Thursday, February 14, 2013

Find and Keep Software Customers

Book review of How to Win Customers and Keep Them for Life by Michael LeBoeuf (published 1987 by G.P. Putnam's Sons).

LeBoeuf tells us that we hear from about four percent of our customers. If any of the other 96 percent are unhappy with your company, they simply walk away, without saying anything to you. Most of the people who walk away - 91 percent of them, according to LeBoeuf - don't come back.

Most (68 percent) of the customers who walk away do so because they feel that the company treated them with indifference. Only nine percent leave because they're unhappy with the product that they purchased.

Each person who is unhappy with the company will tell eight to ten other people about their feelings. Happy customers, by contrast, will tell five people about a company they've dealt with.

Seventy percent of these unhappy people can be won back. That number grows to 95 percent if you resolve their unhappiness immediately.

Companies typically spend six times more money and energy to get new customers than to retain existing ones, despite the fact that existing customers are potentially worth much more to the company.

In general, LeBoeuf tells us, businesses do a bad job at customer service. The reasons for this are
  1. Employees don't know how to service the customer;
  2. Customer points of contact aren't identified and managed properly; and
  3. Businesses don't reward excellent customer service.
The focus of this book is how to win and keep customers. Be nice to your customers, and they'll be your strongest spokespeople. In fact, you should create a whole bunch of satisfied customers.

"The rewarded customer buys, multiplies, and comes back," LeBoeuf says.

Does this principle apply only to selling, say, soda? Or can it be instructive to mISVs in the software industry, too?

I believe that you can create a bunch of satisfied customers who will buy updates and upgrades to your existing applications, new programs that you release in the coming years, and software that you offer to your customers on an affiliate basis. Happy customers can help you sell multi-user and site licenses, and that can substantially increase your income.

This is a good book to add to your software marketing library.

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