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How to Maximize the Value of Outdoor Recreation Customers After the Sale

By Parker Stoner – Senior Vice President, Director of Database Marketing

All companies recognize the importance of customers to their businesses. Most marketers have heard the old axiom that it costs seven (or ten or some other number) times as much to obtain a new customer as it does to retain a current customer. While outdoor recreation marketers acknowledge the importance of customers, we find that marketing programs directed to current customers often do not receive the emphasis they deserve.

The purpose of this document is to share a few ideas that will help you to increase the value of your customers after they have made an initial purchase. Hopefully, you will find these ideas useful regardless of whether you are just starting a customer marketing program or simply want a few additional suggestions to spice up your current efforts.

Why Customers are Given Less Attention than They Deserve

There are many reasons why some outdoor recreation companies do not focus sufficient attention on marketing to current customers. Here are four of the most common reasons:

1. Obsession with Market Share — The business world traditionally has prayed at the altar of “market share.” The way to gain market share, it is assumed, is to convert prospects to customers. The fallacy of this thinking is obvious because inattention or lack of service to current customers may lead to faster declines in market share than new customer acquisition can replenish. Further, many companies are finding that they can best increase share of market by growing business among current customers. Fifty thousand dollars allocated to the right kinds of customer marketing programs will usually add more to the company’s bottom line than will the same amount of money allocated to prospect marketing tactics. A study by Bain & Company shows that as little as a five percentage point improvement in customer retention consistently resulted in 25 percent to 100 percent improvement in profit.
2. Preference for Advertising Over Other Forms of Marketing Communications — Many outdoor recreation marketers are more comfortable with media advertising than with other forms of marketing communications. Advertising, which is better suited to reaching the vast audience of prospects, is perceived to be more exciting and is more familiar to many outdoor recreation marketers than direct mail, the telephone, e-mail and other tools often used in communicating with current customers. Although customer marketing communications may not be as familiar to outdoor recreation marketers as media advertising, we believe that customer marketing communications can be just as exciting and far more rewarding.
3. Perception That the Customer Belongs to the Dealer — Some outdoor recreation marketers express the attitude that end users of their products are not the company’s “customers.” Rather, they believe dealers are the company’s customers and the end users are the dealers’ customers. Therefore, they see little reason for the manufacturer to communicate with end users. We agree that dealers are important customers of outdoor recreation manufacturers. However, any outdoor recreation enthusiast who buys a brand name product believes themselves to be entering into a relationship with and to be a customer of the manufacturer just as much or more than with the dealer. Further, there is too much potential income for the manufacturer to gain (and too much income that could be lost) by aggressively pursuing the relationship with the customer.
4. No Knowledge of Who Customers Are — Many outdoor recreation manufacturers who sell through dealers do not have the names of most or any of their end user customers. In spite of the growth and unquestioned value of database marketing during the last 10 to 20 years, some companies have yet to establish a marketing database of customers. Some other companies that have databases have not aggressively used nor maintained them.

General Guidelines for Maximizing the Value of Customers

Outdoor recreation enthusiasts usually have a combination of feelings, concerns and expectations at the time of and immediately following a purchase. For the most part, they are excited about their new purchase and anxious to use the product. They may see themselves as starting a new relationship with the company. (Yes, they sometimes have this perception even on small ticket items.) Often, they have a desire to interact with individuals at the company. On the other hand, outdoor recreation enthusiasts may feel some apprehension soon after their purchase. They may wonder if they made the best brand choice. There may be some concern as to how much attention they will receive from the company and what level of help/support they can expect when needed.

One key to maximizing the value of outdoor recreation customers after the sale is to reinforce the positive feelings and expectations while reducing the negative feelings and concerns described above. This is accomplished by:

1. Identifying customers by name.
2. Showing appreciation for their business.
3. Understanding and fulfilling their needs and expectations.
4. Communicating with them.
5. Providing them with the means and opportunities to communicate with the company.
6. Helping them enhance their experiences with the company and products.
7. Giving them more reasons and opportunities to buy more of the company’s products and services.

