How many consumer-facing industries do you know out there that have a 10 year lock-in period for their customers? Few, but one: schools and colleges have managed to do the impossible, and lock in customers for a decade and sometimes two. To attribute it all to the nature of the industry would be ignoring lessons that would be valuable no matter what industry your business is in.
While there are many factors that have to come together to make it possible, each of the ways outlined will be a potential piece of the puzzle. Adapt each of the 7 following factors to your industry’s current context and future course to take advantage of one of the best lessons in the world of education:
Be very selective about your associates
Ask a young parent how picky the school of their choice was, or anyone who has tried selling their products and services to a school. Ask about the time it took to convert a school into a paying customer. Schools do not easily bring outsiders into their fold. An institution's brand is protected like a holy grail. Such an approach, while seeming discriminatory to those who are not accepted into the inner circle, allows for a strict control on quality. One that your customers will appreciate.
Differentiate between customer and consumer
While the parent is the one who pays the tuition fees, it is the child who is the recipient of school’s services. It is important to make this distinction. Schools have to understand and then strike a balance between the demands of both their customer and consumer. This balancing act is difficult but the ones who are able to manage it will ultimately succeed.
Turn your last mile service personnel into salesmen
While you can have a sales and marketing team for customer acquisition, your last mile service delivery will determine if you retain your customers. In schools, teachers are the last mile service delivery personnel and it is their quality that is the differentiating factor for most parents. Most startups are focused on step 1 i.e. customer acquisition during their early days (as they should be) but fail to build that same ‘wow’ factor into their customer retention strategies. Make delight a part of your company culture, not as a separate department, to make retention as a by-product of your service.
Conduct regular two-way dialogue with all stakeholders
Like Parent Teacher Meetings (PTMs), reach out to your customers regularly for feedback. Let this feedback not be a one-way street from your customers to your business. Allow for feedback from your end where you are able to tell the customers about ways in which they can help you in better service delivery. If customers feel involved in the process and you genuinely act upon their feedback, they are likely to reciprocate the gesture by becoming better customers, maybe long-term customers.
Own your customer’s success story
What is the one common thing between the best schools in this country? They have been able to churn out more successful citizens than other schools. While some businesses treat their relationship with customers like a zero-sum game, the ones that are able to truly forge a long-lasting relationship have a stake in their customer’s success. Celebrate your customer’s success because for every success, you will have 10 other new customers who will want the same for themselves.
Treat your former customers like your current ones
Just because a customer has moved on does not mean that they are not valuable. Like the school’s alumni are responsible for strong referrals, your ex-customers are a source of word of mouth. Treat all customers, former and current, with equal dignity and courtesy. The sales that they send your way will not be fickle because the conviction of your former customers will rub off on the new ones.
Expand your business to your customers' needs
Schools have today expanded into offering nursery, play groups, mother toddlers, and creches. In essence, moving backward in the value cycle and aiming to lock-in their customers for another 5 years. Brilliant, isn’t it? Study your customer’s purchase cycle and aim to expand within that space. This is pretty much a reiteration of the philosophy of core competency. Organizing your business around your customers will allow you to better serve their needs and become indispensable to them.
There is very good reason why sectors like Education and Healthcare are considered evergreen or recession-proof. It is important that entrepreneurs look for lessons not only from within their industry but also from adjacent ones in order to do things differently. If every business aimed to delight and retain their customers for next 10 years, wouldn’t that make for a much better world?