Understanding the dynamics of customer retention is crucial for the success of any business, including Christmas light installation companies. A high returning client rate indicates satisfaction and loyalty, which are essential for sustainable growth. But what constitutes a good returning client rate in this industry?
The Realistic Benchmark
While achieving a 100% returning client rate might seem ideal, it's not realistic. In the Christmas light installation industry, a good returning client rate is typically about 80%. This accounts for the natural fluctuations in customer needs, preferences, and circumstances such as moving or being away for the holidays.
Here are 8 influences on client retention and suggestions to implement them:
Customer Satisfaction
High-quality installations, reliable products, responsiveness, and exceptional customer care are key to keeping clients coming back. Due to the personal and creative nature of Christmas lights, you can expect up to 20 touchpoints or interactions with new customers, from marketing to final Christmas light removal per customer. This may be reduced to just 5 touchpoints in subsequent years. Make sure your team is adequately trained and equipped to handle each touchpoint in a meaningful way.
Seasonal Needs
Some clients may only need your services for special occasions or alternate years. This variability impacts the returning client rate. Furthermore, permanent lighting solutions like Chromaglow and stretch strings will reduce repeatability. However, they make for terrific upsells when clients know they can enjoy the beauty of lights year-round.
Economic Conditions
Economic downturns can affect discretionary spending, including holiday lighting services. Flexibility in pricing and packages can help retain customers during tough times; however, pricing is usually the last thing you should lower. Instead, focus on the customer’s wants while simultaneously increasing your perceived value. They don’t need lights. They want lights. But subconsciously, it’s not the lights themselves they want. In its very basic form, customers want just two things: a look and a convenience. If you can communicate each of these desires more effectively than your competition, you’ll win their trust without having to lower your pricing. Techniques include adding beautiful, professional photos to all of your messaging and a frictionless booking and payment system.
Competitive Landscape
The presence of competitors and new market entrants can influence your retention rates. Offering unique services and maintaining high standards can help mitigate this. It’s easy to get carried away with creative alternatives to your design and offerings, but clarity is of the utmost importance. Confused clients don’t buy. So keep the experience as simple and frictionless as possible throughout every touchpoint with your customer. If they feel they are able to achieve the best look and the most convenience by hiring your service, they will undoubtedly stay with you.
Quality
Most clients have handled Christmas lights at one point in their lives. They generally know how to install lights. Therefore, it’s important to communicate that you can install the lights better, faster, and safer than they can. Quality checks to ensure the lights are installed and functioning perfectly are critical. Using high-quality products like Chromaglow also has a significant impact. Small details like using plugs with dielectric grease, for example, can go a long way in ensuring maintenance calls are minimized.
Loyalty Programs
Implementing loyalty programs that offer discounts for early season installation, free services such as storage, or other perks for repeat clients can incentivize them to return. Try to book next year’s installation at the time lights are removed in the new year. By pre-scheduling, it’s one less thing for the client to worry about, and they are less likely to shop elsewhere in the meantime.
Personalized Marketing
Use your CRM to personalize communications and offers based on previous interactions and preferences. If they have some excellent opportunities for decorating trees, for example, send them some professional photos of similar trees beautifully decorated. Photos resonate much better than words. CRM tools such as HubSpot, Jobber, or Front can help streamline this process.
Seasonal Check-Ins
Regularly check in with past clients, especially before the holiday season, to remind them of your services and any special offers. Opportunities for off-season communication include decorating patios and backyards for social gatherings. Summer light decor has gained in popularity, particularly since Covid. Again, always use beautiful photos to help them imagine what is possible; otherwise, it will take too much energy for them to understand your vision, and they’ll skip over it.
Conclusion
A good returning client rate in the Christmas light installation industry is around 80%. It costs 5x as much to win new customers as it does to retain current ones. Therefore, focus on exceptional service, personalized marketing, and effectively communicate your ability to achieve the look and convenience of your service better than your competition. These methods will improve your retention rates and ensure long-term success.