Keep ‘em coming back: Keys to customer retention
If you had the choice, would you prefer to continue doing business with an existing customer or would you rather go out and find a new customer?
For most small businesses, the choice is easy. Conventional wisdom says it’s more profitable to keep an existing customer than to start a relationship with a new customer because you’ve already invested in building the relationship.
What can you do to keep your current customers coming back? Whether you’re new to the customer retention conversation or looking for a quick refresher, we’ve pulled together some keys to customer retention.
Get a baseline measurement.
Want to get a baseline measurement of your current customer retention? If you haven’t already done this, here is a simple calculation to get you started:
Total number of customers – number of customers lost
Total number of customers
You can do this for your overall customer base or for key target audiences. Once you have this number, you can set your customer retention goal.
Go beyond satisfaction.
There is a big difference between customers being satisfied and staying with you. For example, only 17% of satisfied customers of financial institutions claimed that they would not entertain a competing offer. That’s why it’s important to use customer retention surveys to measure more than satisfaction. What more can you do? Check in not only at the time of purchase but also afterward. Determine how long it takes for a customer to really get familiar with your product or service. Send a follow-up survey timed appropriately. Let customers know you value their input by including the Screen Sweep Letter Opener Combo with a print survey or offering the Contrast Zippered Convention Tote or Nylon Drawstring Sportpack for completion of an online survey.
By learning whether your customers continue to believe they made a good choice, you’ll learn how likely it is they will stay with you. If they’ve had a post-purchase change of heart, it’s time to act and address their concerns. Even if you’re not counting on them to buy again, you want to make sure any potential referrals they make are positive.
Look for customers who appear to be reconsidering and develop promotions to stop them.
What causes customers to look at your competitors? It’s likely a combination of internal and external factors. According to the Qualtrics Wiki on Customer Retention, poor service, the lack of personalization, cost/value breakdown, outdated customer information, competitor superiority or changes in needs are the factors that push customers to shop around. Despite the current economic woes, having the lowest price isn’t good enough for many consumers. A J.D. Power and Associates’ report from last fall – after the economy tanked – found that Canadians value customer service more than price when it comes to their insurance providers. In fact, customer service accounts for 38% of satisfaction, while price accounts for only 17%. You’d be wise to make sure your service levels are up to par so your customers don’t start looking elsewhere. If you find customers looking at other options, it’s time to act. Determine what is driving them to look around – price, service or something else. This is the perfect time for a promotion targeting their concerns.
Explore why current customers leave and act on what you learn.
Though we might wish it didn’t happen, we all lose a customer at some point. If you do, consider finding ways to learn from the loss. Some firms will conduct ‘exit interviews’ with customers to identify what factors led them to leave. Invite them to participate by sending a Gourmet Coffee Pouch – Ground and asking them to chat for a few moments. After your visit, send a Mini Snap-it Tin with Sugarfree Mints to thank them for sharing their fresh perspective. If the exit interview uncovers issues about your product or service that you can fix, do so. Let any customers who left because of the issue know you’ve done so. This may be all it takes to bring them back to you.
Keep front-line staff in the loop.
Successful customer retention programs keep front-line staff in the loop, because their day-to-day interactions directly influence a customer’s experience. Keep customer retention top-of-mind among front-line staff by distributing the Notepad with Pen – Translucent and asking them to note customer retention success stories and concerns. Personally praise and professionally reward front-line staff members who go above and beyond in serving customers or identifying potential problems.
Customer retention can be an important complement to existing marketing efforts. By getting a baseline measurement, setting retention goals and focusing promotions and improvement efforts on keeping customers with you, you’ll be well on your way to keeping your current customers. And, all of your efforts may just bring new customers in, too!