Customer retention can transform your business. Watching your company’s customer retention rate gives your mission critical insight into how your customers value your business. Failing to watch this key performance indicator can mean you miss the warning signs of a problem. Perhaps a new product or a new sales person is triggering customers to leave. Customer churn costs you money and more important – its your profit leaving the business.
DEVELOP IMPACTFUL CUSTOMER RETENTION STRATEGIES
Customer retention strategies determines the success of a business in today’s challenging, competitive, client-focused market environment. Your lost customer is another of your competitors’ gained customers. An effective customer relationship management strategy nurtures key accounts and encourages customers to remain brand loyalty over time.
Customer retention training helps sales teams focus more on the customer needs to finalize potential leads. The training hones the customer-facing skills of salesmen, spanning almost all aspects of sales and client interactions that result in promoting brand loyalty. With a higher number of satisfied customers on their side, the sales team is definitely bound to record a boost in productivity.
IDEAL CANDIDATES FOR CUSTOMER RETENTION PROGRAMS
Sales teams from companies faced with one or more of these common problems are ideal candidates for such training:
– Shrinking customer base
– Failure to meet sales targets in terms of lead generation, finalization
– Longer sales cycle
– Inefficient CRM
– Problems in determining sales force productivity, ROI on marketing spends
– Problems in forecasting demand
– Unable to find the right customer niche
TOP 6 OBVIOUS CUSTOMER RETENTION TACTICS
Most businesses today spend a lot of money on advertising because they want to attract new customers. However, it is important to remember that retaining your existing customers is a-lot less expensive than attracting new ones. There are several things that you can do to retain your customers. Below are some of the best customer retention tactics:
1. DELIVER TOP-NOTCH CUSTOMER SERVICE
This is one of the most important client retention tactics. If your customers are content with the service your team provides, then they will most-likely return again. On the other hand, if customers are not pleased with your service, then they’ll probably take their business elsewhere. That is why you want to make sure that your leaders and teams provide customer service to exceed all of your customer’s expectations. One of our customers sends an additional ring when customers order a ring from them. The other rings cost less than 50 cents yet every customer gives the company 5 stars for service.
2. RESOLVE COMPLAINTS QUICKLY
It is impossible to please everyone. Your leaders and teams most likely deal with the same complaints over and over. Even so, each unsatisfied customer is likely to take his or her business elsewhere. However, if you resolve the complaint quickly, then the customer loyalty DOUBLES. Yes doubles.
One Safety equipment client really got this possibility. They purposefully ship the wrong order then send a whole free order using same day service. Clients are amazed! They now know how important order accuracy and shipping is to their supplier and they retain over 97% of their customers every though their price is higher. Resolve issues quickly and generously and the clients may come back to do business with you. Keep in mind that the vast majority of unsatisfied customers do not even bother complaining. Therefore, getting a complaint is always a good thing.
3. ENCOURAGE CUSTOMER FEEDBACK
Your customers need to know that their opinion really matters. That is why you could encourage them and even reward them to give their feedback. You can have them fill out a suggestion card before they leave the building. You can also call them and ask them to complete a satisfaction survey. Some of the questions you should ask your customers are:
– On a scale from one to 10, how would you recommend our product or service to a friend or colleague?
– What do you like most about the product or service?
– What do you dislike?
– What could we do to improve our value or make your life easier?
You cannot get too much customer input. You can formalize your customer engagement with Customer Advisory Boards. Gathering together your top customers’ opinions allows them to influence your product development so your investment gets directly influenced by your audience’s requirements. Our clients retain 97.3% of their customers who participate on client advisory panels and forums. Well, that’s when facilitated by us so it isn’t death by Powerpoint. Your customers’ ability to give feedback and be connected to the top of the house executives equals customer retention.
4. START A CUSTOMER LOYALTY PROGRAM
Many businesses today consider implementing some form of customer loyalty program. A customer loyalty program is where customers get rewarded for using a product or business frequently. Studies show that customer loyalty programs are extremely effective. You may want to consider starting a customer loyalty program. For example, you can start a program where customers receive additional value or a new product for purchasing a certain number of times or within a specific frequency.
