Keeping Customers in a Crummy Economy

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More often than not these efforts are directed at customers who live in areas where cable competition is more cutthroat. The company also discourages switching by charging early termination fees—generally $150 to $250—that are pro-rated according to how much time remains on a contract.

With a longer and deeper recession looming larger on the horizon, telephone and cable providers will be more inclined to use prices to differentiate themselves from their rivals, predicts King at Stifel Nicolaus.

Tough Task for Car Dealers

For big-ticket items like cars, keeping customers coming requires a more Herculean effort. With larger banks increasingly unwilling to approve car loans even to applicants whose credit scores used to be regarded as stellar, it's up to the manufacturers to risk filling the gap by financing less creditworthy customers, or "buying deep," as auto industry analyst Brett Hoselton at Keybanc Capital Markets (KEY) calls it. Carmakers can also offer a bigger discount so that the remaining cost meets the threshold of 90% of the manufacturer's suggested retail price that financing organizations generally require, he adds.

Car dealerships are starting to create their own incentives by narrowing their profit margins, in some cases giving up the profit they used to make on the financing terms, which can reduce the customer's monthly payments. Dealers are happy just to make a sale, says Jack Sayer, managing partner at Sayer Partners, a consultant to car dealerships and a former car dealer himself.

The best dealers he works with are aggressively contacting current customers three months before their leases or financing contracts are due to expire and preparing them for the tougher challenges of getting financing. For them, retaining customers requires as much outreach to potential financing sources as to the customers themselves. Dealers are now courting the smaller local banks that are still eager for business—banks that dealers wouldn't have felt as confident using in the past, says Sayer. They're also contacting local credit unions, which are typically less aggressive about drumming up new business than banks. "[It gives dealers] another source for financing and it also works in reverse," he says. "These credit unions are sending you customers and they usually have pre-approval of $25,000. This generally doesn't happen with bank customers."

Subscribing to services such as DealerTrak, an Internet-based credit application system, is another way for dealers to expand their lists of potential financing sources. It allows them to submit a customer's application to 1,000 banks all at once instead of faxing it to them individually, says Sayer. He also encourages clients who may have been resistant to using the Internet to make their Web sites more user-friendly, including posting information about customers' financing options.

Seeking Access to Affluent Customers

Health clubs like Life Time Fitness (LTM) seem to be among the most pro-active companies when it comes to customer retention. Life Time eschews long-term contracts and discount offers in favor of more lavish customer service, facilities, equipment, and features like children's centers—replete with computers, basketball courts, and climbing equipment—where parents can securely park kids under 12 while they work out.