Customer retention is on the minds of small and medium businesses across the world. With rising customer acquisition costs, businesses need to get innovative and start taking a proactive role in retaining their clients.
Studies from the U.S. Small Business Administration and U.S. Chamber of Commerce have found that acquiring new customers can cost as much as five to seven times more than simply retaining existing customers. Considering customer profitability tends to increase over the life of a retained customer, there is extra incentive for business to allocate more resources to sharpening up their customer retention strategies.
Common reasons why Customers leave a brand are as follows:
- 68% leave because they were unhappy with the service they received
- 14% were unhappy with the product or service
- 9% decided to use a competitor
Set Customer Expectations
The best thing you can do to start building better customer retention is to set client expectations early.
A great way to foster loyal customers is to "under promise and over deliver" on the expectations you originally laid out. For instance, Datto states in its customer SLA that any ticket submitted with an "urgent" priority will be replied to within one hour. In reality, the response time on those tickets is closer to five minutes.
By setting expectations early, you are able to eliminate any uncertainty as to the level of service you need to be providing 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.
It's important to know that clients tend to remember negative experiences. So if you have over delivered in the past 20 occasions but that one time you undelivered – your client will no doubt quote that negative experience as a reason to cancel their contract with you.
Be the Expert
Becoming your customers' trusted advisor will build customer loyalty and reduce customer churn.
By becoming this trusted source on all things technology, you build that relationship which leads to a loyalty. They trust you and rely on you to give them the best advice and become an integral part of their business success.
If you are looking for ways to build trust with clients, take a look at some industry specific problems facing your clients at the moment. Compliance and regulations are big buzz words among small businesses, so as an IT Company, this provides a perfect opportunity to demonstrate your expertise and build trust with your clients.
This proactive, personalized approach will go a long way to building customer loyalty and contributing to your customer retention strategies.
Build Trust through Relationships
As the age old saying goes, you do business with people you trust. Trust is a big factor in business and building relationships with your clients will go a long to gaining their trust.
A study by the African Journal of Business Management found that as trust increases, commitment tends to get stronger. It goes on to recommend building trust through shared values.
Shared values are areas where you can share an interest in their business. It means you actually need to take an invested interest in your clients. Do some research into their business, understand how you play a role in there day to day activities and use this to strengthen your relationship. A good way to start is by asking one simple question next time you stop by for a quarterly check-up.
Ask your client - what differentiates them from their competitors. Once they tell you, 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.
It’s no longer good enough to just provide a service – as competitors enter your market; you need to start building these shared values with your clients and show you have an invested interest in the success of their business.
Implementing a relationship marketing strategy is paramount in a service based business.
To get you started, here are two quick ideas you can do to start relationship marketing:
To get you started, here are two quick ideas you can do to start relationship marketing:
1. Implement a monthly email marketing campaign
This is a lot easier than it sounds. You want to be emailing your existing customers once a month. Touch base with them, inform them of any recent news or services, and share a couple of great articles you think will help them with their business. You should also link to your articles (see below) as a way to drive your customers to your blog.
Start a blog
Write a weekly article on something interesting you did that week. Something that you feel your customers would value. Maybe it’s a new product that can help save your clients 20 minutes a week, or maybe it’s a whitepaper that provides great insight into employee management. Be consistent with your blog and start using it as a way to build relationships with your customers.
Implement Anticipatory Service
Anticipatory service is a proactive approach to customer service.
Instead of waiting for problems to occur, a company who implements
anticipatory service can eliminate problems before they happen.
To achieve and maintain this harmony, today’s companies must establish a dialogue with customers that shows an awareness of their information needs and respect for their communication preferences. When consistently given valuable information, customers can form a durable bond of loyalty to the brand due to the relationship that was formed.
Let's take a look at two examples of anticipatory service:
1. A major airline proactively texts customers to advise them of flight delays
2. A corporate billing department alerts customers when an invoice is nearly due
In both of these examples, the company is taking a proactive approach to what could’ve otherwise end up being a negative experience.
With the airline, no one likes to arrive at the airport and find out
their plane has been delayed for 50 minutes. Likewise, with the
corporate billing department, you don’t want to be hit up for reminder
invoices and late fees when these reminders could have been sent prior
to the deadline.
You should be looking at ways you can stop problems happening by being proactive. A good idea that you can implement today, is a quarterly or half yearly, on-site check-up.
By being proactive – you can save yourself a lot of reactive problem fixing in the long run, as well as building the perception of ‘anticipatory service’ with your customers.
Make Use of Automation
Automaton tools allow for the time-consuming tasks requiring manual
intervention to be standardized into repeatable processes. Companies who
leverage automation are able to focus more time on minimizing downtime
and keeping clients networks performing at their best.
Companies are typically bound by contracts that guarantee their services and make them accountable to clients. By leveraging automation tools, and streamlining repeatable processes, companies can better meet their commitments.
By standardizing your processes and setting expectations for service levels, you can increase customer loyalty which will lead to improved customer retention rates.
Build KPI’s around Customer Service
A great way to improve customer retention is to improve customer service. As outlined at the beginning on this post, 68% of your customers leave
because they were dissatisfied with the service. The team at R&G
Technologies, facing ample dissatisfied customers, set out to rectify
the problems right from the source.
R & G implemented customer service KPIs built around their contractual agreement. This way, every R&G employee’s performance was being measured and incentivized based on their level of service, which was closely tied into the client’s goals.
Go Above and Beyond
Companies often overlook how important this is. Going the
extra mile for your customers is an easy way to build strong
relationships. As a service business, you have lots of opportunities to woo your clients and go above and beyond what is required.
By doing this, you can build some serious long term loyalty. If your clients no you are prepared to do that bit extra, they will stick with you when competitors start knocking on the door.
Here’s a couple of ways you can go the extra mile for your clients:
Pay attention to what you customer wants and make their issues, your issues – be proactive in addressing them.
Go out your way to point out some potential issues and fix them before they become problems.
Implement Customer Feedback Surveys
Customer churn can be avoided by simply just listening to your customers. Customer feedback surveys are a great way to learn how your service is performing in relation to your clients expectations.
defines customer retention as being individualized and varied across
the kind of product or service provided, the kinds of customers served,
the number of customers served, the longevity and frequency of
customer/supplier interactions, and how you intend to grow your
Client Heartbeat has identified three key metrics you need to monitor to ensure you can measure customer retention most effectively:
Firstly, you need to monitor customer feedback on an individual level. You’d be wasting time comparing feedback across a wide, broad range of customers. You want to narrow down to a specific client, see what they thought and take action from there.
Secondly, you need to trend feedback across a period of time. You need to be tracking feedback survey to survey so you can see which areas have improved and which have suffered.
Thirdly, you want feedback from customer surveys to provide intelligence. You need it to provide you with data as to what customers are at risk, which areas of your business need improvement and where your business' strengths lie.