You really want to take a look at your buyer journey. You want the loyalty program to INCREASE profit, not DECREASE profit by giving more away than you get. You want to incent more purchases, more loyalty and purchasing other products and services.
When you have a customer retention program that provides a compensation plan for specific customer habits, such programs actively encourage customers to remain loyal. Loyalty programs help in situations where there is intense competition and retention is highly-profitable. For example, technology – where the cost of keeping a client is nothing compared to the cost of acquiring a new client. Simple retention tactics like providing a dedicated account manager and providing high value customers with easily accessible customer service protect your profitability.
5. YOU NOW MUST HAVE AN IMPECCABLE CUSTOMER SERVICE RECORD
Your customer service record is visible on the internet. You want online reviews online to keep your reputation unblemished. Always identify and resolve disputes with customers quickly and to their satisfaction. Better yet – WOW clients so they know how important they are to you and your business. That gets you amazing stories online about how your service reps recovered. Those stories help you keep your service reps longer which saves you tons of resources. Customers who have had their problems solved to their satisfaction will be 2x as loyal as compared to those that have never had a problem in the first place.
6. THE IMPORTANCE OF CONSTANT DEVELOPMENT OF BUSINESS RELATIONSHIPS
Most marketing has been oriented toward one-off business relationships that do not encourage customers to remain loyal. Your business could communicate differently. Communication can be a defection prevention approach to marketing regardless of the type of sell that occurs. Developing a constantly networked relationship with customers makes it easier to retain customers.
The easiest and one of the least expensive ways to retain customers is to simply stay in touch. In addition to calling them or emailing them, you could send them valuable insights about their product and how others are using the same product differently. Customers appreciate seeing others’ success and insights in how to get more value and benefit from your product or service.
FINDING THE RIGHT CUSTOMER RETENTION STRATEGIES FOR YOUR BUSINESS
One of the amazing outcomes of engaging your employees in a customer retention program are the ideas. These ideas focus on the actual challenge of keeping your customers happy and the issues your employees are having holding onto current customers. Your sales team is primarily focused on customer acquisition and most marketing teams also focused on the front end of this cycle. So how do you find the right retention strategies for your business?
TRACK YOUR CUSTOMER RETENTION RATE
You start by tracking your customer retention rate. For example, how does your retention rate vary for different products, sales people, call center staff, different geographies, or different usage patterns. Our clients find shocking insights here about their customer loss rates and where to target. That helps us engage the right people in their customer retention training program.
FIND THE CAUSE FOR CUSTOMER DEFECTION
Now you have the right people in the room, you engage your employees in uncovering the root cause of a customer defection. Is it because they found a new solution, they went to a competitor? These insights are helpful yet they’re Shallo. You really want to understand what was the customer complaint or said differently what was the lead up to the defection.
DEVELOP STRATEGIES INTERNALLY
Specific best practice exercises help your team uncover the root causes. We caution against hiring customer retention consultants. You really want this expertise to be built inside your team. Plus you want your team to implement the solutions. That means they have to own the solutions. The best way to have them on the solutions is to have create the solutions they will implement.
The best kind of customer retention training program focuses on the engagement of your team and generating specific solutions for your customers based on their input.
BENEFITS OF CUSTOMER RETENTION TRAINING PROGRAMS
– It would be too optimistic to simply state that all the above problems will get easily remedied by training. Yet your company will see a marked difference by being more customer-oriented with a trained team, with measures its productivity and success rates.
– Sales and call center teams are often left to rely on their own knowledge, presentation and customer-interaction skills while attempting to retain a frustrated customer. A more standardized approach based on proven methods improves loyalty and retention.
– Sales and call center team appreciate the demands and expectations of your customers most so they are best to map out your company’s retention techniques and offers.
– Acknowledgement and questioning techniques matched with attentive listening builds a friendly rapport with your customer. These are all essential takeaways from this type of customer training.
– The training also enables your company to set realistic targets and measure progress against your customer loyalty goals.
Customer retention training effectively aligns your sales and service teams to ensure customer satisfaction and loyalty. If you have been losing customers at an alarming rate, you want to invest in customer retention training.
