In any business the cost of losing customers is dangerously high and negatively impacts the entire company, which is why it’s more profitable to expend your efforts on retaining existing clients.
It is a well-known fact that it takes more resources and time (and in addition can cost 5x more) to acquire a new customer than to keep an existing one. In a study by Harvard Business School, it was found that increasing customer retention by even 5% can increase profits between 25-95%. So why are all of these companies spending more time and money constantly trying to attract new customers but less effort goes into figuring out why they lose customers?
This subject has always been high ranking to me. I learned from my first job right through to my last job that if I just took the time to make sure my customers knew they were truly important to me, they would continue to want to do business with me (even if the service or product was not the lowest price available). Here is a quote I think sums retention up best:
Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you. ~ Chip Bell
I have no doubt that companies will one day evolve the full set of processes and strategies needed to create positive retention. Until then, these four forms can get you moving in the right direction:
1. Meeting and Exceeding Customer Expectations
- When you are able to accurately identify and adequately meet your customers’ expectations, your customer service reputation will automatically be enhanced. Survey your customers, they will share a lot about what they need or want in order to keep coming back. Talk to your customers face to face or over the phone. Surveys alone will not tell you everything.
2. Finding Ways to Add Value
- If you want to stand out, you have to “plus” whatever you are doing so that your customer perceives you and what you offer as being superior to that of your competitors. Create your own value added services such as offering free coffee or tea, running contests, sending personal thank you cards, or offer a discount to long term customers.
3. Creating Social and Structural bonds
- The company should try to begin a long standing commitment. In order to create bonds in business, you must embrace the customer for the whole lifecycle. Making the sale is the beginning of the relationship. Treat the act of keeping your customers as important as getting them! Invite customers to company functions, create forums for customer participation.
4. Building Customer Engagement
- Customer Engagement is an on-going dialogue. It means listening to customers and making them feel that they truly matter. It is important to relate to our customers on a personal level and reach out to them on a regular basis to find out what they like or what you can improve on. Determine whether a loyalty program might work well, which could also increase you revenue. If customers become friends, they recommend you.
Georganne Ford is the owner of By George Coaching/Consulting, a Bucks County based leadership and personal development coach accredited through the Coach Training Institute. To learn more about Georganne or her services, visit www.bygeorgecoaching.com or call 215-738-5289.