I work with many business owners who are very often so focused on customer acquisition that they forget about how important and cost-effective customer retention is. According to the Harvard Business Review, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. Research by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by 5% increases profits by 25% to 95%.
One strategic business approach that I often recommend is to go deeper with the clients you have rather than invest the time to attain new ones. I’ve outlined below several tips to help you improve your customer retention rate:
Are your customers leaving you? If you want to improve your customer retention rate, you need to be aware of how many customers are leaving (the churn rate) and determine what is causing them to leave. Ask yourself what as a company you are doing that is causing your customers to leave.
Customers don’t buy from companies; they buy from people. 60% of all customers stop dealing with a company because of what they perceive as indifference on the part of salespeople (Peppers and Rogers Group). Have your salespeople become complacent? Are you making an effort to make your customers feel valued or do you take them for granted? Are you rewarding your loyal customers for their business?
Listen to your customers. Talk to your customers – after all, they chose you. Invest the time to ask them how they feel about your products/services. Understand what they are looking for and what their plans are for the future. Personal relationships are powerful and inspire loyalty. The customer experience is key to your success.
It’s not all about price. Companies are often totally focused on being the lowest cost provider. While being competitively priced is very important, there will always be someone who can come in at a lower price. Price alone won’t keep your customers; delivering the best value will. Value is a combination of price, trust, customer service, delivery, relationships and support.
Has your company lived up to expectations? It’s one thing to win the business; it’s another thing to keep it. Make sure your brand has delivered on its promise and your product/service meet or exceed expectations. Take a look at creating a great customer experience. Managing customer expectations is an important part of customer retention. Set realistic expectations. It’s better to under-promise and over-deliver.
Communicate! Communicate! Communicate! Communicating with your customers will keep you top of mind. Remember, there is always going to be someone lurking in the wings to swoop in and steal your business. Find out how often and by what channels your customers want to receive information. Always address your customers’ concerns immediately. If you make a mistake, own it and fix it. Your customers will appreciate your honesty and your efforts.
Do you prize deliverables over results? Every deliverable must be able to show a measurable result that will positively impact your customers’ business and help them achieve their goals and objectives.
Bonus Tip: Conduct an exit interview. There is no company in the world that retains 100% of their customers, no matter how good they are. If one of your customers is leaving, take it as an opportunity to improve. Conduct an exit interview to learn why they’re leaving. This information is extremely valuable and can help you to make changes in order to avoid a similar situation in the future.
Are your customers leaving you? Want more advice on customer retention, or general advice from other business owners like you? Find out if a TAB Board is right for you!
The Customer Relationship Management industry (CRM) has exploded. It’s estimated that 91% of business with more than 11 employees now use a CRM system. CRM is a term that refers to the strategies, technology, and practices that companies incorporate into their business to manage and analyze customer interactions and data. However, many businesses are not realizing the full benefits of CRM because they’re entirely focused on the data and ignore the human side of CRM. The data will tell you how to manage customers, but not how to build relationships with them. Computers don’t build relationships; people do.
In today’s highly competitive marketplace, the success of your business depends upon delivering customer-focused experiences and processes. I have outlined below a few tips I’d recommend for staying focused on the human side of CRM.
Don’t overlook the human side of CRM
“Helping is the new selling” are the latest buzzwords being bantered around these days. It speaks to relationships and a service-oriented mindset. Although CRM has the potential to provide deep insight into both individual clients and general trends, it’s imperative that you connect and engage with your customers in a meaningful way or you diminish the value of your CRM system. No amount of data can provide the human touch.
Implementing a CRM system doesn’t automatically deliver results
Databases full of client information are the basis on which to improve customer engagement, but never lose sight of the relationship-side of technology. The success of your business depends on the human element.
This is crucial in any industry. Your sales team are the ones that can help your organization achieve its revenue goals. The human interaction between your salespeople and your customers is what will ultimately differentiate you from your competition, and bring them back again.
This skill is highly underrated. Do your sales people listen? Do they understand what your customers value? Can they educate and inform? Can they close the deal?
In order for CRM to deliver on its promise, ensure that the data and the human element are fully integrated.
Want more advice on how to get the most out of your CRM system, or general advice from other business owners like you? Find out if a TAB Board is right for you.
Customer retention relies heavily on customer experience, which is why it’s so important for business owners to really hone in on what will make their customers have a positive experience when interacting with their business.
