The steps to successful customer retention
Holding onto your customers is important. Not only does it help you generate revenue, it helps you trim your bottom line as well. Considering the amount of time, money and effort businesses put into sales and marketing, it only makes sense to try your hardest to hold onto clients.
According to Bain and Co., a 5% increase in customer retention can help boost a company’s profitability by as much as 75%. Yet many businesses seem to neglect customer retention. Sales people close the deal and head to the pub for a celebratory drink while the Services team crack on with delivery. The only effort to retain customers tends to come from the account managers, but even then it can be a little lacklustre.
A good customer retention programme also enhances your reputation as a trusted supplier. If your customers are happy enough to stay with you, they are more likely to recommend you to someone else. And in the era of social selling, a recommendation is worth its weight in gold!
With that in mind, let’s look at some top tips for retaining customers…
- Delight your customers from the beginning
The period immediately after closing the sale is one of the most important when it comes to customer retention. A lot of people feel buyer’s remorse after the deal is done, and if the reality of your product or service doesn’t live up to their expectations they might try and find a reason to get out of the deal.
Part of the problem stems from the disconnect between sales and services. Sales people frame the product or service in a particular way, depending on the challenges and objectives of the client. Professional Services tend to apply tried and tested approaches to deliver the product or service package. If these two approaches don’t align then the client may feel that they’ve been duped into buying something they didn’t want.
Overcoming this disconnect relies on sales sitting down with the services team and explaining not only the contents of the package sold but the way they framed the solution to the client: what the client wanted and how they intended the business to deliver on those promises.
It is also important for sales people to check in with end users once they’ve been on-boarded. Are they enjoying using the product? Is the service what they expected? Are they experiencing any difficulties?
You may end up discovering that the client is using your product incorrectly, or missing out on key features. A bit of training will help them make the most of your product and could turn an unhappy customer into a brand advocate, as well as making them feel looked after.
- Educate customers
Along with product training, you can add serious value as a brand by supplying a constant stream of educational resources. This education may help them utilise your product or service more effectively, or it may just help with the related work. Either way, regular educational resources help customers achieve their objectives and position your brand as helpful and client-focused.
Educational resources could be published through your blog or in whitepapers, or you could hold events like webinars and conferences. If you can track which customers are using what resources and how often, you will also get to know more about them – what their level of understanding is, what goals they are trying to achieve or challenges they’re trying to overcome.
This information is useful both for improving your product and service, and when it comes to upselling other products and services. According to Marketing Metrics, it’s 50% easier to sell to existing customers than to brand new prospects, while Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers. So look after them, keep them happy, and keep them productive.
- Quality communication
Every customer retention programme should include a frequent communications calendar – dates you will call, email, or otherwise make contact with customers. The very minimum you should be communicating with customers is once a quarter, but ideally it would be more often. It’s important, however, to take measure of what the client expects, wants, and is comfortable with. Some customers will need more hand-holding while others may consider regular communication intrusive.
As well as frequency, the other key factor in customer retention is the quality of communication. Quality communication means being personal and never being pushy. Sending them an email congratulating them on a promotion or marriage is personal, emailing them once a month asking if they would like to upgrade their package is not.
You can get a lot of information about your clients and their personal lives from social media. Nowadays people tend to post updates about their whole life, not just work. This information is a goldmine when you are looking for a way to personalise your communication, and it leads to great online relationships as well. Online relationships shouldn’t be overlooked – they are the next best thing to a real life relationship and are much more visible to the client’s network of friends and associates.
- Reach them on their preferred channel
Not all customers will read your blog or email newsletters, but each will have a preferred channel that they use every day. It pays to find out what that channel is and use it to speak specifically to that customer.
People in a busy client-facing role, for example, might be more willing to speak over the phone than to respond to an email. A millennial, however, might prefer to receive their communication via Twitter, thereby demonstrating their importance to their network. While a very techie person may appreciate having the time afforded to them by email to gather their thoughts and evidence before responding.
