It happens all the time in every industry; hard-earned customers switch brands, cancel contracts, or don’t return. This common phenomenon is also an age-old business challenge. Sometimes, a customer’s departure seems to come out of nowhere without any warning. But is that really the case? How can you increase customer retention?
And when a customer leaves, is it that easy to get a new one? After all, one might say, there are plenty of people and organizations who need my services or product. There are tons of potential new customers around, right?
No, it is not easy to get new customers. Even businesses that don’t have a small or limited market must grasp this concept. It doesn’t matter if your potential market segment is 50 or 50 million, you should be concerned when you lose a customer. Customer attrition, or “churn,” can identify broader underlying issues that you would be wise to examine.
That’s life, or is it?
Sure, sometimes, customers leave because they were never totally yours. There is the passing shopper or traveler who probably won’t be back in your town or someone who just needed your specific product or service once. That’s fair. However, what about those customers who don’t fall into those buckets? What about customers who need your product and are not limited by location or situational constraints? Why don’t those customers buy from you more often? Why have they stopped buying your service and switched to your competition?
The digital revolution accelerates the consequences of an unhappy customer.
Customer attrition affects your business beyond direct revenue loss. In a hyper-connected world, discontented clients may talk to others about their unhappiness with you or your product or take to review platforms and give you a low rating. Even worse, they may describe their dissatisfaction with key unflattering terms like “lack of trust,” “bad service,” “poor quality,” or “dishonest.” Now you’ve got a red flag next to your name for everyone to see and have to worry about more than just one customer.
But how could you have known?
Not all bad customer reviews come from an explosive interaction just as not all customers just leave. There must have been signs of dissatisfaction. For retail, it might be they stood in your store and weren’t helped; they were mistreated or had a bad experience during a service incident or product return. Maybe a subscriber of your software, app, entertainment streaming service, or news channel was no longer getting what they wanted. There are many reasons why customers leave, but only a handful of ways you can prevent them from abandoning you.
Are you happy?
Ask your customers this simple question, “Are you happy?” This move has a significant impact because it signals your attitude: I value you and your business!
Customer retention starts with getting closer to your customers and listening to what they have to say. That doesn’t mean you have to do everything they request, but it means you should ask their opinion and take it seriously. More than ever, today’s customers look for value in their relationship with you and compare it to the shiny new offer from your competition. A good relationship built on trust and creating value is the core of beating your competition.
As such, you have to stay close to your customers and watch out signs they are disassociating from your brand. Does she still log into your service or visit your website? When’s the last time she bought something from you? Has he been to your store less than usual? Were they less engaged the last time they ate in your restaurant? These are all signs your customer may be ready to walk out the door for the last time, and it is time for you work on keeping her.
Customer Retention Strategies
The simple ask!
Ask your customer to stay with you. Remind her why she came to you in the first place, that is, demonstrate your value and offer to help her even more.
Ask him how s/he is.
Allow your customers or users to voice their satisfaction (or dissatisfaction) with your brand. When you ask for feedback, it demonstrates your appreciation for the relationship. Of course, when they give you feedback, you have to react and show that you take it into account and that you value their time and effort.
Nothing is worse than being the best brand, partner, or service provider to get their business, but once they sign on the dotted line, you lose interest and no longer pay attention to your customer. Pay attention to service and be good at what you do, consistently. You can’t just breathe a sigh of relief and feel safe because you snagged the customer. Treat your customers like you would your high school sweetheart before you were officially a couple and keep that same focus and enthusiasm throughout the life of this customer marriage.
Create reasons to engage: Value co-creation.
How engaged your customers are is an essential indicator of how likely they are to leave, so keep them interested. Don’t let your customers slowly disconnect from your brand. When customers are active contributors to the customer/vendor relationship, it ensures they have a vested interest in the relationship, and it is easier for you to spot changes in their attitude toward you and your brand.
None of these strategies are especially onerous, but they take effort. Remember that it is much cheaper to keep a customer than it is to acquire a new one.
Do you have any questions, or would you like to learn more about how you can keep your customers?
If so, please get in touch!