Customer Experience

One of the best ways to drive profitable revenue is to increase customer retention – and customer retention is probably one of the most overlooked opportunities in business today.  Why?  Because so many assume that “…if they bought once, they will buy again…”

So what do leading sales and marketing organizations do to ensure a high customer retention rate?

Talk with the customer.  Find out what they like about your company, products, services and experiences.  Find out what they don’t like about those same things.  And then find out what they would like to be able to get from you, but can’t because you don’t

offer it.  Finally, ask if there are any things you do offer that they don’t see any value in.

Use that insight to drive your retention strategy.  Your customers will tell you what the value and what they don’t care for at all.  Listen.  Learn.  Respond appropriately.  And as you respond to their input, talk to them – let them know you are doing X because of their input.  Never assume they will recognize the change has been made or that the change was made because of their input.

Talk with former customers.  Find out why they left, and if there was anything you could have done to have kept their business.

Your retention rate will NEVER be 100%.  People die.  Businesses close.  Both can relocate outside the geographic market you serve and won’t be able to access your products.  So when you interview former customers, you need to determine what percentage could have been retained.  Then use that information to set your goals for success.

Identify the actions of at-risk customers. Study the behavior of your former customers – and identify the things they did (or didn’t do) leading up to their defection to the competition.  Did order frequency drop?  Or order size?  Did they start slow paying?  Or returning more products?  Did they start calling your accounting department and asking for discounts?  Or your warehouse and asking for faster delivery?

Use that information to build an ‘early warning system’.  This can be a simple list that your organization is on the lookout for to a data-driven model.  Either way, your early warning system is useless unless it triggers a highly effective …

Develop an early-intervention process.  Once the warning system is triggered, have the right people with the authority to do whatever is deemed appropriate to retain the business jump into action.

Do you have any other tips or best practices that have worked for your business?  I would love to hear them – so feel free to share in the comments for this post.