As the saying goes: “Rent a man a fishing pole, and you’ve made a customer for a day. Send him a follow up email and an in-store coupon, and you’ve made a customer for a lifetime.”
Okay, so we may have taken a few creative liberties here. Call it an alternative adage. Anyway, the point we’re making is simply this:
In the all-important world of customer retention (which can cost up to 7 times less than customer acquisition), the rental sphere offers a world of unique opportunities to engage with your first-time users and transition them into returning customers.
Why should this interest you? Well, as Len Markidan at Groove puts it, “The difference between a business that sustainably grows long-term, and one that flames out and dies, often comes down to just three words: Customer Lifetime Value.” That’s heady wisdom from a guy whose advice you’d do well to take seriously.
To help improve your CLV when it comes to retail businesses that dabble in the rental sphere, we’ve put together a list of our 5 most helpful strategies to turn first time users into repeat customers. Take a look.
1.) THINK CREATIVELY (AND INTELLIGENTLY) WITH YOUR RENTALS
When it comes to rentals, it pays to adapt your services to your customer’s needs (instead of the other way around). This means identifying how your customers want to interact with your inventory, and for what purpose. Don’t assume a cyclist wants to rent a bike, only to find out she was solely interested in the wheel-set.
Western Bikeworks in Oregon is a great example of this practice in action. They’ve adapted their Spinlister Pro account to allow customers to rent everything from saddles to ride computers, all in response to an identified need. “A big part of the reason we have a rental program is to give [our customers] an opportunity to engage with a product before they decide to spend the money,” says GM Colin Ross. “We’re able to provide that service on the physical side and maintain the depth of inventory for the e-commerce side.”
2.) TAKE INITIATIVE ON CUSTOMER SUPPORT AND APPRECIATION
Every customer desires support and appreciation, but they don’t necessarily want to go looking for it. In fact, according to an oft-cited statistic from Lee Resources Inc, there are 26 dissatisfied customers who quietly take their business elsewhere for every 1 who bothers to make a complaint. Yikes.
The moral of the story is, if you want to find areas of improvement or say thanks for a new client’s business, be proactive about it. Personal, unsolicited emails are a great way to engage with your customers both before and after a rental, and the positive impact can be a lasting one.
3.) ENGAGE YOUR NEW RENTERS QUICKLY, WHERE THEY ARE
Gone are the days of a single customer service phone number providing adequate support for all of your clients’ diverse needs. Whether it’s a live chat module on your website or a dedicated social media account on Twitter, the more efficiently you can respond to and resolve customers’ problems the better your chances of minimizing the damage caused by a potentially negative rental.
To put this in some perspective, there’s a poignant marketing stat you should always keep in mind. In her book Understanding Customers, customer service guru Ruby Newell-Legner found that it takes an average of 12 positive customer experiences to make up for every negative one. Now that’s a lot of unnecessary catch up work.
4.) USE TECHNOLOGY TO MAKE THE RENTAL EXPERIENCE NOT ONLY EASY, BUT MEMORABLE
Let’s be honest: the act of renting an object doesn’t usually elicit squeals of excitement. Given the right technology, however, the process can add an element of modern convenience to your business that customers are likely to remember. Just ask Local Hub in Deep Ellum, Dallas.
After the overwhelmingly positive reactions to their Spinlister Pro-powered rental kiosks, owners Kristie Holt and Justin Shannon teamed up with the city’s Uptown Urban Market to offer a second rental location in North Dallas. It’s an expansion that stands in stark contrast to the city’s two B-cycle stations, which were dubbed “The World’s Saddest Bike Sharing Program” by the Dallas Observer. Sometimes the right rental experience makes all the difference.
5.) GET ACTIVE IN YOUR COMMUNITY
Unlike online retailers, the brick and mortar nature of rental shops means they provide a physical presence in their neighborhoods. Use this opportunity to your advantage by engaging with first time renters, letting them know about trails, workshops, and community rides that will help to establish a bond of trust and familiarity between you.
In Brooklyn, 718 Cyclery regularly teams up with Spinlister to provide cost-free events like their City Slicker MTB races. As owner Joe Nocella puts it, the goal is to “focus on the things that the internet can’t take away. We do tons of trips, races, shop rides, and long camping trips every year. It’s all about community building – that’s what we’re good at.” It’s exactly that kind of welcoming attitude that will help to turn a one time renter into a lifelong customer.