Making your business stand out from the crowd and giving your customers a compelling reason not to leave you for a competitor is one of the toughest challenges business owners face.
It’s often said that it’s cheaper to retain a customer than it is to go out and attract a new one. That’s not an unfounded fact: research says the likelihood of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer. What’s more, some research says that once a customer leaves, 4 in 5 say they will never come back
As such, keeping your customers happy should be a top priority. We spoke to Ben Gunn, a Retentions Specialist, who summed up some of the essential elements of customer retention strategy.
Customer retention rate is “the measure of business health,” says Ben. “Although customers often base a decision on price, offering and maintaining a good level of service” is an indicator of a successful customer retention strategy.
First things first, it’s important to recognise when and why your customer is unhappy with the service they’ve received. According to Ben, it’s important to “sympathise and apologise where necessary, and listen to the customers’ needs and understand the problem.”
The likelihood of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer. What’s more, once a customer leaves, 4 in 5 say they will never come back.
The next step in the retention process is to offer a resolution, “linked to a contract where possible”. This compromise is important, as it helps to keep your customer happy while also retaining their custom; a win-win situation. This is a better solution than letting your customer walk away or turn to a competitor.
“My personal experience of Customer Retention is that people like to know their custom is valued. The best way to do that is by reaching out to all of your customers regardless and having that conversation with them.”
Doing so will allow you to establish and build a good relationship moving forward.
Where there are specific issues which are causing friction with a customer, offering a compromise and being willing to negotiate shows that you value their custom. If customers are unhappy with the pricing of a contract or service, for example, Ben advises that you take a proactive approach: “It’s often necessary to start from a low price point.”
However, shifting the customer’s focus can help. “The ability to offer an alternative reason to stay can take the focus off pricing issues,” says Ben.
People like to know that their custom is valued. The best way to do that is by reaching out to all of your customers, regardless of whether you are selling or where they are in their contract, and having a conversation with them.
Although every case is unique, there are some general rules to follow which will help you to resolve every incident. Listening carefully and being understanding throughout the process is essential. Ben recommends having a robust system in place to ensure that you can deal with dissatisfied customers in important, too. Investing in Customer Relationship Management (CRM) software can be good for tracking both customer complaints and new business opportunities.
A system for customer retention also gives you the opportunity to follow up with customers to ensure that they’re happy with their resolution, which is an important step when it comes to improving the customer experience throughout the whole customer journey.
Finally, good teamwork is “essential” for successful customer retention, as it allows people to share ideas and creates a supportive environment.
So what can you take from the above? Here’s a summary of some of the key elements that can help you to develop a successful CR strategy.
If a customer is unhappy, there may be an issue on your side; identifying and resolving failures is the first step to retaining a valued customer.
Systems and processes
Having good systems in place to identify customer dissatisfaction, and process to resolve complaints.
Unfortunately, there is no one-size-fits-all approach. While it’s important to have systems in place, they’re not fool-proof. Flexibility, being able to use initiative and offer alternative resolutions will help.
Bringing together your team to celebrate successes and achievements, as well as supporting each other’s development and learning to continually improve your processes.