The name of the game in business is acquiring and keeping customers. This two-pronged mission is the lifeblood on which all businesses thrive. Minus customers, there is no business.
The Impact of Customer Retention
Loyal customers are the biggest single avenue for growing the customer base. The aim is to increase customers through the company’s greatest ambassadors to the rest of the target market. Every company’s greatest ambassadors are its current customers.
It has been shown that a company who grows its customer base by 20% annually while losing 15% of its existing customers, whittles that impressive growth rate down to just 5% annually. However, at just a 5% annual growth rate, in five years, the company will have a net growth increase of 25%. That is substantial growth. However, if the retention rate can be increased by just 10%, from 85% to 95%, that growth rate triples.
The Art of Customer Retention
o Give great service.
Customers generally know that products may break or fail. The issue is not that the product failed or in some way disappointed. The issue is how the company responded to their disappointment. Poor customer treatment is the make or break issue. 70% of customers leave a business based on what they perceived as poor service,
Basically, the hue and cry from the public is, service what you sell me, and I am yours for life. Fail to service what I buy from you and lose me as a customer. To dramatically improve customer retention rate, train the customer service department to serve the customer’s needs. Quick responses tell consumers they are important, and the company works hard to earn their confidence.
o Give the customer a voice.
Train the service department to be good listeners first. Most customers prefer to do business with companies who are willing to listen when problems arise.
They want to be heard and responded to in a positive way. A customer becomes a loyal customer based on whether or not they have a reassuring exchange about resolving an issue.
o Offer return policies and guarantees.
Sometimes a customer makes a mistake and orders a product they really did not want to begin with. Make sure your buyers know they can return products for full refunds if they are not pleased for any reason.
Guarantees are also an important reassurance to the customer. Offer product guarantees and stand by them. They only enhance your consumer reputation.
o Stay current electronically.
Websites, limited self-service and delivery systems need to keep up with improving technology. If your technology is five or more years old, update it. Customers have come to expect quicker, more efficient order fills and product deliveries. Consider adding CRM (Customer Relationship Management) software to your customer service training.
o Set up a customer reminder system.
Customers appreciate recognition of special days in their lives. Develop an email system to recognize birthdays, weddings and other special events in the lives of your loyal patrons.
o Develop a loyal customer reward system.
Offer special discounts, give away free novelties with your company logo on them. Combine these rewards with the special days in customers’ lives.
o Design questionnaires and surveys.
Solicit consumer responses about your quality of service. Ask for areas of improvement and other quality consumer goods they would like to see you offer.
Encourage dialogue and solicit customer satisfaction ratings for each phase of customer interaction. Give Thank You rewards for completing them. Always attach a reward to everything you ask your regular customers to help you with.
o Thank your customers.
Let your customers know you appreciate them. Do so on a regular basis. Make your expression of thanks sincere and name the specific thing you are thanking them for. Never send out a generic, perfunctory thank-you.