Are you spending a lot of your efforts and resources on attracting new customers to your business?
Do you feel that you are not paying enough attention to your existing customers in this effort?
You are not alone.
While the probability of selling to an existing customer is 60-70% and one of selling to a new prospect is only 5% to 20%, many companies are not spending enough focus on customer retention and not utilising existing relationships to build their business.
Increasing customer retention by 5% increases profits by 20-90%. But companies continue to overlook the importance of retention strategies. This is due because more focus is given to getting and attracting new customers due to the assumption that current customers are here to stay. Not enough offers, little to no loyalty programmes, very little encouragement given to promoters, and not enough consultation with current clients when launching new products and services are some of the reasons why existing customers look for and jump at other options. Marketing also focuses on attracting new clients which leaves the door wide open for existing customers to leave.
So what are some of the ways in which companies can improve their customer retention?
- Listening: Customers need to feel heard, cared for, and appreciated. The culture of listening is critical, especially in times like this when we do most things on the go. Customers feel appreciated when they are being provided a solution and when the item/service they received/purchased is adding value to their day-to-day lives, saving time/money/energy. Customers make purchasing decisions based on different factors including first impression, the familiarity of location (look-alike stores – the overall workflow), front line employees (interaction with knowledgeable/resourceful employees), and follow-up.
- Treating customers right: Listening to feedback from existing customers is key to creating a promoter. But customer service is the key to lowering churn and maximising the profit margin by up-selling and providing solutions to everyday challenges. Loyal customers, when treated right, are the gem of the company. They are the ones who are always first in line to buy new product lines, new services, and upgrade their current plan/equipment. Appreciating each customer, paying attention to detail, customising their experience, and not assuming they want a one-size fit all type of treatment are key factors that will create a lasting/loyal customer.
- Inclusive environment: Inclusive environment where employees and customers feel they are always welcome and not just during the initial phase, empowered employees with a sense of ownership and stake in the success of the company, and quality of service, network, and product are some of the factors that affect customer experience. Companies also need to focus on diversity and inclusion as it plays a critical role in making the customer and employees feel included in the success of the company. Making them part of the success story is one way of winning their hearts, so they stay brand loyal and continue to advocate to their circle of friends.
- Using tools: New tools and techniques are emerging to automate customer retention steps such as personalizing the service, setting customer expectations right, gamification (points per referral), customized onboarding process (short introductory courses for the product or services), CSR, surveys, surprise appreciation and over-deliver on promises.
Customer retention is an all-rounded investment in the overall customer experience to make sure you create a brand ambassador out of each customer. Each interaction leaves a mark on how the customer perceives the service and the company. Getting a customer and closing a sale might be easy compared to maintaining the same level of experience the customer is expecting to receive.
If you enjoyed reading this report and would like to find out how we can help you design better customer retention plans, please reach out to us on email@example.com to book an assessment of your company’s customer service.