Everyone has different preferences for different reasons. Don’t make any assumptions, make sure you find out. Check their Twitter account, make note of how often they call you and how comfortable they are on the phone, use a tool like Sidekick to monitor how fast they read and respond to emails. The information is out there, it just requires some searching and testing to pin down.
- Demonstrate the ‘why’ behind your business
Renowned business author and regular TED presenter Simon Sinek says that all business should start with the ‘why’ – the belief behind the business that motivates everyone who works there. He usually applies this thinking to leadership to help define an inspirational leader, but it’s a powerful concept to apply across the whole of your business.
People like to do business with people who believe what they believe. If you demonstrate the core beliefs lying at the heart of your business then you’ll gain a band of loyal followers. The example Sinek often uses is Apple Inc.
Ostensibly Apple make personal computers, but that description doesn’t really go far enough to sum up the brand. Dell sell personal computers, but they don’t have the same loyal brand advocates Apple do. No one camps out for two days to buy the latest Dell computer, like people do every time a new iPhone is launched.
For Apple, the ‘why’ is creating products which are different. They look different, they work differently, even the way they are conceived is different. Apple aren’t happy to accept the status quo – they will challenge it at every turn – and that idea is conveyed in every product they produce.
What is the core belief that drives everything you do? What makes your business different?
If you can answer these questions and communicate the answer in every communication, design feature, and aspect of your service, you will embody a strong brand image and generate loyal brand advocates.
Watch Simon Sinek explain his concept at his TEDx talk:
- Extraordinary customer service
Most businesses seem to assume that if a client leaves it is probably because they found a competitor who offered a cheaper service. It makes them feel better about their business, like a comfort blanket; it’s nothing they did wrong, it was some dastardly thief stealing the client away.
Well sorry to rip that comfort blanket away, but the reverse is more often true. Of the clients who leave, only 9% decide to use a competitor and 14% are unhappy with the product or service. The vast majority – 68% of customers – leave because they are unhappy with the service they receive.
Does that mean businesses are deluded, that they fall victim of wishful thinking? Well, yes. According to statistics from Bain and Co. in the Harvard Management Update, 80% of companies said that they offer superior customer service, yet only 8% of their customers agreed with them.
Extraordinary customer service shouldn’t just be expected of account managers, it should be practice embedded into all levels of your business at all times. Everyone from the operational team to the CEO should be the very embodiment of excellent customer service – even your product itself should provide great service to your customers.
- Facilitate complaints
This might sound like an odd customer retention strategy – actually facilitating complaints. However, when you consider that 96% of clients won’t complain before they walk away, eliciting feedback is potentially one of the most powerful customer retention strategies on this list.
Customers should feel comfortable coming to you with problems and things they are dissatisfied with and having their voice heard, accepted, and their problem overcome. Otherwise they will bottle it all up, creating resentment throughout their organisation and leading to either a blow out, a lost customer, or both.
If things do go wrong, as they inevitably will, it is useful to keep in mind The Disney Institute’s acronym for customer service recovery: H.E.A.R.D.
Hear: Let the customer tell their entire story without interruption. Sometimes, customers just want someone to listen to their woes.
Empathise: Convey how deeply you understand the customer’s feelings, “That sounds frustrating” or “I would have found that pretty annoying too”, for example.
Apologise: Be sincere. Even if you weren’t responsible for whatever made them upset, you can still be genuinely sorry for how your customer feels (e.g. “I’m so sorry you feel let down”).
Resolve: Resolve the issue quickly, or make sure that your employees have the power to do so. Don’t be afraid to ask the customer: “What can I do to make this right?”
Diagnose: Get to the bottom of why the mistake occurred, without blaming anyone; focus on fixing the process so that it doesn’t happen again.
Keeping your customers is vital to the success of any business and here at Artesian we celebrate our 94% retention rate whilst continually working to improve it. Learn how you can use Artesian to grow and nurture your customer relationships here.