Customer Retention Strategy

Customer retention may be the most important part of a successful business. Companies spend a great deal of money trying to attract just a single customer, and the longer that customer stays with your company the more that investment will continue to pay off over time.

But few companies have customer retention strategies in place. Most focus too heavily on what it takes to get those customers, despite evidence that maintaining just 5% more of your customer base every year can increase revenue by as much as 100% or more (depending on the industry). The basics of customer retention involve understanding the customer’s needs, making sure that the organization is committed to customer retention from top to bottom, and rewarding employees that make retention a priority.

But even beyond that there is much more your company can do. Here are six strategies that you can use to improve customer retention.

Every company is different, so each customer retention strategy needs to be tailored to your specific company needs. That said, the following represent important parameters for such a strategy: Evidence Based/Research Based Thorough research is required for any retention strategy to work, with regular quantitative and qualitative research on what the customers need. Make sure that you are researching not only your current customers, but also those that have left your company in the past.

Evidence-based practices are a crucial part of customer retention, because only by surveying your customers can you learn what it is they really need. Organizational Mindset Any customer retention strategy needs to be initiated top to bottom in the organization. Banks right now are starting to experience what happens when the entire organization is not focused on customer retention.

Customer service at most large banks is excellent, with numerous practices designed to help customers with their needs. But the executives with many of these banks are far less concerned with customer retention, making headlines for some of their dismissive practices, and the result is that many customers are leaving these banks in favor of smaller credit unions. From the CEO to the janitor that cleans the bathrooms, everyone working for the company must be customer retention oriented.

Valuing Customer Retention in Employees Performance appraisals of your employees also need to include customer retention and service. An employee that excels at their tasks but treats the customer with disrespect will always be a worse employee than one that is a bit slower but focused on retention and friendly service. Customer service is not the only behavior that retains customers (one might say that speed and efficiency can be useful as well), but the key is to reward employees that show skills that relate to customer retention.

Continuing to Develop Products and Services Retention can’t always be in how your organization treats the customer. Sometimes it is about how much your products and services continue to meet their needs. Regular product development and satisfaction research are also a must for any retention program to work.

Field this research early and often, and not only will you retain more customers, but you may also find a competitive advantage. Communication Your company needs to adopt the mindset that every single customer is valuable. That means that you also need to create ways to communicate with the customer easily.

If a single customer is unhappy, you need to have a plan in place to address it and see if you can repair the relationship. Even if the relationship cannot be prepared, your attempt will at least inhibit some of the damage that may come from a company mistake. Clear Outlines Creating a customer retention strategy using all of this information is important.

But it’s only as useful as the guidelines and outlines you set in place to get it working within your organization. That is why you also need to develop clear outlines for every task, every behavior, and every strategy you’re going to use to improve customer retention, and you need to distribute this information throughout your company early and often with constant reminders about how important those strategies are to the long term success of your company. It may also be beneficial to use customer retention goals in your bonus rewards, or to have events that continue to remind employees why their retention work is so valuable.

It’s always important to attract more customers. But once you’ve attracted those customers, you need to keep them within the company. It’s considerably better for your revenue (potentially more valuable than finding a new customer) and makes good business sense.

Throughout the process, always remember to consult your customers to see what’s causing them to leave and what they need to remain with your company. Only then will you really be able to create a retention strategy that works. Sign up with SurveyMethods to get started.

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