Why you need to work as hard to keep your customers, as you did to get them

When a business opens its door for the first time, its main focus is getting customers. But what is equally important, and often neglected, is developing a strategy to keep clients. Aki Kalliatakis, founder of The Leadership LaunchPad, a consultancy that specialises in raising the standards of customer care, makes a solid argument for why a business must have a plan to get new customers and retain them.

This is the bottom line – losing customers is expensive

Kalliatakis says that companies worldwide recognise that customer service failings have a major impact on their profitability. Yet many companies fail to ensure that they keep the clients they worked so hard to win over. “In 25 years of consulting, I have yet to encounter one organisation that has a customer retention strategy that is as comprehensive as its customer acquisition strategy,” he says.

He says customer retention should be the most important priority on the minds of business owners.

“Customer-driven companies are far more successful than those that neglect their customers. In fact, I’d go so far as to say that the return on investment of customer management is that your business will still be around in five years to talk about it,” he says.

Research published in 2013 by The Economist Intelligence Unit supports his argument:

Two thirds of companies surveyed found that their profitability was taking a knock as a result of poor service.

One in four of those same companies have failed to invest in customer service in the past two years.

In about 15% of organisations customer losses led to a drop in a company’s share price.

Why you need customers who keep coming back

“The payoff from keeping customers loyal is just too large to be ignored,” he says.

You avoid expensive marketing costs of attracting new customers

Loyal customers are less price sensitive

They are willing to pay more for, and buy a wider range of, products and services

They encourage others to do business with you

Competitors find it far more difficult to lure them away

They share ideas for innovations and improvements with you

So what can you do to retain customers? These are some of Aki’s most effective strategies.

Don’t let your customers feel like a name in a database. Make an effort to personalise your encounters with clients. This is an area where smaller businesses can gain a competitive advantage over bigger companies. Your database should contain personal information about clients. When it is a client’s birthday, for example, don’t send a computer generated message, rather phone or send a personalised email or sms.

Staying in touch is a cost effective marketing strategy. It is cheaper to market to existing customers than acquire new ones. If you communicate with customers regularly, they are more likely support you in the long term. This means they are likely to spend more by being open to further sales and if customers are happy they will also recommend your business to others. They are also more likely to be forgiving of any occasional mistakes.

Make a list of your top customers. This is not a list of people who spend the most money with your business, but clients you want to communicate with often. Do the same for prospective clients. You might want to structure special deals for these customers. When you increase prices, consider offering your loyal customers more affordable or enticing price options. Finding new customers means incurring costs, so it makes sense to keep your existing customers happy.

Repetition. Don’t assume that your most loyal customers are aware of all the products and services you offer. Send out regular reminders.

Spoil your customers. Do things that your clients wouldn’t normally do for themselves, or do something they won’t forget. For example, a garden service owner who specialises in lawns gave me his business card which was actually a small brown envelope with grass seeds inside. It also had five tips on lawn care printed on the back.

A small gesture such as recognising a customer is often enough to win someone over. Standing at the door and saying “nice to see you again,” to everyone who walks in makes customers feel valued. And if you have a small business, chances are that in 90% of cases you will be right – even if you don’t know the customer’s name.

Continuously come up with innovative ways of adding value. If there’s one thing that keeps customers loyal, it’s the fact that they always get little surprises. Disney World in the US employs full-time locksmiths at its theme park to help people who have lost their car keys after spending a day in the park. This doesn’t have anything to do with its core business, but helping out customers in a tight spot will leave a lasting impression.

“All of the ideas mentioned have the additional benefit of building better relationships and an emotional bond between your staff and your customers,” he says.

He believes that business owners should apply more creativity when it comes to developing customer retention strategies. “The evidence is clear: take care of your customers, and your business will succeed and grow. Neglect your customers, or destroy their trust, and you won’t be around in five years to talk about it.”

*This article was written by Wilma Den Hartigh and was first published in SME South Africa http://www.smesouthafrica.co.za

Back to Articles and Resources.