Regardless of the size of your business, you can all take steps to ensure our number one asset – our customers – are happy. Here are a few key tips to help you improve that experience for your customers:
One of the most important ways to keep your customers is to keep in touch with them on a regular basis, whether that is through daily/weekly/bi-weekly calls, meetings, or emails, you need to make an effort to touch base with your clients. These are not sales calls, but rather opportunities to hear more about recent triumphs or challenges they are having in their business. The more you know about their business, the better able you are to serve them. When you listen, a customer feels heard.
Good As Your Word
A common complaint of customers is that business staff do not follow through on promises they make. When you tell a customer that you will email them a document by noon, for example, and they have not heard from you by the next day, they might feel that they are not a priority. Every customer wants to feel as if they are the only ones you take care of, so when you say that you will meet a deadline or deliver a report and not do so, nor call to explain why, they are left in the dark and this is when they are telling others about the poor service they are receiving from your business.
Thanking Them Differently
When a customer has purchased your product or service, particularly an expensive one, be sure to thank them in appreciation, ultimately for their choosing to work with you and not your competition. A phone call or handwritten card with the express purpose of saying thanks will be appreciated, but think of taking it to another level through a congratulatory lunch or a basket of sweets delivered to their home or business. You will be remembered, talked about favourably to your customer’s contacts, and will likely receive repeat business.
Access and Availability
If the main contact number to your company goes straight to voicemail or is automated, this could result in an unfavourable experience for your customer. You want to always make sure they feel that their business is important. You might want to consider:
- Forwarding the main line to one of your customer service reps or an executive assistant
- Make sure your automated system provides a directory with your employees’ names and extensions
- Create a company-wide policy on returning voicemails in a timely manner e.g. calls are to be returned within 24 hours
With so much business happening online today, it is important to set out clear expectations for your customers in terms of how to reach you and when. You might want to consider:
- Making sure your website clearly states your hours of operation
- Adding a simple contact form on your site with a specified time that a company rep will respond, or adding an online chat for immediate answers to any customer questions
- Adding a cell number to your email signature for any immediate calls
- Creating an email policy for your staff to ensure emails are returned to customers in a timely manner e.g. within 30 minutes
The key to customer retention is to strengthen your relationships at every contact point and to be mindful of not alienating them along the way.
As a business advisor, I know that business owners and senior level managers understand how critical their customers are to the success of their business, which is why ensuring you are providing superior customer service needs to be at the top of the list.
Whether you have a 5-person team or a 100-person team, how you answer the phone, how quickly you respond to their questions, how you address their concerns and whether you give them the ability to escalate their issue can mean the difference between gaining a loyal customer and losing one.
In a world that is dealing with more online purchases, online chats, 1-800 numbers, and less and less face-to-face communication, it is now more important than ever that you have a solid customer service process.
I’ve outlined below a few key steps to help you create a solid customer service process for your business and ensure your customers have a positive customer service experiences, which inspires them to be loyal to your business.
- Empower Your Employees
The more empowered your employees are to handle certain types of issues; the less involvement is required on your part. Empowerment can be accomplished through:
- Training: Provide training for the decision makers and the front line staff. Employees should receive the training necessary for them to resolve issues, such as conflict-resolution skills.
- Clear and expanded roles: It’s important that your employees have a clear understanding of their roles, and what falls within their capacity. They need to know what is okay to approve and what is not. For example, they can offer a free month of services up to $50.
- Have A Clear Process Of Escalation
Think about your processes. Create a process so that a call or complaint can be escalated to a decision-maker. As customers ourselves, we have often asked the question: Can I speak to someone in charge? It’s a question that arises when customers feel unsatisfied with the frontline’s attempt to resolve their issue. As a customer, you feel relevant and appreciated when your call is handled by a decision-maker. That is at the heart of great customer service. The reason this is so important is that often, frontline staff are constrained in making any decisions without approval. The decision-maker is more experienced and can use judgment in resolving the issue.
- Make sure it is timely: The sooner a call or complaint can be escalated, the sooner it can be resolved, and the sooner the customer is satisfied.
- Make sure it is smooth: The customer should be able to be transferred to your decision-maker without having to go through unnecessary steps.
- Measure and Adjust
This is a step that I find even businesses with a strong customer service orientation sometimes overlook. In order to get a firm and tangible understanding of how your customer service is handling your customers, you’ll need to have:
- Follow-up: Create a follow-up process. E.g. After a customer has interacted with your customer service team, an email is sent to them, or a phone call is made to the customer to confirm that they were satisfied.
- Document: Documenting your escalated accounts will help you not only perfect your process, but it will also make for a great source of training in the future. You should be able to look at the number of incidents on a spreadsheet to see how the team is performing.
Do you have a good customer service process? What does good customer service mean for your business?
