The growing value of customer retention is a business reality of the 21st century. Companies are encouraged to dedicate significant resources aimed at maintaining their existing customer base despite the ongoing fixation on customer acquisition.
According to R.L. Oliver, author of Satisfaction: A behavioral perspective on the consumer, “customer retention is the “deeply held commitment to rebuy or repatronize a preferred product or service consistently in the future, in light of situational influences and marketing efforts having the potential to cause switching behavior.” This definition speaks to the inherent market competition that drives purchasing behavior. The internet makes it very easy for consumers to research and compare various offers against each other. They are better informed and not always willing to accept the best offer. They have to determine
which service provider has their best interest at heart, and they do this by judging the quality of the business relationship.
Research shows that the majority of customers leave their service providers because they believe their business is no longer appreciated. Furthermore, if their expectations are not met, they sever ties and choose another company more in touch with their individual needs and preferences. Implementing a program where you continually re-affirm your customers’ value is an invaluable practice in customer retention. Simply and sincerely expressing your gratitude for your customers’ business is vital to your viability and profitability in the marketplace.
Here are some basic and inexpensive ways to let your customers know they are valued and appreciated for their continued patronage.
- Thank your customers for their business every time you interact with them.
- Use your customers’ names during conversations to show you are taking a personal interest in their needs and concerns.
- Engage your customers as you exchange pleasantries about their lives to build endearing relationships.
- Send thank you notes and even birthday cards on a regular basis. This unexpected and sincere communication makes a lasting impression.
- Make time to call your customers on a frequent basis to see if they are satisfied with your products and services. This lets your customers know they are continually on your radar.
- Stay in touch with your customers via newsletters, eBlasts, social media etc. to inform and educate them on your latest products and services, as well as the latest industry trends.
- Never lose sight of your customers’ loyalty. Following up after a sale is just as imperative as making the initial sale.
One of the benefits of these customer retention practices stems from the correlation between retention and repurchasing. Customers make more frequent purchases if they deem the quality of their business relationships as positive. Additionally, retained customers tend to buy other products or services if they are actively engaged with the company. Retained customers also tend to be less price sensitive. A loyal customer is more likely to accept a price increase as opposed to a customer who is on the fence. Furthermore, repeat customers often give better word-of-mouth which is one of the more efficient and economical ways to attract and
sustain your existing customer base.
Deliberate retention strategies are an important differentiating factor between companies which ultimately strengthens your unique selling proposition. However, what makes your relationship practices even stronger is your ability to choose the “right” clients for your organization. Short-lived and tumultuous partnerships, poor return on new business, and declining morale among internal personnel are strong repercussions. You have to discern if a prospective client is conducive to the growth of your organization. Establishing an open line of communication at the on-set helps clarify expectations, test ideas, and design a program
that aligns with your organization’s and the client’s plans for the future. It also helps to gain an understanding of the prospect’s definition of success.
Every client is unique, and while you may have generalized knowledge from the last pitch or a previous client relationship, it is important to know all the issues and concerns. This is where knowing your target market takes precedence. Do you provide products and services that answer a particular need? Do your offerings provide added value? Do you provide a rare commodity not offered by other service providers? Answering these questions and others will help you choose the clients right for your organization’s long-term success. You’ll find that retention goes much smoother if you have exercised thorough justification for your
Contact MWHPR today, and we’ll position you as the provider of choice through strategic retention practices. We are available for a free consultation to discuss how our approaches can enhance your long-term growth.