Are you retaining your customers?

Customer retention is on the minds of small and medium-sized businesses across the world. With rising customer acquisition costs, businesses need to innovate and assume a proactive role in retaining clients.

Studies have found that acquiring new customers can cost as much as five to seven times more than simply retaining existing customers. The fact that customer profitability tends to increase over the life of a retained customer is added incentive for businesses to allocate more resources to sharpening their customer retention strategies.

Before I offer my top customer retention strategies for businesses, I want to share three reasons, identified in research, your customers may leave you.

1. 68% leave because they are unhappy with the service they receive.
2. 14% are unhappy with the product or service.
3. 9% decide to use a competitor.

The following customer retention strategies will hopefully give you some inspiration and practical examples to help you improve your customer retention rates. They address the above mentioned problems and provide you with actionable tips you can implement today to maximise your customer retention.

1. Set customer expectations

The first step to building better customer retention is to set client expectations early. The earlier the better. Don’t wait.

A great way to foster loyal customers is to “under promise and over deliver” on the expectations you originally laid out in your SLA or proposal. For instance, Spearhead eLearning state that any customer query/issue will be replied to within one hour. In reality, the response time is closer to ten minutes.

By setting expectations early and a tad lower than you can provide, you can eliminate uncertainty as to the level of service you need to offer to ensure your clients are happy. This clear vision enables your company to build KPIs around specific expectations and ensure you are always over delivering.

Clients tend to remember negative experiences. So if you have over delivered on the past 20 occasions, but, once, you undelivered – your client will no doubt quote that negative experience as a reason to cancel his or her contract with you.

 2. Be the expert

Small and medium-sized businesses are becoming more and more dependent on services to run their operation. No matter what industry you occupy, if you can be the expert in your particular field, you will likely retain more customers.

Becoming your customers’ trusted adviser will build customer loyalty and reduce customer churn. Becoming a trusted source on all areas of your sector/industry, you build a relationship that leads to a dependency. Your customers will trust you, rely on you to give the best advice, and recognise you as an integral part of their business success.

If you want to build trust with clients, identify industry-specific problems currently facing those clients. We approached a number of our hospitality clients and asked them the issues they faced when sourcing training for their staff. We found that most of the issues we already solved, however there was one issue that always popped up across the board. We simply developed a solution for this and then used it to gain more hospitality clients, how? We simply raised the common problem/pain point immediately in the meeting. "Thank you for inviting us here today (NAME) We have found that in your industry there seems to be an issue with (PROBLEM) Have you also found that same issue?" They will most likely have had the same issue, you then show them how you are the solution, you are the subject matter experts in your field and then you DELIVER!

Give your clients a quick courtesy call – inform them of upcoming changes and provide some insightful recommendations as to their best plan of attack. This proactive, personalised approach will bolster customer loyalty and render other customer retention strategies more effective.

3. Build trust through relationships

As the age old saying goes, you do business with people you trust. Trust is essential in business, and building relationships with clients will garner that trust. People most of the time back the jockey and not the horse. As trust increases, commitment tends to grow. I recommend building trust through shared values.

So what are shared values?

Cultivating shared values means taking an interest in your clients and their business. Do some research on their business, understand how you play a role in their day-to-day activities, and use this information to strengthen your relationship. A good way to start is by asking one simple question the next time you stop by for a quarterly check-up. Here at Spearhead we ask them where they want to be and how our training can get them there, it is measurable.

Ask them “What differentiates you from competitors?” Once they answer, remember that and make a note to do some extra research and find ways that you can assist them with strengthening that point of differentiation through the services you provide. Give them a follow-up call the next week and let them know what you came up with. This shows you have a shared value and are genuinely interested in their business.

Simply providing a service is no longer sufficient– as competitors enter your market, you need to start building shared values with clients and showing you take an interest in them and their success.

4. Build relationships online

Your clients are online, so let’s start building relationships with them while they are glued to their computer screens. With the rise of social media, connecting with your clients through these mediums makes sense. I would focus my efforts on building social profiles on LinkedIn, Twitter, and Facebook. The majority of your clients will have active profiles on at least one of these Web sites.

PJ Ellis from Blake 7 asserts that social media is changing the playing field by providing a venue for the one-to-one connections that create unbreakable bonds. Connecting with customers and building communities takes more effort and time than typical social media acquisition strategies. Share relevant content and updates, don't hard sell (remember you are the experts in your field)

Share things such as:

• Product news updates
• Short pieces on key news, such as new clients gained and the positive impact you are having on those clients
• Case studies featuring your clients
• Reviews of new software/products/services
• Details of new services you offer

Going the extra mile for your customers is an easy way to build strong relationships. As a service business, you have countless opportunities to woo your clients and transcend the minimum.

By doing this, you can build some serious long-term loyalty. If your clients know you are prepared to go above and beyond, they will stick with you when competitors start knocking on their door.

I hope this has added value in some way and I wish all of my connections the best for success in the future

Have a great week

Kind Regards

John Loveday

CEO & Co-Founder

Spearhead eLearning

Twitter: @jloveday @spearheadtrg?