Why retention is the new loyalty
Customers pay the bills and without them you’re dead in the water. But in the relentless endeavour to add more customers into the funnel, are you actually ignoring your biggest area for growth in revenue and profit…your existing customers?
Here are just a few stats from Gartner, Bain & Co and others:
- Repeat customers spend 33% more than new ones
- Companies that prioritise the customer experience generate 60% higher profits than their competitors
- A commitment to customer experience results in up to 25% more customer retention and revenue than sales or marketing initiatives
- 68% of your customers who leave, do so because they perceive you are indifferent to them
- 60–75% of customers will do business with a company again if it deals with a customer service issue fairly, even if the result is not in their favour
- When MBNA halved its defection rate, profits rose a whopping 125%
- 80% of companies believe they deliver a superior customer experience, but only 8% of their customers agree
If you’re not looking at how you can improve customer retention in your business, especially in this climate, you’re missing a trick.
Why?
- Customers treated well won’t abandon you when the slightest thing goes wrong.
- Customers treated well are advocates for your business, spread your word and protect you in times of need.
- They will buy from you time and time again.
Elevating customers to advocates isn’t an exact science, however there’s some pointers below I’ve picked up from working with and noticing people and companies with true fan bases…
- Have a compelling story about your business. Every successful business I’ve seen has one. Tell that story all the time. Use it as your guiding principle. Enjoy sharing your story with people.
- Set out to make a real difference with your product or service – the more life-changing and inspirational, the faster that customer accelerates up the fan curve.
- Hire people who are brilliant and who want to uphold your values and the company’s story
- Accept mistakes, but fix them fast and make things better than they were before.
- Be generous with your time, but be smart in the way you manage your priorities.
- Be respectful and selfless, without being ridiculous about it.
- Give a lot away for free but don’t be afraid of asking for the sale.
- Add huge amounts of value regularly via different media.
- Exude confidence.
- Study how the world’s best companies SERVICE their customers rather than just focusing on their “marketing” – you’ll find many more brands are loved because of their service than because of their marketing. One of MINI’s secrets of success is its hugely popular after-sales care package called TLC – it wasn’t just the pretty designs that made the MINI a huge seller, it’s the whole package you get once you’re a customer
Getting your business to this phase in its development clearly doesn’t happen overnight. But you can make it happen. Keep focused on your enthusiam for your business. Never let go of your desire to share it with others. Most critically of all, constantly ask your customers how you can do better. Ask them what they think and act upon that feedback rigorously. Involve them in your growth. Build them into your story.
What are you doing to retain your customers?
Send yourself a test of Customer Thermometer today and see how it can help you get valuable feedback.
