I always think the autoshop in my neighborhood is good with keeping customers. When I first moved in to the area last year, I was given a coupon for free oil-change. At first, I was a little bit skeptical about their 'free service'. I thought they would ask me to buy other 'pricey services' like changing tires or the timing belt etc. No, they didn't. I just paid $2 for tax and walked out the door.
To keep building a group of loyal customers, they had a policy of "buy 2 (oil change) get 1 free." Of course you already knew I stick around to get my free oil change again!
So that's how I started to trust the mechanics in this particular garage. Since the mechanic drives the same kind of car as I drive, he likes telling me tips to maintain my car. And there was one time, the mechanic even bought me food as I waited for a little bit too long.
So why am I telling you about my oil change experience? Actually I can find some similarities of the pension consulting service and the oil change service.
Both oil change and pension valuation are almost like commodities. A customer (me) can take her car to any autoshops for an oil change. Usually the result of the oil change is not noticeable. But in order to upkeep your car, you are told to change the oil regularly.
Similarly, a customer (the HR department) can take the company's pension plan to any actuarial consulting firms for a pension valuation. If you have seen a pension valuation report, it's not the most interesting reading material in the world. But in order to follow the government regulations and to make sure the plan has enough money, the company is told to do a pension valuation every year.
You can't really compete on price on oil change/pension valuation. If you raise the price for $2/$2000, you may lose a customer who is very cost-conscious (read: frugal).
The trick is- use the oil change as the starting point to develop trust with the customer. Once there is trust, it is easier to offer advice and sell other 'upscale' services. But still, only offer what is the best for the customer though. (The golden rule does apply here. ;))
To keep building a group of loyal customers, they had a policy of "buy 2 (oil change) get 1 free." Of course you already knew I stick around to get my free oil change again!
So that's how I started to trust the mechanics in this particular garage. Since the mechanic drives the same kind of car as I drive, he likes telling me tips to maintain my car. And there was one time, the mechanic even bought me food as I waited for a little bit too long.
So why am I telling you about my oil change experience? Actually I can find some similarities of the pension consulting service and the oil change service.
Both oil change and pension valuation are almost like commodities. A customer (me) can take her car to any autoshops for an oil change. Usually the result of the oil change is not noticeable. But in order to upkeep your car, you are told to change the oil regularly.
Similarly, a customer (the HR department) can take the company's pension plan to any actuarial consulting firms for a pension valuation. If you have seen a pension valuation report, it's not the most interesting reading material in the world. But in order to follow the government regulations and to make sure the plan has enough money, the company is told to do a pension valuation every year.
You can't really compete on price on oil change/pension valuation. If you raise the price for $2/$2000, you may lose a customer who is very cost-conscious (read: frugal).
The trick is- use the oil change as the starting point to develop trust with the customer. Once there is trust, it is easier to offer advice and sell other 'upscale' services. But still, only offer what is the best for the customer though. (The golden rule does apply here. ;))
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