While it is a well versed sales pitch, until recently there was very little economic proof to substantiate this claim. However, over the last decade, brands have taken this slogan to heart and according to Gartner are spending twice as much on customer retention than on customer acquisition, and they are seeing substantial returns.
Harvard Business Review states that increasing your customer retention by just 5% can increase profits by 25% to 95%. With increased competition and rising customer expectations there is a greater need than ever to strengthen customer relationships. So, how do you go about investing in a robust customer retention strategy.
Firstly, customers can only be retained if there is a dedicated place where their grievances can be directed. Having a dedicated call centre to which customers can be directed should be a high priority. Having knowledgeable, empathetic representatives on the phone, who take time to understand the customers’ problems and resolve them on first contact, are 3 times more likely to retain customers.
Secondly, although most businesses have some form of customer service facility, those that truly excel at customer retention examine every customer touch point and are available 24 hours a day. This attention to detail is a real differentiator and by offering something the competition doesn’t, suggests to the customer that they are valued, which in turn evokes loyalty, and loyalty pays. Forrester Research revealed that loyal customers spend 30% more with brands than new customers do.
Lastly, brands need to be flexible. If the issue is pricing, how flexible can you be in matching that price? What offer of good-will can you make to restore the balance of trust? Once you understand your customers’ needs you can work out how to address them, and in so doing develop the opportunity to add value.
A study conducted by Forbes Insights validates that focusing on high quality customers is a more efficient way to reach sales and revenue goals. This study found that businesses who invested in customer retention over the last 1-3 years had a nearly 200% higher likelihood of increasing their market share in the last year, than those who focused purely on acquisition of new clients.
Investing in customer retention is a long term strategy and the rewards are plentiful. For the business, the economic advantage of increased profits and market growth are undisputed. From a customer’s perspective, customer retention is their capacity to remember. They remember how you, as a business or brand, made them feel. And who can calculate the customer lifetime value of that? At FMI, we have a state of the art contact centre facility, offering you a professional customer retention solution, so get in touch today and start retaining customers now. Contact Gavin Spencer at firstname.lastname@example.org. or call 01 496 3399.