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Customer Retention — 4 Ways to Improve It!

Customer Retention - 4 Ways to Improve It!

Customer Retention – 4 Ways to Improve It!

In business it’s all about the customer.

I’ve written quite a bit recently about finding the right customer for your business and how important it is to identify your target market. Let’s talk now about value-added marketing. Why value-added, simply because we know it’s easier and more cost-effective to keep a customer than it is to get a new customer.

Value-added marketing takes place once you have a customer. The roots of value-added direct marketing go back to the 1980s and the Hunter Business Group, LLC. Originally designed as a business-to-business (B2B) model, the core idea was to market to individuals rather than departments or companies.

While originally a B2B idea, much of value-added marketing can be used in our modern, internet-driven, businesses.

In their book, Successful Direct Marketing Methods, Stone and Jacobs identify a four-stage process for bringing value-added direct marketing to a business and improving customer retention. Here are the four steps you can use to market to INDIVIDUALS:

  1. Understand your customer
  2. Develop a communication strategy
  3. Cultivate retention and loyalty through customer service
  4. Gain new customers based on current customer experience

Let’s break each of these points down so we can better understand how to make the value-added model work for you.

The first step to developing value-added marketing to your business is to understand your customer by LISTENING to the customer. At the point of sale, are you asking, why? Why did the customer buy your product or service vice a competitor’s product or service? What are your customer needs? Let’s face it; any product or service fulfills a basic need of your customer/client. It’s listening to your customer, identifying and fulfilling those basic needs that begin the customer retention process.

The second step of value-added marketing to consumers is developing a communication strategy. Here’s an idea: when you send an opt-in page confirmation to a new prospect from your website or send them a sales confirmation receipt; why not ask them what they prefer when it comes to communications? Why not survey them at the point of sale how they’d like to be contacted in the future AND how often? If not asked at the point of sale or at opt-in, you could ask at some point soon thereafter.

If you’re like me, I opt-in to pages to get information but I DON’T like getting overwhelmed by volumes of sales emails or irrelevant information every day! Think of your customer and ask what they want…you might be surprised and you just might see your customer retention improve as well.

The third step in our value-added phase is to cultivate a relationship through a magnificent customer service experience. Do that and your retention and loyalty will explode! Take the time to identify, over a period of set time, every point of customer contact.

How NOT to Improve Customer Retention

The other day I called one of the larger bank and credit card companies in America. I’d called to close out the account on a credit card we’d had for a specific purpose and no longer needed. After a 45 minute wait, no, you didn’t misread the time, I hung up.

You’ve got to be kidding, right?

Why in the world would a company EVER allow that long of a wait? During the 45-minute long torture, I had to endure a constant bombardment of mini commercials. The most maddening was the one that told me, “Your security is our number one priority.” Every time I heard that comment, in my mind I was saying, “well it certainly isn’t customer service with this type of wait.”

I have to admit, that long wait solidified my decision to NOT do business with this big bank in America. Oh, and just so you know, I had to hang up and call back. The second wait was only 15 minutes long—only.

That’s one of the MAGNIFICENT points of being a small business, by the way. As a small business you can be much more responsive than the megaliths that should fail when they get too big. Take the time to cultivate great customer service and you’ll reap great benefits.

Gaining Customers Through Customer Retention

The last point of providing a value-added customer experience is gaining new customers based on the current customer experience.

If you’ve ever been to one of those high-pressure timeshare presentations you’ll relate to this.

You’ve just sat through a 2-hour long presentation you were assured would only last 45 minutes. You’ve told the sales rep no about fifteen times, you’ve told his boss now another fifteen times and then the closer comes in. The close hands you a sheet of paper and says, “Well, Mr. and Mrs. we’re sorry you don’t want to purchase an overpriced millstone around your neck today. I can let you go and give you your free gift as soon as you give me the name and phone number of at least three of your worst enemies that you’d love to have endure what you’ve been through for the past two and a half hours.” And he/she smiles at you.

Oh God, give me the pen right now and let me outta here, you think!

Forking over a bunch of names, recommending these guys is just the opposite of what you or any other rational human being would want to do.

So let’s flip this scenario and instead make the experience so outstanding, so incredible your customers or clients will be begging you to work with their friends, relatives, and anyone else they can point in your direction.

The key is to expect referrals. In fact, if you do everything right, you’ll get them.

Customer retention is important because the cost to you as a small business owner is always higher getting NEW customers. Treat your current customers with care and not only will they stick with you through thick and thin, they’ll continue to purchase from you and provide you with referrals to grow and expand your business.

Put these four value-added ways to use in your business and your bottom line will soar!

Here’s to your success!

Is your company customer centered?
Leave a comment below and let us know how it’s working for you!

 

 

Keith is the resident writer and troublemaker at Empowered Pros.
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