According to Marketing Insights from A to Z author, Dr. Philip Kotler, most businesses spend approximately 70% of their marketing budget on attracting new clients rather than investing in improved relationships with the ones they already have. But consider the value of keeping current customers happy:
- Repeat customers spend 33% more than new ones.
- It costs six times more to sell something to a new prospect than to a current customer.
- Depending on the industry, just a 5% reduction in the customer defection rate can increase profits by 25 to 85%.
It's Not Just Your New Year's Resolution...
According to global consulting firm, Protiviti, the top business challenge for non-financial service companies in 2012 will be improving customer loyalty. Businesses have learned that no matter how great they think they are, their customers will be the ones to say whether or not that's true. And for companies with thousands or hundreds of thousands of clients, showing true customer care is no small task. Savvy customers can detect insincere efforts, especially when customer appreciation efforts seem to coincide with contract renewal dates.
5 Ways to Keep the Customers You Already Have
So don't wait until a client is halfway out the door before you ask them to stay. Here are 5 ways to ensure your customers remain where they are, and realize that they're in good company:
1. Listen. Listening is a must for both attracting and keeping clients, but it's something businesses and organizations often find challenging. Many companies have trained their sales staff and CSRs to reply with rehearsed answers when it comes to responding to their customers' common challenges. But to build customer affinity, companies must truly listen to each customer's unique questions and conversations and reply with a custom response.
Organizations must also make an effort to listen across more channels. As customers become more connected, so must companies. Be a part of online conversations across a variety of venues, and proactively engage your customers with feedback requests and customer service satisfaction surveys.
2. Respond. Make a concerted effort to effectively engage with customers across all major touchpoints, including social media. A 2011 Maritz Research study shows that 70% of customer complaints on Twitter go unanswered. An organization's social media presence should involve two-way conversations, especially when initiated by a customer complaint.
Go the extra mile to ensure customers receive the most helpful answers possible. Involve all departments in customer service, because not every customer question on your website or on Facebook can or should be answered by marketing or your PR firm.
3. Make it easy to be a satisfied customer. Give your customers the information they need in clear and easy-to-understand language. How-to videos are becoming increasingly popular, as people no longer want to spend time reading detailed descriptions or instructions.
Provide more customer self-service options, and improve personal customer service by giving customer service reps access to each customer's complete service history. When a CSR thanks a customer for staying with their company for five years, or knows that a customer has had service problems before and needs extra TLC, that can make all the difference when it comes to customer retention.
4. Reach out. Nurture your customers with an attitude of gratitude and an exceptional customer service experience every time they make contact with your organization. Through blogs, social media and e-newsletters, provide them with content and tips that they will find interesting or helpful.
5. Keep it Real. Automated responses are no longer acceptable. Real customers want to do business with real people. Build customer relationships through conversation and showing the human aspect of your organization. Through numerous studies, behavioral psychologists have shown that more than 70% of consumer loyalty and spending decisions are based on emotional factors. In relation, a Core Communications study found that consumers are more likely to be loyal to a brand based on the charities or causes it supports.
Even the biggest companies have begun focusing on the human aspect of their organization, as witnessed by personal-care-centered ad campaigns such as Flo from Progessive, Charles Schwab's Talk to Chuck, and State Farm's friendly Jessica. In a world focused on technology, customers still need - and want - a human touch.
So in 2012, make a resolution to listen, respond, reach out, keep it real, and make it easy for your current customers to stay loyal to your brand. Appreciating and keeping the customers you have is the key to sustained success. Winning new clients (especially through customer referrals) is an added bonus.