How to improve Customer Retention, not the normal first agenda item for Monday’s meeting is it? Every business owner will tell you how important New business is to their growth, and we wouldn’t disagree – it’s key part of any successful businesses. We work with business owners and Sales and Marketing teams all the time and we can tell you that New Business is high up their agenda – everyone competing for a slice of the same pie. In this, the fourth of our Demand Generation fundamentals blog we’re going to take a look at the other side of the New Business coin, retaining your hard fought, hard won customers.
In this blog we’re going to look at 4 major areas to ensuring that you don’t just win a new customer, but you retain them, love them and ultimately grow them and your business in turn. Before you flick over to our attraction blog in search of the exciting buzz of the new win, spare a thought for the numbers, it’s widely thought that acquiring a new customer costs around 5-25x what it does to retain a client. For some businesses this can be as much as 50-100x more depending on your model – the fact is though, that acquiring new customers is expensive, whether you’re in a B2B or B2C environment.
Mature organisations and those looking to accelerate growth will not just be looking at retention but will be proactively seeking to optimise their efforts to ensure that they are maximising retention wherever possible. If that sounds like you and your business and growth is on your agenda then this is the blog for you!
The Demand Generation Team’s Four Key Retention Areas
Before you get started, we’d recommend that you identify your internal churn (interpret loss) rates – and ask yourself when and why do you lose customers. If you’re in the B2B world then you’ll probably have a better idea of when you lose a big customer and will be able to pinpoint the issue. If you can identify the issues then work through these sections with those issues in mind, preempt them and look deeply at where they could potentially happen again. The same can be said of B2C organisations, especially in the service sector where you can often talk with a customer before they leave you, if you’re not collecting and actively looking at these reasons with improvements in mind then make this your first step.
For Product sales in both B2B and B2C environments then think of retention more as repeat purchases or account spend increases – in both cases identify a target repeat purchase rate as a baseline to get you started.
In the world of Customer Retention this is where it starts, or better put, this is the point that a new customer becomes “a customer”. It could be the purchase point or contract sign, whichever process best fits your business On Boarding is the process that you should be taking to welcome and support your new customers in the early stages of your relationship.
Service on Boarding
In the service sector your’ On Boarding should include helping your clients understand the next steps, timelines, any processes or systems you may use and of course the key members of any teams they will use. Remember they’re choosing you and your business for a reason and making sure that new customers feel supported and welcomed will not only help them to get the most value from you but also ratify and validate their decision.
Be clear and transparent in your On Boarding and make sure that any next steps, milestones and/or review points are well communicated.
Product on Boarding
If you sell a physical product this is the time to ensure that your new customer is 100% clear on the next step in their purchase with you. That might include re-communicating their delivery dates, instructions or giving them access to a customer only portal, discounts etc – it absolutely should include information on how you can support them if they’re unhappy and how they can reach you in the interim.
Top Tip – the point of purchase is a great point to increase average order values, consider giving your new customer additional options to add to their order.
Software on Boarding
If you’re not supporting your customer physically with Software purchases then a good on boarding program is essential. Even if you are providing dedicated support then it’s still an essential! Installation, walk throughs, guided videos, tutorials and community access are all key parts of a good software On Boarding program. Make sure they’re accessible and easy to use, not to mention well communicated.
Nice Segway right? On the subject of communication it’s a major (interpret ESSENTIAL) part of ensuring you retain customers. There isn’t a one size fits all on the subject of communication but here are some key areas any business looking to improve their customer retention rates will want to consider.
Giving your customers value should be the driving force behind everything you do as a business, business magnate Tony Robbins talks often about “Providing more value than anyone else”. It’s great business mantra to adopt but what does it mean in reality? Value is subjective and what’s valuable to you may not be someone else and it’s the same for your customers. The key to adding value is to listen to your customers and really, proactively support them in their goals.
How you do that in your business will depend on your customers and what they need but one thing is for certain, they, not you will have the answers – adopting a customer forum and hear what they’re telling you directly can be a great litmus test. As well as direct feedback pay attention to what your competitors are doing and the sentiment around them, social listening tools like Brandwatch and Keyhole can give you overview insight into the feeling that surrounds some of your nearest and dearest.
If in doubt go back to your personas and reassess what drives your customers in the broadest sense, don’t think about what drives them to buy from you or someone else but rather what’s important to them. Understanding your customers pains, challenges and ambitions will give you a good steer on how you and your business can best add value to them.
We’ll all be familiar with the frustration of “New Customer” offers that shut out loyal buyers – for many it’s a recipe for a leaky bucket in terms of retention. If improving customer retention is on your agenda, then treat them with the same love and attention as you do when you’re courting a potential client.
Simple actions could include discount campaigns specifically for additional purchases, treating existing customers to new releases or maybe inviting them to customer only events (even online events!). However you do it exclusivity can be a great tool for ensuring that your customers feel loved and valued – better still promoting a customer only program can be a great way to attract new customers to retain.
Retaining customers as we said at the top of this blog is between 5-25x less expensive than acquiring new ones so if you’re looking for growth this year and you’re not adopting a retention strategy then we hope this has been helpful.
If you could do with some practical help and support on How to Improve Customer Retention in your own business, drop your details below and we’ll be back to you in a jiffy
Posted by Helen Brookes on Monday 29th March 2021