Although you know it is better to keep your customers than to find new ones, sales teams are still rewarded more for new relationships than existing and companies still invest more in gaining new than keeping existing customers. I bet if you checked your own business model you would see just how much is invested in new rather than existing customer relationships. I am going to show you how to invest more of your time, money and energy in retaining your customers, Why? Because these relationships will accelerate and multiply your profits!
Retaining customers must be the primary goal for any ambitious company. Whether online or offline, small or large, ensuring that customer needs are satisfied and relationships maintained is critical for long-term business success.
In his book How to Win Customers and Keep Them for Life, Dr Michael LeBoeuf reports the following reasons businesses lose customers:
- 3% of customers move away
- 5% develop other relationships
- 9% leave because the competition provides something they seek that you do not carry
- 14% are dissatisfied with the product
- 68% quit because of an attitude of indifference or rudeness toward the customer by the owner, manager, or employee
Customer retention is the percentage of customer relationships that, your business can maintain on a long-term basis. Acquiring new customers is 5 to 7 times more expensive than retaining existing customers, with these rising cost of acquisition, companies must innovate assuming a proactive role in customer retaining. Customer retention means keeping customers happy, making them feel important, regularly considering and communicating with and keeping them coming back for more.
Customer attrition or churn is the loss of customers to a competitor or the end of a customer relationship.
Too often companies fail to realise that it is much easier and cost-effective to focus on keeping existing customers happy, rather than acquiring new ones.
7 Powerful Ways to Build Customer Retention:
- Prioritise your top 20% of Most Valued Customers
Before you can improve customer retention, you must identify who are your most valued customers and which customers you want to retain. By understanding your most valued segments and relationships, you can develop improved customer retention strategies specific to the customer or segment. This allows you to work smarter, not harder in gaining the greatest return on investment.
Speak to Your Most Valued Customers. Not only will you generate useful feedback and build the relationship but you will also stand out to your valued customers by showing them that you really care about their needs. Make these people feel special and part of your exclusive customer club to build customer loyalty.
- Go the extra mile for your customers
Seth Godin writes in his book, Purple Cow to transform your business by being remarkable in today’s world with all its distractions. The best way to be remarkable is to stand out by going the extra mile. Going the extra mile for your customers builds strong relationships and influence.
You do business with people you trust. Trust is essential in business, and building relationships with clients will garner that trust.
Cultivating shared values means taking an interest in your clients and their business. Consistently follow-up and let valued customers know you have listened and come up with ideas, strategies or solutions. This shows you have a shared value and are genuinely interested in their business, committed to build the relationship and go the extra mile.
- Listen to and Implement customer feedback
Customer feedback allows you to be proactive and make business decisions based on real data-driven feedback. Customer churn can be avoided by simply listening to your customers. Customer feedback and surveys are invaluable for learning how your service is performing in relation to your customer expectations.
An IBM study reveals there are 27% gaps with 62% of banking executives thinking they are delivering an excellent customer service while only 35% of customers agree. Consistently survey and monitor customer feedback and implementing social listening tools and bridge the gap. Feedback will help you to make informed business decisions and retain valued customers.
- Focus on customer experience Excellence
Unless you are constantly improving the experience of doing business with your company you are creating opportunities for your competitors to win over your customers. There is always more you can do to create an excellent customer experience, increase customer retention and building the relationship.
- Engage your customers
When making a choice between different services or products, we are all biased towards the products and services to which we are most comfortable with.
With content marketing, you not only create awareness with a wider audience of potential customers but you remain at the forefront of the mind of your existing customers. However, it doesn’t matter how good your content is if no one sees it, or if it is not relevant to your customers.
Recognise that an omnichannel strategy may be necessary to engage your customers in their preferred channel which may not be your preferred channel.
- Provide evidence and social proof.
The best form of advertising is not your own report Nielsen Advertising Report, such that, customers trust the opinions of family, friends, and other customers more than branded content and ads. Fear of missing out is a powerful marketing and retention tactic because more than 60% of customers trust online reviews.
Use customer testimonials and case studies to show prospective customers and remind existing customers the value of your products and services is powerful social proof.
- Demonstrate your expertise
Becoming your customers’ trusted advisor will build customer loyalty and reduce customer churn. Your customers will trust you to rely on you to give them the best advice and recognise you as an integral part of their business success. Because companies are becoming more dependent on independent expert services and technologies to run functional operations and areas. Whatever industry, if you can be the leading expert in your field, you will likely retain more customers.
If you are identified as solving industry-specific problems that your customers face, builds the trusted relationship.
These 7 powerful strategies will enable you to build lasting powerful relationships, improve customer retention and build sustainable profits.