The simple secret for improving the profit – Customer Retention

Did you know that 96 percent dissatisfied customers don’t complain?

In most of the cases, lost clients just walk away, and you’ll never know why. They don’t reveal the real reason. The reason for that is they don’t know how to complain, or can’t be bothered or don’t believe it’ll make any difference. Whilst they may not tell you what’s wrong, they will certainly tell plenty of others. Here is the interesting point. If you want these clients back, listen to their complaints.

What is Customer retention?

Customer retention refers to the efforts companies take to reduce the number of lost customers. The goal of customer retention is to retain as many customers as possible, often through good customer support and relationships.

Why to win them back?

Since so many resources, our time and money are already invested to build the relationships; it will be cheaper to continue building it with lost clients and try to win them back.

• Apart from the relationship we already have, existing customers are the most predictable source of revenue.
• A key person at the client that we built relationships with, may move to another company and bring this company to us as a client (based on the great relationships we build with him/her)
• When clients go elsewhere, they often share their bad experience with others, and if we keep our relationship with them, they may refrain from doing so.
• By maintaining the relationship we prevent the entire lead source to be cut off and we will have a chance to get leads in the future, our lost client’s referrals.

Do we improve profits by retaining customers

An average business loses around 10-20 percent of its customers annually simply by failing to attend to customer needs. The impact due to customer churn is staggering, but few businesses truly understand the implications.

Imagine two businesses- X and Y, X retains 90 percent of its customers, while Y retains 80 percent. If both add new customers at the rate of 20 percent per year, X will have a 10 percent net growth in customers per year, while Y will have none. Over the next few years, purely by compounding, the first will virtually double, while the second will have no real growth. Considering everything else is equal, that 10-percent advantage in customer retention rate will result in a doubling of customers every seven years without doing anything else.

If we understand compounding, we will know that even a tiny change in customer retention can build up and multiply over time. The resulting effect is long-term profitability and growth.

The easiest way to grow our customers is not to lose the ones we already have.

How to bring them back

Re-contacting and reminding them of our existence, finding out why they’re no longer using our service and demonstrating that we still value and respect them will usually result in bringing back the clients for at least other services. The next six steps will show the best ways to do that.

Prioritize Lost Customers

It is time to prioritize these customers in our marketing efforts. Need to focus on them and nurture our relationships with them, on a regular basis.

Find out the reason

We need to follow up with each lost client and find out exactly what is the reason we lost them. We need to find and capture the real reasons. We need to learn from it. Even if we don’t get them back, we have information which can be used to prevent another customer from leaving, too.

Follow up

One of the most effective ways to connect with lost clients and to get them back to us is to keep them as part of our newsletter or email marketing we send on a regular basis to our clients. The contact always has to be real, authentic and sincere.

Take Responsibility

We should not be defensive and should take responsibility toward our lost client and apologize, if appropriate.

Use the Power of Complaints

We need to think carefully about the manner in which we respond to complaints. This will give us another chance to show them who we are and increase your customer loyalty dramatically.

If you are interested in knowing what other companies are doing, you can check https://blog.hubspot.com/service/customer-retention-strategies