getting $200.00 of vouchers for products and services is far more likely to use at least the $200.00 (but probably spend more) than the person paying as he patronizes. He is more likely to be exclusive rather than divide his spending in your category by whim and random convenience. Therefore, you are more likely to succeed at retention and a habituated pattern of patronage.

      Sometimes, one of these is helpful while one is harmful. For example, in the GKIC business, the bundled services of membership, subscriptions to newsletters, and other deliverables are autocharged monthly, usually after a free trial period. You can find the current offer at www.GKIC.com. This is contrary to the newsletter industry norm of one-, two-, and three-year pre-paid subscriptions. For GKIC, it works better than term subscriptions and renewals. Significantly, there is “Push,” not passive consumption of the goods and services involved. By that I mean, they arrive. GKIC sends Members two packages of newsletters, CDs, and other material each month that arrive at homes or offices, plus email series, calls from Concierges, as well as invitations to online and live events. Many businesses that ask the subscriber/customer to go fetch everything they’re being charged for, as digital downloads, content at membership sites, and benefits at physical locations, suffer a much higher loss rate when trying autocharge. Often, businesses built on passive consumption find prepay outperforms continuity.

      One way or another, or in multiple ways, the point is to get the customer committed.

      Consider visiting Disney World. We went about once a year and sometimes skipped a year and never went more than twice a year until we bought a time-share in the Disney Vacation Club. With that, we own a bank of points applied to lodging at our home-base Disney resort or at all the other Disney resorts, including a few not in Orlando by the parks. These points are added to our account but also expire year to year. We prepaid for them for life. It now feels free to go stay there, but costs out of pocket money to go anywhere else. We now go, on average, three times a year, sometimes four times a year. We are also more habituated: We have favorite restaurants there, favorite shops there, and we know the lay of the land. Every time we go, of course, we spend like maniacs at those restaurants, in those shops. They smartly seed that spending with discounts and promotions exclusive to Disney Vacation Club owners. To not go and let prepaid points expire is unimaginable! We are thoroughly committed customers.

      For guests who aren’t (yet) DVC owners, Disney is very aggressive in pushing the booking of the next vacation while enjoying the current one, with in-room, in-hotel, and in-literature marketing. They are also aggressive at converting resort guests and park visitors staying elsewhere to DVC. They are also pretty pushy about ascension. One-day to multiday park tickets. From park pass to express line pass. Up to use of private VIP guides. Very undemocratic. They understand the importance of the committed customer.

      My friend and great GKIC Member Alan Reed has hundreds and hundreds of committed customers for his dairy farm in Utah, hooked up to home delivery—by real “milkmen” in trucks with routes, some customers on autodelivery and autocharge. The customers with regularly scheduled deliveries and autocharge or billing accounts buy more, buy more consistently, and stay as customers much longer than those who “just call when they need something” or “swing by the store.”

      Many, many, many businesses have opportunities to lock in and automate certain kinds of repeat patronage from at least a segment of their customers, but never bother to figure it out and do it.

      The next Rubicon is between (just) committed customers and evangelical ambassadors. This is, by far, the highest level of customer and customer value. I’m a fine ambassador for Disney. Clients who come to my home office encounter a shrine of Disney collectibles, a talking Disney clock, and more, and ask me about Disney, and get enthusiastic testimony. I know of more than 30 people who’ve become DVC owners because of me. Others who’ve stepped up to using VIP Guides because of me. At one time, when I lived in Phoenix, I was an evangelical ambassador for my trusted car salesman, and brought dozens of family members, friends, and peers to him. Same with my chiropractor of that time. I liked telling people my stories about them and, in a sense, spreading their gospel. I believed in them—I didn’t just buy from them.

      You really can