The exact ways your company goes about accomplishing the above will depend upon the types of products you offer, the customers you serve, your internal capabilities and the company itself. For example, manufacturers of powerboats, tents, rugged footwear and fishing lures will each approach customer marketing in ways different from each other, but also in ways that are different from competitor companies in their own industries.

Ideas for Maximizing the Value of Customers

Consider these ideas to maximize the value of outdoor recreation customers after the sale:

1. Build a Marketing Database of Customers
   A marketing database of customers is the foundation of a great customer marketing program. The customers’ names and addresses are a starting point, but think beyond that to capture purchase and interaction data, outdoor recreation activity interests, opinions, e-mail addresses and anything else that may be of value in communicating with customers. If you do not have a marketing database of customers, take steps today to create one. If you already have a database, think of ways to improve it. A good marketing database will be one of your most valuable marketing tools and may be one of your company’s most valuable assets from a financial perspective.
2. Say “Thank You”
   One of the most important relationship–building actions you can take is to thank customers for being your customers. This is best done via regular mail or over the telephone within two or three months of an initial purchase. (We recommend regular mail or telephone for an initial “thank you” even if you have a customer’s e-mail address. A letter or telephone call is perceived as representing more special treatment.) Continue to show appreciation for customers’ business in future communications. Customer appreciation communications may be combined with some of the other ideas presented. Frequent, genuine expressions of appreciation are likely to have a significant impact on your ability to generate repeat business, add-on business and referrals.
3. Get to Know Customers
   The more you know and understand your customers, the better you will be able to serve them and maximize their value. The key is not to think of them as a homogenous group all with the same needs and interests. Each customer will have a unique combination of outdoor recreation interests, needs, expectations of their relationship with your company and other characteristics. Use the power of database marketing communications to get to know each customer individually and customize your communications to them. Use each interaction with a customer as an opportunity to obtain a little more information. It is through this interaction that you can learn which of your products/services may be of interest and when customers are likely to purchase. This enables you to execute communications with tremendous relevancy and timing.
4. Protect Their Privacy
   Privacy has become a huge concern for consumers. This is particularly true for outdoor recreation enthusiasts, many of whose activities make them targets of political activists, shady business schemes and criminals. Most outdoor recreation consumers are willing and even enthusiastic about sharing information with companies with whom they have chosen to do business. However, if you make that information available to other companies or organizations, you are certain to cause anger and resentment. A few dollars of list rental income is not worth the loss of a customer. Establish an absolute policy with regard to protecting customers’ privacy and let them know about it.
5. Identify Repeat Sales Opportunities
   How often do customers buy each of your products? Some customers may buy certain products such as fishing lures or dehydrated food for camping trips several times during the season. Other products such as rugged outdoor footwear or fishing tackle may be once-a-year or every–other–year purchases. Still other products such as boats and tents may be purchased only once every several years. If a customer is likely to make frequent repeat purchases, consider developing special frequency or loyalty buying programs to ensure that you obtain all of the customer’s business. With less frequently purchased products, attempt to determine when the customer may be ready to purchase again. Record this information in your customer database. Be sure to engage in active communications with the customer well in advance of the likely repeat purchase date.
6. Cross-Sell Products
   That customer who bought one of your sleeping bags is probably an excellent prospect for your tents and backpacks. Also, that customer may need sleeping bags for his wife or kids. Identify these needs. Then let customers know what you offer and how it may meet their needs.
7. Explore Add-On Products/Parts/Accessories Sales Opportunities
   The customer who purchased your kayak may need your paddles, backrests, hatch installation kits or replacement carry handles. The archery enthusiast who bought your compound bow may need sights, bowquivers or arrow rests. Marketing communications directed to customers remind them of the benefits of these products and the fact that your company offers them. Sometimes retailers are unwilling to stock an extensive line of add-on products/parts/accessories. Thus, these products often lend themselves to direct sales by your company via catalog, telephone or your web site. Think of this as an opportunity for more interaction with your customers and an opportunity to increase sales.
