Customer Retention Strategies
Moving them up the chain ...
POSTED BY KIRSTY PARRIS ON 01/02/2019 @ 8:00AM
Without customers, your business simply would not exist. Some businesses are so focused on winning new customers that they often neglect to put any effort into retaining the customers they already have ...
Winning new customers is often far more expensive than retaining existing ones. Winning a new contract may cost time in terms of developing a sales pitch and cash in terms of corporate entertainment in order to win over your target client.
"By contrast, retaining an existing customer might be as simple as sending them a thank you card with a voucher enclosed offering 10% off their next purchase!"
Businesses constantly strive to grow their client base and to do this they must go out and put time and hard earned money into sales and advertising efforts. It's during these times that many business people take their eyes off satisfying their current customers and this can lead to customers leaving.
Customers of any business generally fall into three categories:
Loyal customers who won't leave for another product or service provider – even if a special offer is put to them. At the very minimum they will give their existing supplier the opportunity to meet or beat the offer. Maintaining loyal customers is an integral part of any business. Over time it has been proven that loyal customers will spend more with you and they will refer new clients on to you.
Satisfied customers are customers who are open to a better offer from the competition. They feel that the product or service they are receiving is on a par with other offerings on the market but they are open to switching to something better (given the right special offer).
Dissatisfied customers who are not happy with your product or service. Some will complain, giving you the opportunity to target the customer with client retention measures. However, for every complaint that is received from discontented customers, there will be several who will complain to their friends or publish their complaints online without telling you. These customers must be targeted pre-emptively with customer retention tools.
The goal of any business is to move the customers up along the customer chain. Dissatisfied customers move to the satisfied category, satisfied customers move to the loyal customer category and the business continues to look after the life-blood that is the loyal customer category.
Identifying and categorising each customer will take time and effort (hours analysing sales data). However it will be worth the effort if it helps you retain some hard earned clients.
Sell The Benefits, Not The Product
Customers buy from you because you give them a solution to a problem. For example, businesses buy new computers because they need to update and replace old, slow machines. The attractive solution to this problem – new computers at a fair price with some added benefit such as good backup and support services from the supplier. Regardless of the product or service that you offer, sell the benefits to your customers. Differentiate your firm and increase your chances of closing the sale by offering added benefits such as great service, a free add-on, etc.
Focus on the Numbers
There is no point in selling huge quantities of a product or service to your “biggest customer” if you are selling at a loss. You should focus your business development efforts on targeting new “high margin” customers and build your business into a more profitable entity. Equally, you should try to reduce the number of or even eradicate non-profitable customers from your business. You can do this by increasing the price of your products or services to a level where you make a healthy margin. If the customer stays with you then you have a positive result – they are now profitable. If they leave you for another supplier – no harm, since they were loss making for your business.
Build Relationships with your target market
This should be viewed as an investment. It requires time, effort and budget. In order to become a market leader your business needs to demonstrate its expertise. You can do this by blogging, writing articles for business magazines and newspapers, producing newsletters, public speaking at seminars and events or just by meeting potential clients face to face. Essentially, you are giving a little something away to potential customers for free. Over time, by continuously demonstrating expertise and giving away some free advice, potential clients are more likely to buy from you.
If you'd like to know more about customer retention, then please do call me on 07521 790284 or click here to ping over an email and let's see how I can help you.
Until next time ...
If you're interested in business coaching and my blog post has inspired you to find out more, then why not visit my website which you can find at www.andromedaconsulting.co.uk and let's arrange a free consultation!
I'm Kirsty Parris and I specialise in helping business owners, like you, to realise the true potential of your business. Whether that is getting you back on track with your business plan or helping to devise and implement new plans that you never thought possible.
Some of my clients see me as a coach, a mentor, a consultant and some even as a financial therapist!
Based near Milton Keynes I primarily work with owner managed and family businesses between London and Birmingham.
I offer a broad spectrum of business development services including business coaching, business growth planning, sales and marketing support, personnel support and systems reviews.
I am not just another business consultant as I see the job through with implementation should you require it and I will work with you on a retained basis as an addition to your team or on a project by project basis...your call...and there is no tie in. You work with me for as long as you are seeing the results.
Your minimum requirement? You need to be ambitious enough to reach or exceed your personal and business potential. Together we will make it happen!