As a customer retention specialist, you know how to keep your clients happy and loyal. But do you know how to impress your potential employers with your skills and experience? In this article, we will help you prepare for the most common interview questions that you might face in your job hunt. We will cover the following topics:
Customer retention is the ability to retain existing customers and prevent them from switching to competitors or leaving the market. It is a key metric for measuring the success and profitability of a business, as well as the satisfaction and loyalty of its customers. Customer retention specialists are responsible for designing and implementing strategies and programs that enhance customer relationships, increase retention rates, and reduce churn.
Customer retention is a conversation with a disappointed person. It is a sales and marketing opportunity to collect data to learn what has brought them to this point and to understand where the business or what experience has fallen short. It’s an opportunity to listen. It’s also an opportunity to find out what they liked about a product or service before they changed their position. I’ve often found that organizations want to force a customer to explain themselves, “why do you think you deserve preferential treatment concerning price or services”. This immediately creates a barrier to effect communication as you won’t have a free flowing conversation with an angry person.
Customer retention is important because it costs less to retain existing customers than to acquire new ones. According to some studies, acquiring a new customer can be five to 25 times more expensive than retaining an existing one. Moreover, retaining customers can increase their lifetime value, referrals, and advocacy, which can boost revenue and growth. Customer retention specialists can demonstrate their value by showing how their actions and initiatives have improved customer retention and its impact on the business.
Customer retention is as much a public relations exercise as it is a sales/marketing and revenue protection exercise. Is you company flexible concerning customer grievances or preferences or are you defending a position that presents you as out of touch. I once worked for an insurance company that defended high premiums, they were “blue ribbon” and customers expected to pay for that. Except they weren’t, they were no different to their competitors, they were just more expensive. They were also losing revenue hand over fist through policy cancellations, and now have sold their insurance business. If you think you are better and charge above market for the same thing, you are deluded and customer will tell you this.
Customer retention can be measured in various ways, depending on the type and goal of the business. Retention rate, churn rate, customer lifetime value, and net promoter score are all common methods used to measure customer retention. It is important for customer retention specialists to be familiar with these methods in order to track and evaluate their performance and results. Retention rate is the percentage of customers who remain with the business over a given period of time, churn rate is the percentage of customers who leave the business over a given period of time, customer lifetime value is the total revenue generated by a customer over their relationship with the business, and net promoter score is the likelihood of a customer to recommend the business to others, based on a scale from -100 to 100.
Enhancing customer retention requires a variety of tactics and best practices, such as understanding customer needs and delivering value that meets or exceeds their expectations. It's also important to segment customers based on their behavior and preferences, and build trust and rapport with them. Offering loyalty programs, rewards, incentives, discounts, and engaging customers through multiple channels are also essential. Additionally, soliciting feedback and testimonials from customers, as well as surprising them with unexpected gestures can help to improve customer retention. Customer retention specialists should be able to demonstrate how they have implemented or improved these tactics and how they have influenced customer retention and satisfaction.
Customer complaints and issues are an inevitable part of business, but they can also be opportunities to improve customer retention and loyalty. Customer retention specialists should be able to handle customer complaints and issues effectively and professionally. This includes listening to the customer attentively and empathically, apologizing sincerely, taking responsibility for the issue, explaining the cause and solution, offering alternatives or compensation if possible, following up with the customer, learning from the issue to prevent it from happening again, and improving processes and policies accordingly. Ultimately, customer retention specialists should be able to demonstrate their communication and problem-solving skills, showing how they have turned unhappy customers into loyal ones.
A complaint is an opportunity, to learn and hopefully create an advocate. No one likes getting their ears bashed. But 9 times out of ten, a grievance is not out of place. You or the company aren’t meeting an expectation. Complaint handling starts with listening, seeking to understand not be understood. Where a client just demand a resolution on their own terms without explanation, the request for information should be presented as being really helpful to prevent this situation occurring again and for other customers, that the customer is helping other people by participating in the process. While hard, no one should ever take a complaint personally unless it’s an opportunity to personally reflect on how to grow from the experience.
Customer retention is not a solo effort, but a cross-functional and collaborative one. Customer retention specialists need to work with other teams and departments, such as sales, marketing, product, service, and finance, to align goals, strategies, and actions that support customer retention. Customer retention specialists should be able to show their teamwork and coordination skills, and how they have contributed to or led cross-functional projects and initiatives that have improved customer retention and satisfaction.
A error didn’t occur in isolation. Was it training, process, product, price or administrative, or attitude. Investigation needs to take place as to where in the chain things went wrong, so the process of “unfreeze, change, refreeze” can take place.