8. Sell Affinity Merchandise
   The fisherman who buys your rod and reel probably wears a cap, jacket and T-shirt. Most likely, he takes along a water bottle or beverage cooler when he fishes. He has to get those products somewhere. They may as well have your company’s name and logo on them. If the fisherman likes your company, he will probably be proud to have these products. And remember that many of these products will be visible to friends and other enthusiasts (potential customers for you). As with add-on products/parts/accessories, affinity products are great candidates for direct sales.
9. Provide Information to Enhance Customers’ Use of Your Products
   What can you do to ensure that customers get the greatest enjoyment while safely using your products? Offer customers hiking guides, boating tips or whatever other information is appropriate in booklets, on your web site or on CD ROM. If you create something of significant value, you may be able to sell it. Consider creating a computer game based around your product that lets customers “practice” using your product. More enjoyment translates into more repeat, add-on and cross-product sales.
10. Encourage More Use of Your Products
    This can be as simple as providing additional product use suggestions in printed form, on your web site or on your telephone hold message system. You can take this idea several steps further by arranging fishing, camping, boating, hunting outings or adventure trips on which your products will be used. Perhaps you can establish a travel service to organize and sell these trips. Again, more use translates into more satisfied customers, stronger relationships and more income.
11. Provide Additional Services
    Can you provide additional services that will help customers buy, sell or use your product or be of other value to customers? A travel service as mentioned above is one possibility. Have your considered facilitating trade-ins on old products so customers can upgrade to newer ones? How about financing or insurance services? Some outdoor recreation products lend themselves to repair or customizing services.
12. Offer New Product Previews
    If you are introducing exciting new products, let your customers know about them in advance. They will appreciate the special treatment. And they may want to be among the first to buy. Consider working with dealers to have special product preview parties at their locations. Invite your customers and maybe a few key prospects that can be persuaded by your current satisfied customers. Another product preview option is to make the previews available i n a special private area of your web site. Customers can be given a special password necessary to enter the product preview area.
13. Identify Your Best Customers
    The old 80-20 (or 90-10) principle applies to most outdoor recreation companies. That principle says that 80 (or 90) percent of your sales volume will be accounted for by only 20 (or 10) percent of your customers. The first step is to identify these most valuable customers (MVCs). The second step is to treat them like kings and queens because the future success of your company depends upon them. Stay in contact with these people. Listen to their needs. Satisfy those needs.
14. Develop a Customer Newsletter or Magazine
    Company newsletters or magazines enable you to stay in contact with customers, publicize your products and services, and build stronger relationships with customers. Assuming the newsletter or magazine provides useful information, consumers may be more receptive to this form of persuasion than to straight promotional mailings. Outdoor recreation enthusiasts will perceive a good company newsletter or magazine as a benefit of being a customer. Be sure to encourage customers to interact with and contribute to your company newsletter or magazine. Given the widespread use of e-mail and the Internet, you might consider an electronic newsletter or magazine.
15. Use E-mail to Communicate with Customers
    E-mail offers an inexpensive and rapid method of communicating with customers. Obviously, the challenge is to obtain e-mail addresses from customers who have them. You may be able to collect customer e-mail addresses through product registration/warranty cards, via questionnaires or through your web site. Communications sent via e-mail can be brief “thank you” messages, new product/service announcements, ideas for using products or an electronic magazine. Most e-mail messages to outdoor recreation enthusiasts are best kept brief, but may contain links to your web site where more details can be provided.
16. Conduct a Customer Satisfaction Survey
    Most outdoor recreation enthusiasts appreciate an opportunity to express their opinions. A customer satisfaction survey gives your customers a chance to offer you their ideas and share any frustrations. The most positive contribution of this type of communications is that it gives customers a feeling that your company cares about them and that they have a voice. Additionally, you may find that a survey will identify a serious problem that you can correct before it does too much damage.
17. Establish a Special Area or Special Features Section on Your Web Site for Customers
