There is a proverb that says “to keep a customer demands as much skill as to win one”. There are also claims that it costs six to seven times more to acquire a new customer than to keep the existing one. Although it is difficult to determine the origin of this assertion, business and market experts agree that retaining customers is as important as acquiring them for one very simple reason - losing them is a costly affair.
In 2013, The Economist Intelligence Unit conducted research with surprising results. Two thirds of the surveyed companies reported reduced profitability due to providing inadequate customer service, and 15% recorded a drastic drop in their share prices due to customer loss.
The reasons for doing your best to keep a customer are far too important to be ignored. For instance, your long-term customers don’t consider the price to be the main reason for buying, it is more difficult for your competitors to lure away a loyal customer, and your existing customers could encourage other potential customers to buy your product or service.
Five steps to retain your customers
In order to keep a customer, companies are required to go a step further and offer all-encompassing services that comprise of not only the basic services but also additional elements that customers might not expect. For example, a full-service restaurant does not only serve food but it also has a coffee shop, or a drinks lounge, or an in-house bakery.
Although there are many rules for retaining customers, the general consensus is that the following five are the most important:
1. Attend to the relationship with your customers on a regular basis – Don’t make your customers feel like they are just a number in your database. Try to develop a personal approach to each and every one of them to the best of your financial and other abilities. If you communicate with your customers regularly, they are more likely to stay your customers for long time and to be more forgiving of your mistakes. Proper communication with your customer base can include the simplest of gestures like wishing them a happy birthday with a personalized message.
2. Repetition / Don’t stop selling – After a first sale is made or service rendered, businesses tend to relax and even slack off. Do not assume that your customers will buy from you again just because they did it once before. Make sure that they are aware of the new products or services you offer (use the three words everybody likes – free, new and instantly), and thank them for their previous purchases. And by all means, make promises that you can keep!
3. How to win back lost customers? – This could prove to be the most difficult step to master because chances are that your ex-customers are probably unhappy with your product or service. The most important thing is to honestly admit that you made a mistake and find out why they decided to leave you. Consult your sales records and get thoroughly acquainted with their buying habits. Inform your customers of how you have improved the product or service that they were originally unsatisfied with. If possible, offer them a little bit more this time around.
4. Excellent customer service – Although you might think that this step is self-explanatory, you’d be surprised to hear that many businesses don’t have a clue what is meant by extraordinary customer service. Treat ALL of your customers well, not only those that make you the most money. Small and big clients are as equally important because they can both refer you. You should always respond to customers’ needs in a timely manner and listen intently to what they have to say. Don’t argue with your customers. Just focus on how to best resolve the problem to mutual satisfaction. Honour what you promised!
5. Ask for feedback – If you are unaware of what your customer thinks of your product or service, you might as well close your business right now. Your customers are the best judges of your business and they can offer the best advice on how to improve your offer. They’ll appreciate your interest in their opinion and you’ll benefit from their input. If you ask them for a feedback, make sure you let them know how you are going to use it.
Make your customers the focal point of your business and you are bound to reap rewards both in the shape of increased referrals and higher business volume.