Companies seem to devote most of their time and efforts to new business, persuading prospects to come on board to sample their products or services. Few seem to devote an equal amount of time to the retention of existing customers. If they took the time to analyze their records they might see that the amount of revenue gained from existing customers will continue to increase as time goes by, when expressed as a percentage of total income. This means that if you retain the loyalty of your best customers you can effectively decrease your overall advertising spend as you will not have to dedicate as many of your valuable resources to the scattershot approach.
Whilst in the early days of any business the objective is to get clients, you need to ensure that you are also over performing when you receive these customers. You must “under promise and over deliver” in all cases, so that the client is more than happy with his or her experience. Understand, however, that you can never please everyone all of the time and you will certainly have your ups and downs when it comes to client interaction. However, you should structure your company so that CRM – client relationship marketing – is to the fore.
Make sure that your staff are all empowered to do whatever it takes to ensure customer retention. You should allocate dedicated funds to the improvement of CRM. Make sure that you can over deliver and do so on a regular basis.
If you understand that, in an established business, it is typical for as much as 50% of your revenue to come from just 10 to 15% of your customers, then you will see that you need to maintain that level of loyalty at any cost. Focus on exactly what the customers want and give it to them and make sure that you know who your better customers are. Be prepared to make some sacrifices if need be, by even getting rid of some clients who are more trouble than they are worth.
A happy customer will likely provide you with referrals, either with or without prompting. This is of course highly valuable, as word-of-mouth is one of the keys to building a successful business. We have all heard of the term “social proof” and you should make sure that, with your customer’s approval, you make best use of testimonials, endorsements and referrals through social networking and advertising.
In marketing dollars it costs far more to try and replace a lost client so you should dedicate good resources to keeping those hard-won customers.
How do you make sure that you are keeping your customers happy?
Matthew Toren