    Consider establishing a special area of your web site exclusively for customers. Perhaps you can include downloadable owner's manuals or important service information. This could be a good place for company or product news. Some of this news can encourage purchases and links to pages where customers can order the products. If you want to take this idea a giant step further, enable your customers to establish their own personal pages on your web site. It is now possible to create personal web pages “on the fly” using database driven web technology. You establish a basic template and then allow each customer to customize the information he or she wants on the web page. For example, a sleeping bag manufacturer may create a template page with sections such as company news, company products, camping links, other news and local weather. Customers register at the site, provide information and make selections regarding what content they want on their pages. As part of the process, the company could encourage customers to record which products they currently own and in which ones they have an interest. This information could be used to direct product messages to certain customers.
18. Make It Easy for Customers to Contact Your Company
    The two biggest concerns most outdoor recreation customers have after making a purchase are (a) will the product function properly and (b) how do I reach the right people at the company if I have a problem or need information? Your company will be held in high regard if you make it easy for customers to reach you at times that are convenient for them to do so. Toll-free phone numbers, e-mail addresses and contact forms on web sites are three of the best and most obvious ways to allow customers to contact you. With each of these methods, make certain they are well publicized, easy to use and that customers are able to receive immediate, or at least prompt, responses.
19. Encourage Customers to Make Referrals
    The most persuasive and effective type of marketing communications is that which originates from a very satisfied customer and is directed to a friend or acquaintance. Most outdoor recreation activities are frequently engaged in by two or more friends together. That means there are many opportunities for one friend to ask about or tell why they prefer a particular fishing rod/reel, backpack, hiking boot or other products. Customer referral strategies can vary from occasionally encouraging customers to “talk up” your brand among friends to formally structured referral programs with rewards. When done correctly, they can be very productive.
20. Consider a Customer Club (But Be Careful)
    Customer clubs were the rage in the 1990s. Unfortunately, they were overdone. Even worse, most of them were poorly concepted and even more poorly executed. Many customer clubs were cheap attempts at building customer loyalty that consisted of little more than a membership card, a patch or decal and a newsletter full of out-dated information. Seldom do they offer anything of significant benefit to the customer. Many outdoor recreation enthusiasts have a desire to belong to a group, bond with a company and receive benefits. Thus, the concept of a customer club is good and they can be effective. However, do not attempt to develop one unless you are committed to making it spectacular, rather than just good, with a total focus on making it beneficial for the customer.
21. Promote Other Products/Services Inside the Package
    One of the best times to communicate with outdoor recreation customers is immediately following their purchase. One way to reach customers immediately following their purchase is to include materials inside the product package. Customers are usually excited to get the package open. Although they may be more interested in reading instructions or using the product, they will probably get around to looking at other enclosures. Although these enclosures cannot be personalized for the recipient, they can promote other products and services. This is an especially good opportunity to feature add-on products or services related directly to the product just purchased. Also, this is a good opportunity to ask the customer to supply additional information, such as an e–mail address, purchase habits, preferred magazines, etc.
22. Collaborate with Customers
    Many outdoor recreation enthusiasts are willing to pay more to get exactly what they want instead of just buying the product that comes closest to what they want. The keys are to learn exactly what each customer wants and to focus your company on delivering the combination of products and services that will meet those wants. Several prominent outdoor recreation companies have established custom services to work with customers to design products that are tailored to individual needs. We predict these custom services will grow in the outdoor recreation industry. You can collaborate with your best customers by helping them design their own product and service combination. You will help them to help you sell more products at premium prices while building such a strong bond, it will be nearly impossible for competitors to steal them.

There you have 22 ideas for maximizing the value of your customers after the sale. Some of the ideas are simple communications to show customers you care. Other ideas are more directly sales oriented. Finally, others are focused on better serving your customers. Maximizing the value of your customers is best achieved by using a combination of ideas. Twenty-two are discussed above. There are hundreds more that outdoor recreation marketers can use.

I welcome your comments regarding this article or additional ideas for maximizing the value of customers after the sale. Call me at (402) 437-6458 or send e-mail to parkers@swansonrussell.com.