Customer Loyalty is not earned solely on “perks”.
If a hotel gives customers 5x more points than others but has horrible service, rooms are unclean, etc…no one will continue to stay with them.
While perks are important, they are not the silver bullet. Customer loyalty is a battle that is fought every single day…every single day!
Here are some fundamental elements to winning the battle…
- Deliver during the “Moments that Matter” to your customers.
- Customer Care and Service Execution should be everyone’s focus, no matter what function they are in…even accounting!
- Always ask “What did we do today to keep our customers?”
- For every 1 new customer gained, you need to make sure you’ve kept at least 2 existing.
- New offering & capabilities should always be presented to existing customer before new ones.
Moments That Matter
Your customers will experience some sort of pain during their relationship with you. It can be anything from not being able to pay the current month’s bill in full to being stranded mid-travel and so on and so on.
This is a “moment that matters” to your customer and your opportunity to create a strong bond with them.
This is also where a lot of companies fall short.
Being able to empathize with your customers is something that needs to be trained across your organization so that you are able to provide the best possible solution to solving your customer’s pain point.
The companies that fall short here are the ones that are focused on how to cut their operational costs around servicing the customer that it ends up weakening the relationship.
Cost cutting is definitely necessary, but only where it makes sense and doesn’t diminish or weaken the relationship you have with your customers.
No matter what the function is of a group within an organization, everyone should be focused on customer care and service delivery, everyone.
Creating a culture where everyone is able to articulate the importance of retaining customers is no easy feat, especially for groups within the organization that do not have direct visibility on the customers (like accounting, as an example).
Start small, but start at the top and drive it down. An easy first step is to ensure that everyone has access to and understands the value of each customer.
When people are able to quantify something, they are able to see the impact.
What Did We Do Today to Keep Our Customers?
This is a question that should be a part of the culture and at the core of every initiative.
All of the calls that have come in or projects that are proposed should be able to answer this question.
Gain 1, Keep 2
Most companies understand the importance of keeping customers; however, we’ve seen this time and time again when it’s crunch time, the focus and investment goes towards new sales.
Obviously sales is critical, but if you are relying on new sales to sustain your business, then you’re hemorrhaging from your existing customer base.
There are companies that are sales machines. They are very effective at acquiring new customers and increasing the investment in sales makes sense.
However, a good portion of those same companies are losing just as many customers as they are gaining!
In other words, they are spending more and more just to be in the same spot and stay in business.
Outrunning churn is not a growth strategy, it is not sustainable and will negatively impact your profitability exponentially year-over-year.
New & Shiny for Existing First
For the reason mentioned above how new sales seems to take priority, companies offer the “new & shiny” to new customers.
The issue with this, is that your existing customer base will feel bamboozled, especially if they just bought from you and a week later something new comes out.
A key benefit of this is that the new offering will be at a higher margin since it is cheaper to market to your existing customer base.
Remember, it costs 5x more to acquire a new customer than to retain an existing one.
By focusing on your existing customer base as if there were no new sales, you’ll begin to build the core foundation for having sustainable, long-term growth.
Here are some recommended actions to help you focus on strengthening your retention and winning the daily battle.
- Run an analysis to see the financial benefits of increasing your investment to retain and decreasing (or keeping the same level) your investment for new sales.
- Prioritize your top 3 initiatives that will attach churn aggressively.
- Review your current customer engagement framework and see where you can improve communication, product offering, and customer feedback.
- Emphasis on Retention is a core competency and make it your competitive advantage in the marketplace.
- Begin offering the “new & shiny” to your existing customer base first.
Strengthen retention is no trivial feat and there is a lot more than what is listed; however, this is a solid start to having a solid customer base that continues to grow.
Reach out to us to learn how we can help you make retention your competitive advantage.