It’s an old business adage that it’s less expensive to keep a current customer than to attract a new one. Research shows that improving customer retention by as little as 5% can produce more than a 25% increase in profits. Churn can also have a serious impact on the overall quality of customer service. It creates stress for front-line employees and can make them less willing to invest the effort in building relationships with clients across the board. With that in mind, here are some steps you can implement right away.
One sure way to set a customer relationship up for failure is to create unrealistic expectations for your products and services. In their eagerness to close the deal, it can be tempting for salespeople to gloss over potential challenges. But even without meaning to, there can be miscommunication – what business commentator Scott Adams calls the “one screen-two movies” phenomenon.
When such a situation does arise, it’s essential to address it as soon as possible. Get all the stakeholders together (at least virtually) and hash any conflicts out. Then follow up with the customer at close intervals to ensure that expectations and performance align. You can gradually extend the time between meetings until the relationship is on solid ground.
The onboarding process is another make-or-break moment in the customer relationship. Apart from conversations with salespeople, it’s often the client’s first interaction with your team. Make the process as easy as possible for a new customer.
The first step to successful onboarding is having a common understanding of the scope of the purchase or project (see above). Next, streamline the exchange of necessary information as much as possible. This includes both the collection information you need from the customer in order to provide the goods or services and the creation of any user accounts that the client will need. Nothing is more annoying – and more damaging to trust – than having to constantly go back to a new client with “one more question.”
Retention isn’t only for new customers, of course. Client-centric is a buzz word these days. Still, it’s not uncommon for satisfaction surveys to find that customers’ perceptions of your quality of service and your team’s opinion vary greatly. (Funny how we keep coming back to that, huh?)
Creating a great customer experience isn’t just about designing a glitzy interface. Instead, ask yourself whether your company’s processes are designed for the client’s convenience or yours. Some operations, especially purely internal ones, should reflect your team’s needs, of course. But if the overwhelming majority of your workflows put the customer firmly in second place, it might be time to rethink them if you want to improve retention rates.
This one makes almost everyone’s list of ways to improve customer retention! Obviously, communicating effectively with clients provides a multitude of benefits. But when you talk is as important as how.
Do your clients only hear from you when you need something? If so, that’s a problem. No one likes a “gimme.” Simple and cost-effective solutions like emailing birthday or holiday cards are a place to start. But to turn things around, work to become an information resource for your clients. I guarantee that your team has a ton of knowledge that your clients will value. Convincing them to share that knowledge, especially for free, may take some doing, of course. Several years ago, however, I saw a statement that has stuck with me: In the future, you’ll charge for what you’ve been giving away and give away what you’ve been charging for. That’s been true in large part.
Understanding your customer is essential to meeting their needs and retaining their business. Many people assume they know what their clients think and want. These ideas are often based on anecdotal evidence rather than hard data, however. They also may no longer reflect your current clients or those you hope to win in the future.
Don’t try to be a mind reader. Ask customers what they want and need. As long as you keep surveys short and don’t overwhelm clients with their frequency, you can gain invaluable insights. Your company’s social media channels can be a great venue for this information gathering. Don’t be discouraged if only a few clients respond, at least at first. Keep trying.
Some companies today use extremely sophisticated algorithms to track customer preferences and tailor communication and products and services. If you have the resources to do that, go for it! Even if you don’t, however, there are still things your team can to show that you value each and every client.
Have you ever called a company with a service issue only to find yourself providing the same identifying information and describing the problem over and over and over again? No fun, right? When a client contacts you, it shouldn’t always feel like the first time. Even if your company is large enough that an employee doesn’t have a personal relationship with the client, they should be able to quickly find key items of information – for example, contact information, communication preferences, purchase history, one or two personal details – in a customer relationship management (CRM) system. They should take good notes during calls or highlight key portions of written communications, preferably in real-time using that same system. Finally, share information about the current situation when transferring a client to a colleague with a different area of expertise.
Even the greatest company will have an unhappy client now and then. How team members respond to the situation can make the difference between retaining and losing a customer. Don’t over-react to an unhappy client. Above all, don’t lash out or try to deflect blame onto a colleague.
Listen to what the client has to say and acknowledge their thoughts and feelings about the situation. Remember that it’s not about deciding who’s at fault as much as it is about working together to find a solution. Often, people just need to vent their frustration. And unfortunately, there are some people who aren’t happy unless they have something to be unhappy about. (These are what we refer to as “difficult clients.”)
Final Thoughts on Customer Retention
The common thread to all these steps is this: your customer is a unique human being, worthy of respect. Treat them that way, and you’ll gain their respect, loyalty, and future business. Never forget that they’ve chosen you to help them. Don’t make them regret it!
For more great tips on customer retention, check out Grow Your Business with a Strong Retention Strategy, by Ido Deutsch.