Building strong business relationships seems quite simple, but actually requires a lot of time, effort and tact. The key to building lasting and successful business relationships with your clients is to provide real value to them on an ongoing basis. In other words, you have to help your clients see that there’s more to your relationship than a financial transaction.
Developing and maintaining these connections can be challenging at times, but I’ve found the rewards are well worth it. A personal relationship, whether developed over days, weeks, months, or years, can lead to more connections, positive referrals, increased sales, and a general sense of fulfillment.
The following tips should help you strengthen and build rock-solid business relationships with your clients:
- Treat others the way you want to be treated. This is possibly the most obvious suggestion, and often the most forgotten. Put yourself in the other person’s shoes and provide the same level of respect and services that you would expect from someone else.
- Pay attention to body language. People can tell, consciously and subconsciously, how you feel about them. Keeping your arms and legs uncrossed, smiling, and making eye contact are simple ways to keep clients engaged and feeling at ease during meetings. I find the best tactic is to be yourself and not overthink things.
- Honesty is key. Like any other relationship, your business relationship won’t survive if you aren’t honest with each other. Clients are smart and know when they are being manipulated. Being open and honest in all aspects of business is critical, and to cultivate the kind of long-term relationships your business’ success depends on, you should build a reputation with integrity. Keep in mind that meaningful relationships (business or otherwise) take a substantial amount of time to develop and only a moment to destroy. White lies can damage your reputation, so take a genuine interest in the relationship and the rest will take care of itself.
- Be a useful resource. The more value you offer to clients, the more they will depend on you. Provide information clients may find useful, whether or not it benefits you. With that being said, don’t waste their time by sharing irrelevant news and offers you know wouldn’t appeal to them.
- Manage time well and always meet deadlines. Getting work finished well and on time is fundamental to maintaining strong client relationships. When you say you’re going to do something, do it – there should be no questions in your client’s mind that this may not be true. That freedom from worry helps build trust, and clients will stick with you if they can rely on you.
- Think of clients as more than just “clients” – think of them as people! Every client has his or her own likes, dislikes, preferences, issues, concerns and opinions. Your bond with your client will grow the more genuinely interested you are.
- Reward loyal clients. It’s easy to make the mistake of growing complacent with existing relationships and focus efforts on acquiring new clients. Rather than leaving old relationships to get stale, honour clients for their loyalty and business by giving them the treatment they deserve. Whether it is through reward programs, exclusive discounts, charity donations, or tickets to a basketball game, find a way to say “Thank you for your continued and highly valued business.”
- Be more than an email address. Email may be quick, but it’s also impersonal. Try a phone call, Skype chat, or set up an in-person meeting to bond with clients.
- Keep things light. At the end of the day, it’s all about connecting. Make clients feel more comfortable by joking around with them, and if you don’t know their sense of humour just yet, you can always poke fun at yourself to lighten the mood!
Do you have any client relationship building tips you’d like to share? I’d love to hear your ideas and about your experiences, so share them with me in the comment section!
Boosting Team Morale During the Holidays!
The holidays are fast approaching, and while it is a very happy and exciting time, it also is a period of high stress for many! With lots of shopping to be done and countless holiday functions to attend with family, friends, and work, the holidays can be quite an overwhelming time.
At this time of year, I’m often asked how employers can keep their employees motivated and energized during the busy build-up to the holiday season. While you can’t control what is happening in the lives of your employees outside of the office, there are a few things you can do for them at work to boost office morale, such as:
- Acknowledge accomplishments/hard work.
- Creating an encouraging environment that recognizes the hard work of your employees will remind them that they are appreciated and their work is valued. They are less likely to let their work suffer during a busy time when they know their impact is important!
- Allow for time-off if employees are overwhelmed.
- If you recognize your employees are overwhelmed, granting an hour or two for personal time can go a long way in helping them focus on their work for the time they are in the office. Their productivity won’t be as great if they are thinking of the million things they have to do when they’re off the clock.
- Offer rewards and personal perks.
- Incentives will keep everyone determined and engaged – and a little friendly competition doesn’t hurt! Setting attainable goals will push your employees in a positive way.
- Keep things fun!
- Ensuring your workplace environment has an element of fun to it is important – nobody works well in a perpetually boring atmosphere! Allow your employees to have fun with one another in a common space, like a lunchroom, and they’ll be able to focus better when at their desks.
While it is inevitable your employees will suffer a “spring fever” type syndrome due to the holiday season, these small tips will help keep everyone on track and productive!
Do you have any tips for keeping your team engaged during busy and overwhelming times of the year? I’d like to hear from you! Let me know in the comments.