Businesses spend millions of pounds casting their fishing lines, hooking people and reeling them in to be customers. But once you've gained custom, just how do you keep it?
The downfall for many companies is that they dont know how to retain consumers. It seems like this has fast become the pot of gold at the end of the rainbow and few firms manage to do it well. But why bother? What are the real advantages to retention?
Studies across a number of industries have revealed that the cost of keeping an existing customer is just 10 per cent of the cost of acquiring a new one. So, economically it makes pretty good sense. Putting together a good retention strategy will also lead to increased customer profitability as the longer the relationship, the lower the account maintenance cost.
There are other associated benefits to fostering a lasting relationship with an individual, including the fact that long-term customers are more likely to introduce your business to others via a verbal referral, theyre also more likely to purchase others products from you and if theyre completely happy with the service theyre getting then why would they even think about switching to a competitor?
If the business is maintaining good customer relations and keeping consumers loyal and satisfied, this also creates a happy workforce, with increased job satisfaction. Look at it this way: if the customer has been loyal to the company for some time, he or she will require less help and have fewer problems to deal with.
So clearly there are a great many benefits to the business by keeping hold of current customers. But modern consumers are savvy. Theyre not happy to deal with you simply because they know you or your office is nearby or even because its the easiest option. These days, people know how to get the best deal and will be happy to pop off to a competitor quicker than you can say "nice knowing you" if you dont give them what they need. So, short of locking the doors and refusing to let people go until they pledge to stay loyal to you for the rest of their days, just how do you keep people coming back for more?
The bad news is there doesnt seem to be one particular foolproof method: lets face it, if there was, everyone would be doing it. But firms that can boast great success in their customer retention endeavours often have one thing in common – great customer service. Its no good promising a customer the world at your initial meeting if three months down the line they discover you dont have the manpower, skills or knowledge to go about fulfilling your pledges. You have to make promises you can keep and be able to provide what the customer demands and achieve it in a much better way than any of your competitors.
As all great gurus will tell you, the first thing you need to do is look within. In this case, within your business. Employing staff who are enthusiastic and who actually know what theyre talking about will do wonders for the reputation of the firm. How many times have you walked into a sports shop and asked for some advice about which tennis racquet to buy, only to be met with a blank stare from the shop assistant and a mumbled list of prices? Its frustrating if the customer contact person has no clue about what theyre actually selling – so staff training is key.
Staff are frequently listed as a companys biggest asset and, as such, they deserve a fair sized chance to develop in their roles. Business representatives need to be taught to exercise good judgment and take the initiative when it comes to problem solving.
Tried and tested methods of customer retention also involve rewarding people for their loyalty and giving customers something more tangible – a real reason to come back to your firm. Incentives to return could include add-ons, vouchers, loyalty discounts or cards, special pricing and bonuses and gifts for ordering through a website.
Using the web to enable your customers to manage their own accounts with your business will also allow for greater commitment. Depending on your line of business, using the website as an account management tool enhances your customers loyalty and buy-in.
But above all, keeping consumers happy means your actions must speak louder than your words and a proven rather than a promised commitment will put you way ahead of the competition.