One big reason I got into the dry cleaning business many years ago was due to the idea of once you had a customer, it was ours to lose him. Everyone had clothes to professionally dry clean or launder every week and if you kept the customer happy and added some new customers, your business will grow.
That was the idea at least.
Recently, working with a grad student at Fairfield University who was interested in analyzing our data for her studies, she discovered an interesting (and dissapointing) aspect about our business in looking back 20 plus years of customer data. She discovered our new customer churn rate was incredibly high and that our retention of new customers was a mere 10-12%. In other words, for every 100 new customers who tried our service, only 10% would stick.
Despite the demand for dry cleaning has gone down over the years due to casual clothing (exacerbated by the pandemic and people working from home), there was something else going on here. Our thinking was that even if you only have one thing in your closet to dry clean, you will, eventually, have to clean that one thing again. Well, we were right about that for only 10% of the customers. Since getting new customers was costly, we figured it would make sense to work on the retention of the new customers so we stepped back to look at improving that.
We’ve always felt that our new customer on-boarding was second to none for our industry. At Fabricare, we are proud of the quality of our work and the service we give our customers. Our welcome package would highlight all the great services and every new customer would also get a follow up from one of our route managers.
We realized that after that first effort, there was nothing. Periodically, we would reach out to all customers who hadn’t used us for some time, but we always found they were happy with the service but didn’t have anything to be cleaned.
In reviewing our new customer system, we realized that we weren’t giving enough time or effort to building the relationship. As part of our analysis, we looked back at customers who have been with Fabricare since we installed a computer system almost 25 years ago and found that hundreds of them are still active customers. At closer look at this group, we noticed we knew most of them and something about them. We had “relationships” with them. Good relationships.
How did that happen and as important, how do we build those relationships with new customers?
We concluded it takes time. Like any relationship, two people need to get to know each other and that doesn’t happen after one visit.
As I type this, we are still developing a new on-boarding process that is focused on how to give unprecedented service for any industry. We are realistic that we can’t retain 100% of new customers but we can retain higher than 10%. Our process will be more focused on the individual than one size service fits all. There will be more touch points to get to know the customer and have them get to know us. As we test this process out, early indicators are good. Here is what one new customer said after her first experience with us:
“My goodness-what excellent customer service. I am going to call the Ralph Lauren store in New Canaan and let them know about you. They don’t have a dry cleaner contact to send clients to…and now they do! Also, when my friends are looking for a top shelf dry cleaning service, I will certainly refer them to you. There is nobody like this in any industry anymore…you are a cut above!” – a more than satisfied Greenwich customer!
This email crystalizes the mission for Fab Service in that we surprised and delighted the customer, she is now an advocate and most satisfying is that we gave her service that she doesn’t experience “in any industry.”