The HeadScratcher Post Archive
July 2008
Maintenance and Customer Retention
            July 2008  The Headscratcher Post © Headscratchers LLC   Edition 39
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Maintenance and Customer Retention.  Let’s look at three maintenance strategies for assets and see how this might apply to the retention of customers.  This approach can also be applied to your relationships with your peers and managing your direct reports.

Three strategies of Maintenance include;
Fix it before it breaks.   Often called “Preventative Maintenance”, when an asset is reviewed and parts replaced before they break.   Most people bring their car in for maintenance checks … bolts are tightened, belts, filters, oil are replaced, tires, brakes, etc., are looked at.  If you have an oil leak, its origin is reviewed.   You do this because if you don’t, the cost of repairs can be very high.   Many people go to the doctor for a checkup, annual physical, etc., as a way to catch a problem early instead of waiting for problems to become serious.

When it breaks I’ll get it fixed.   Many items fall in this category.  Your vacuum cleaner, your washing machine, the plumbing in your house, the buttons on your shirts.   Most people don’t give these things a second thought, until they fail, and then they get them repaired.   Some people use this strategy before they visit a doctor or dentist.

When it breaks I’ll buy a new one.   Some items cost nearly as much to fix as they do to replace.   Examples here are your calculator, your toaster oven, a pair of scissors.  However, when it comes to the human body, this option is generally not available, i.e. heart transplant.

Different people put their belongings in different categories.  Some people will get a 3 year old PC repaired, while others will throw it out and buy another.   Some people signup and pay for the yearly washing machine checkup from Sears, while others will use the machine until it dies, then pay to get it repaired.  It’s often a personal preference based on one’s own ability, risk tolerance, cost of inconvenience, etc.

Now take a look at your business and your customers.   Clearly customers are an asset to a business.   So how to you “Maintain” that asset?    Do you provide preventative maintenance … keeping in contact with them, making sure that nothing is going to break?   Or do you pay attention to them when something breaks, i.e. there is a problem, they call customer care, and you fix it for them.  Or do you ignore them, and when they break, or leave you as a customer, you go out and just get a new customer?    Different businesses have different strategies … Most of the time it’s more expensive to acquire a new customer than to keep an existing one (buy a new item vs. repair or maintain an existing one).   So ask yourself, what is your strategy and why?

The Takeaway:   Customer retention is a huge goal for any successful company.  Have you given real thought to how your policies, implementations and strategies are consistent with this goal?   Is it better to be pro-active or reactive?  Is it better to spend money for “checkups”, and catch a problem early, or wait until something breaks?  Which one of the above three categories does your customer strategy fit into?  Do you have a way to check up on the health of your customer, and if not, can you find a way, and what would your business be like if you could?   Also, take a look and apply this thinking to your direct reports, or your peers.  What is your maintenance strategy with them?

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