Studies across a number of industries have revealed that the cost of keeping an existing customer is around 10% of the cost of acquiring a new one, so building strong, lasting relationships with customers is crucial.
The main thing to understand is that customers expect more today than ever before and therefore demand a higher level of service. With more control in the customer's hands, they have the freedom of choice to separate themselves from any business that fails to deliver. Building and keeping loyalty can be achieved by:
- Building trust through relationships and expertise
- Anticipating problems
- Saying thank you
- Using customer feedback to improve
Having an understanding of how to achieve these steps will mean that you can concentrate on retention and building relationships with customers that keep your business growing.
Build trust through relationships and expertise
Showing customers that your business is something they want to be involved in, in terms of both trust and expertise, is central to retaining loyalty.
Shared values can be demonstrated in many ways but a great way is to work out your customers’ USPs, and demonstrate ways in which your business can play to their strengths. By showing you have a great understanding of their needs, and how your services or products can help, you become invaluable to them.
If your business is B2B focused, then you need to understand the buying cycle and how it requires multiple contact points within the company. Work as hard as you can to keep channels open, remembering that you will want to be able to engage with the decision makers of a business. MarketingProfs 'reported that after Oracle began actively engaging with decision makers within its client base, its customer retention rate was more than 20% greater.'
It is important to have your social media channels open to customers, so they are able to voice any concerns or questions. Ensure that you reply to these promptly as ‘80 percent of customers expect a response to their social media queries within 24 hours’.
Lastly, to demonstrate the knowledge and expertise of your employees, maintain an informative and interesting blog on your website. When people trust your news and advice, they will also be more likely to trust your business.
Being organized and anticipating problems that may occur with customers will also help build trust.
If you offer a service, such as IT, make sure to schedule regular check-ups, which will hopefully prevent any major issues. Whatever the service you provide, make sure to communicate with the people in the customer business and check that everything is going well. You want to be able to feel like you are on top of things, and reassure them that everything is running smoothly.
As is one of Apple’s key mottos, you need to ‘listen for and resolve expressed and unexpressed needs’. Every business has worries and anxieties, but if you have the foresight to see problems before they arise, you will be rewarded.
Say thank you
Thanking your customers is an important part of keeping them happy and there are many ways you can do this. One good idea is to give them something that they will value in business terms; maybe involve them in meetings about your latest products, and keep them in the loop on any offers, as well as making sure to refer as much business as possible to them (as long as this doesn’t detract from your own business).
Other good ideas include charitable donations made in their name. This is especially good since it demonstrates your business has a philanthropic side to it, and businesses with a strong ethos will be encouraged to work with you. You could give a gift which demonstrates your creativity as a business, for example FedEx once gave a number of customers a chance to take a flight in a new plane they were using – this is obviously a particularly extravagant example, and most firms don’t have planes to hand, but you get the idea – think outside the box!
You may decide to keep it simple with a note; thanking customers for their business will always be appreciated. In the end, it is about demonstrating to your customers that they (and their business) are valued within your company.
Use customer feedback to improve
Ultimately, you will only be able to work out which of your retention schemes and practices are working if you ask customers themselves. Qualtrics 'defines customer retention as being individualized and varied across the kind of product or service provided, the kinds and number of customers served, the longevity and frequency of customer/supplier interactions, and the strategies you have chosen to grow your business' – so it may take some time to understand which tactics your customers respond to, but asking them is always a good place to start. Do so in three stages:
- Monitor feedback on an individual level, narrowing data down to a specific client, working out what the client thought and taking action from it.
- Look at feedback across a period of time; you should be able to track from survey to survey, to see what has gone well and what has not.
- Use your data to define which areas and customers are at risk. It is important that you are able to target which areas of your customer retention program aren’t working.
In using these strategies, you should be able to increase customer retention in your business, eliminating costs associated with constantly having to attract new customers, as well as building strong business relationships, which will help your company to flourish.