In the effort to win new business, it's often easy to forget what a significant revenue stream existing customers can be. Here are five tips on customer retention:
In the effort to win new business, it's often easy to forget what a significant revenue stream existing customers can be.
1. Identify unsatisfied customers before they leave
Many companies don’t do anything about defecting customers until they announce their intention to leave. This leaves them with a reactive situation where they are forced to take drastic measures to get the customer to stay, and this is not always successful.
The key here is to find out which customers are the most likely to go elsewhere and why. For example, many customers threaten to leave a phone provider in order to get an upgraded mobile model or a better call plan. This could be pre-empted if the phone provider were to check its data to see who is using their account less and which customers have older phone models, as these are the most likely people to leave.
It it also worthwhile monitoring incoming communications from customers. Find out who has complained recently or given negative feedback, address the problems and get in touch with the customer to see how you can remedy the situation. If customers are taking the time to tell you they are unhappy, it probably means that they want you to something about it.
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2. Communicate with customers
There are lots of business situations where a customer buys a service or product and then never hears from the company until the time comes to re-purchase or renew. Keeping your business fresh by reminding customers why they bought with you in the first place can only serve to encourage loyalty.
However remember there is a fine line between effective communication and harassment...
3. Listen to the people on your front line
Who knows your customers better than the staff who work on the front line. They deal with the customers daily, they know what they want and don’t want and they know who's satisfied.
Arrange regular meetings with your front line staff to allow them to air anything they feel may be an issue and to update your marketing team with details on customer behaviour and attitude. Doing so will enable you to make more informed business decisions based around the needs of your customers.
4. Treat your most valuable customers like kings
There is a reason that investment bankers have such large expense accounts (or used to....) – simply that the level of relationship they have with their clients is the only thing stopping them switching to another company.
The customers that bring in the most revenue for you – whether loyal shoppers in your store or small businesses for whom you do the accounts – are the ones you should fix your efforts on in the first place. This may seem obvious but many businesses just assume that customers will stick around with no special treatment at all.
Customers like to feel valued, especially when they are parting with significant amounts of cash for your products or services. Doing so doesn’t take much extra effort or expenditure – it involved something as simple as having a phonecall to ‘catch up’.
5. Always be fair and honest
A hotel was reviewed a number of times on travel website TripAdvisor.com. Many of the reviews gave the hotel top marks and positive comments. However, one comment from a returning customer was extremely negative. They said that having been pleased with the hotel once before they called up at the last minute to see if there were any rooms available. The hotel said they had one room which would cost £100 for the night. On arrival at the hotel, the reception staff tried to charge the guest £150 for the room. Despite admitting that they quoted £100 over the phone, the hotel staff said that the cost had gone up due to a high demand for rooms.
Had the hotel stuck to its word, they would probably have had a loyal customer for life. But now it’s unlikely to have their custom again.
Always treat repeat customers fairly, even if it results in being slightly unfair to newer customers.
See also: Delight your customers