Most companies spend a lot of money to bring on new customers. While a constant influx of new customers is important, keeping the ones you already have is even more critical. According to the Harvard Business Review, increasing customer retention rates by just five percent can increase profits between 25 and 95 percent. Many focus on the outside to bring in new business. Instead, business leaders should turn their attention to the customers who are already within their reach and find new ways to generate more revenue from them. How can companies accomplish this goal? By building more meaningful and deeper relationships. Here’s how:
How To Retain Customers
1. Be an excellent communicator. Find out how often and by what channels your customer wants to receive information. Make sure you focus on the customer’s concerns, challenges and priorities—not yours. If you make a mistake, admit it and then determine how to fix it. Always ask if there’s something more you can do for your customer or something the customer would have preferred you had done differently.
2. Get to know your customers on a personal basis. Find out about your customers’ interests and hobbies, background (where they grew up, where they went to school) and family (special events, birthdays, milestones). Then use this knowledge to remember, acknowledge and surprise them.
3. Recognize that pricing discounts are not the most important part of a business relationship, especially in the B2B marketplace. Customers stay because they like doing business with you. They trust you. They believe you understand them and they think they are getting good value for their investment. And, they know you will go the extra mile to make sure they are satisfied. And, they know they will get the rock-solid customer service that exceeds expectations.
4. Continue to innovate. Look to the future. What new features can you add to your current products or services? What new products or services do your customers need? How can you help customers achieve their goals, even if it is not directly related to your products or services?
A Customer’s Life Cycle
Is there a typical life cycle of a customer? No. Depending on your products or services, customers can have short- or long-term needs. In addition, business conditions and priorities change frequently. Companies are acquired, they go out of business, management personnel come and go. During each of these phases, business relationships are affected. The fact is: customers sometimes outgrow the relationship. When that happens, be gracious and understanding. You never know how the pendulum will swing back in your favor again.