HOW CUSTOMER DISLOYALTY CAN BENEFIT FOR YOUR BUSINESS
There are situations when despite all your efforts to retain customers, disloyalty will occur. How you deal with such situations determine if you win back the customer or learn from the experience.
Some customers are not worth the effort. You must determine if they are the right fit for your business. This is particularly the case when they are costly to maintain and your margins do not make it viable to continue doing business with them.
The best way to get value from a customer defection is to LISTEN. Ask questions and make sure the information gets captured and coded. Get this feedback to product managers, sales, and your retention team. Using this information to create customer retention techniques empowers your customer recovery team to deliver the right retention offers and win-back offers.
NO BUDGET? LET INCREASED PROFIT SELF-FUND YOUR PEOPLE DEVELOPMENT
Every customer is valuable and it is essential to keep them active so that they continue to buy from you and not from your competition. Most of your costs are fixed so that the cost of delivering to one additional customer is highly profitable. Think of it this way – one more retained customer means that you have already paid the sales acquisition costs. You already pay the fixed costs. Now your only costs are the variable costs. So price – variable cost = your profit.
Saving dozens of acquired companies can transform your bottom line. A customer retention strategy that maintains active customers helps businesses keep customer loyal or avoids abandonment. That means increased revenue and profit with no additional investment other than a customer retention program which can pay for itself over and over again.
If you have customer retention rates, you can actually calculate the payback period for a customer retention program. Let’s say the customer retention training program requires you to invest $25,000. Now lets use some real numbers. Imagine that your save rate is 50% within a call center with 100 customer requests to discontinue service on a monthly invoice of $500. If you could raise your save rate to 75% (easy normally). Thats a saving you $25,000 of revenue per month. Your customer retention program pays back profit in basically one month – forever!
Seth Godin says it best: Training pays. Sometimes, it’s easy to underestimate just how much it pays.
Consider an employee who is going to work 2000 hours for you this year. It’s not unusual for an organization to invest only 10 or 20 hours developing this person–the equivalent of 1% of their annual workload.
How much training would it take for this person to be 10% better at customer retention? If you invest 100 hours (!) it’ll pay for itself in just six months. There aren’t many investments you can make that double in value in a year.
But let’s take it one step further:
Imagine a customer service rep. Fully costed out, it might cost $5 for this person to service a single customer by phone. An untrained rep doesn’t understand retention, or how to engage, or hasn’t been given targeted customer retention offers. As a result, the value delivered in the call is precisely zero (in fact it’s negative, because you’ve disappointed your customer and they may leave).
On the other hand, the trained rep easily delivers $30 of brand value to the customer, at the same cost of $5. So, instead of zero value, there’s a profit to the brand of $25. A comparative ROI of infinity.
And of course, the untrained person doesn’t fall into this trap once. Instead, your customers experience it over and over, many times a day.
The short-sighted organization decides it’s ‘saving money’ by cutting back training. After all, the short-term thinking goes, what’s the point of training people if they’re only going to leave. (I’d point out the converse of this–what’s the danger of not training the people who stay?)
It’s tempting to nod in agreement at these obvious cases. What’s not so easy is to take responsibility for the quality of your own team’s customer retention training.
We’ve long passed the point where senior leaders and our organization can take responsibility for what we know and how we approach customer problems. Your leaders and teams must own your customer retention strategies for themselves.
HOW WE CAN HELP?
If you need more help retaining your customers, here are some things you can do with regards to customer retention training with a proven track record of increasing save rates of customers.
1. If you are eager to learn more about how Learn2 can transform your specific customer retention rates, book a 45 minute with Doug Bolger, our Chief Learning Officer to talk about how other clients have transformed their customer loyalty and retention.
2. If you already know that Learn2 is a good choice for your business and would like to book a 45 minute appointment with a strategist, send an email to Amy Dano who will coordinate your meeting.
3. If you would like to know more about Learn2 explore our customer retention training solutions. Be fore-warned – we have a LOT of specific programs. Because no 2 clients have the same issues.
4. If you would like to speak with someone right away, call our Learn2 Hotline at 877-4LEARN2 x 229.
