Many businesses (quite rightly) have strategies in place to attract prospects and convert them into customers. But one area where lots of companies are leaving money on the table is customer retention.
Consider these two statistics:
- It costs five times more to attract a new customer than it does to retain an existing one
- Increasing customer retention by just 5% can increase profits by 25% to 95%
[Source: Bain & Company]
These numbers alone should be enough to make you leap up and start improving your customer retention game immediately. But add to this the fact it’s easier to sell to existing customers than it is to strangers and you’ve got all the ammunition you need to push customer retention as a priority.
Review and grade your clients
So where do you start? Well, you’ve inevitably got a number of customers and they all look (on paper, not in person) very differently. You’ll have some who you consider your “best customers” and others who, while you obviously appreciate their business, aren’t always the easiest to please or don’t spend as much with you.
Now you’ve only got so much time to spend pleasing all your existing customers, which is why it’s essential for you to grade them based on how valuable they are to you. You can then focus the lion’s share of your attention and time pleasing your A-grade (the best, most profitable) customers going forward.
An A-grade customer might be one who spends lots of money with you, gives you the most referrals and/or has the most potential for future business. Meanwhile, your less attractive customers might get a C, or even a D if they are poor at settling invoices on time, etc.
Then provide sterling service to your A-list
With your customers graded, it’s time to focus on providing unwavering service and adding consistent value to your A-list. Whether it’s something as simple as personally calling them once a month to check in on them (not to sell to them) and ask how everything’s going, or sending them some useful material on a regular basis, the ultimate goal is to get your A-grade customers to think, Wow! The service I’m receiving here is out of this world.
Then, when they do have a need or are in the market for products/services like the ones you provide, you’ll be at the forefront of their minds.
As always, developing a strategy is just part of the puzzle. You also need to write it down (so that you can really scrutinise it and shape it as you wish) and then effectively implement it.
The bottom line is successfully gaining new customers is tough. That’s why focussing on your existing ones can be such a rewarding investment.
Did you find this post helpful and insightful? You can afford even more value by booking a free 30-minute strategy call with Dylis.
You’ll come away with not just a high level strategy for your business, but also feeling inspired, renewed and re-energised to drive even more revenue going forward.