Management & Operations

Breathing Life Back Into a Customer Dead List

Posted on July 1, 2004 by Kristen Force, Editorial Assistant

In the constant pursuit to secure new business, motorcoach operators often forget the customers they have lost along the way.

But this segment of the market shouldn't be so easily ignored since it's always easier to keep existing customers than to find new ones. After all, you already know these customers have an interest in tour or charter service. You also know where they have traveled, the purpose of their trip and what services they requested.

Yet many operators fail to inquire about why a customer has stopped doing business. It may be a problem with service quality or pricing, or simply that the customer moved out of the service area. The only way to find out is by doing regular follow-ups. This can be taken a step further by developing a customer win-back strategy.

Those who have recognized the benefits of reaching out to former customers often see increases in customer retention and higher customer service satisfaction scores.

Keep track of customers
The first step in winning back customers is identifying those you have lost. A spreadsheet or database is the most common tracking tool used to examine a customer's travel habits over time.

James River Bus Lines in Richmond, Va., compares sales for particular customers to track reservation trends. Customers who used to do business but haven't been heard from in a while are contacted, says Craig Treanor, sales and marketing manager. They are asked why they no longer do business with the company and how this may be remedied in the future, he adds.

While it can be painful to hear criticism of your company, it's a great way to get feedback that can lead to improvements.

John Meier, general manager of Badger Coaches in Milwaukee and Madison, Wis., says his company contacts customers directly to find out why they are no longer doing business. "We ask the ugly questions," says Meier. "We need to find out if it is a reason we can control. Maybe it's a driver issue or our pricing is out of line."

Meier cautions operators to use tact when dealing with unhappy customers to avoid turning them off even more. Gaining customers' confidence will make them more likely to express their true feelings and more willing to give your operation a second chance.

Sometimes a customer's needs change, and he may be unaware of other services your company offers, such as different size vehicles or trips to specific destinations. Treanor says he discusses all of James River Bus Lines' services with customers during the follow-up phone call to see if their needs can be accommodated.

Indian Trails Inc. in Owosso, Mich., began contacting former customers after it purchased 29-passenger mid-coaches.

"We wanted to let our customers know that we have new vehicles to better fit their needs," says Chad Cushman, sales director. "For some groups, our regular full-size coaches were too big and smaller buses may be more appealing to them."

Customers who haven't done business with your company in more than two years should be considered brand new customers, suggests Cushman. Explain all your services and options as if the customer has never heard of you before.

Furthermore, Cushman says he meets in person with former customers and those using services on a limited basis to make a more lasting impression. "I try to get as much information as possible about their needs and expectations," he says. "Visiting in person makes it easier to identify customers who could be using more of our services."

Contact early and often
Local school districts provide Colonial Trailways in Mobile, Ala., with the bulk of its business. These types of customers present challenges for a motorcoach operator because they often uses price as the sole selection criteria.

George Starns, vice president of marketing, says these customers must be pursued early, before they settle for a cheaper alternative. He tries to contact the school districts at least 90 days before the start of the fall sports season and spring field-trip schedule.

In addition to cost, Starns says changing personnel on the customer's end can also impede customer retentions. New staff members may not know about the existing relationship and try to set up service with a different operator.

Frequent communication can keep you informed about the current contact person, while also giving you an edge over competitors in establishing a business relationship with a new contact.

Colonial Trailways employs a part-time salesman who is responsible for maintaining contact with the local schools. This includes sending mailers as the seasons change with a list of services, and meetings with athletic coaches, band directors and field trip coordinators.

Mountain View Tours in Tucson, Ariz., also benefits from following customers' travel trends and establishing early contact with them. Sales Director Fred Ullom says groups who booked a charter in the past are contacted again at the same time of year or when a similar event is scheduled to see if they are planning to take another trip.

For example, a group who chartered a motorcoach for a trip to Las Vegas in May 2004 would be contacted again in February 2005 to ask about the group's plans.

Provide incentives
Some motorcoach and tour operators refuse to budge on price, instead choosing to promote superior service. But even those touting "you get what you pay for" can create incentives to win back customers without causing a major profit loss.

Oklahoma City-based Kaleo Tour Company invites group leaders to try different vehicles and destinations before booking a reservation for the entire group. Product Development Days provide group leaders with a behind-the-scenes look at attractions, such as restaurants, cruise lines and entertainment venues. Additionally, Familiarization Tours are offered to customers at a discounted price when a new destination is being introduced.

"One way destinations work to promote their areas is by hosting group decision-makers for a hands-on tour," says Todd Stallbaumer, Kaleo's tourism specialist.

Of course, making current customers feel appreciated and valued is one way to prevent them from ever being filed away and forgotten on a dead list.

Kaleo hosted Wow Day on Sept. 27. Its annual customer appreciation day is intended for potential customers as well as those it has done business with for years. Former customers are reminded about the event in the hopes it will entice them to give the operator another try.

Stallbaumer says more than 1,000 people are expected to sign up for the one-day trip package. The trip's main appeal is its $39 rate, which includes lunch and dinner. Each of the 24 buses used on the trip will travel to different, undisclosed attractions during a mystery tour. Then, the entire group will meet together for dinner.

The event's past success prompted Kaleo to continue it each year, resulting in the cultivation of new business relationships, says Stallbaumer.

At times, San Diego-based Five Star Tours charges wholesale rates to its most frequent clients. Alfonso Hernandez, group sales and charter manager, says the handwritten thank-you notes they send after a trip often impress his customers.

Hernandez says Five Star Tours retains much of its business by being direct, flexible and personable with clients.

Allow customers to compare
Just because a customer tries using another operator doesn't mean he or she is lost forever. Some customers need a comparison before they can determine which company is offering the best combination of price and service.

Indian Trails' Cushman says it is understandable that some customers want to try different operators before settling on one. He admits his company does not always offer the lowest rate, but many customers return once they have factored in service quality.

"We try to stay away from price," says Cushman. "We hope that customers will see the value they are getting for what they pay." Instead of price, his company advertises other significant features, including the newness of its fleet, its 24-hour dispatch service and its formally trained drivers.

Regular follow-up calls to customers, even those who decide to use another operator, show you care about their business, says Cushman. This is often more important to a customer than a small difference in price.

Above all, communication is essential when business relationships are being built. Customers will feel valued, and operators can gain better insight to a specific client's needs.

When looking for business expansion opportunities, keep in mind that the odds favor renewing old business relationships. Former customers are more likely to use your services than new prospective customers. Taking an interest in the needs and expectations of those you already know can result in higher customer loyalty and more repeat business.

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