The truth behind customer retention.
Whilst researching “The truth behind customer retention” I found an important statistic.
It claimed, 77% of brands could disappear from the face of the world and consumers wouldn’t care.
Taking this thought onboard, ask yourself would your customers care if you disappeared?
Have you built up enough of a reputation, enough importance to their lives or businesses to mean something, more than the 77% that if disappeared wouldn’t be missed?
With 82% of companies agreeing retention is cheaper than acquisition why is there still such a disconnect between businesses and their customers.
If you’re thinking that you’re excluded from this, that you’ve always put your customers first, that your customers love you, then take a moment to read some of the common frustrations I hear below and see if any ring home.
I gave them everything, but they still left.
It’s important to note that there’s a difference between ‘desperation’ and ‘working with an unhappy customer’ to fix an issue.
Often when a customer complains sales managers or business owners will throw as much mud at the wall in desperation to see what sticks.
Although this might make a customer happy it won’t fix the root cause of the issue and it won’t inspire them with the confidence of it not happening again.
As business owners we tend to shy away from looking too deeply into problems in case we discover it was actually our fault.
Instead, we go for the vanity mentality of blaming the customer for not giving us enough information and therefore we have to give them more and more just to just make them happy.
The latter is the wrong approach.
I don’t know how my customers feel.
You may think you know, but are you guessing based solely on the conversations you’ve had.
As I mentioned above, we tend to shy away from difficult customers prioritising those we know love us, which can give us a distorted view of how all our customers perceive our services.
If you are worried about speaking to those you know might be challenging, then use something like a Net Promoter Score.
This tool allows your customers to rate you between 1-10.
You can then take that score and get an idea of how well your business is performing and if you are doing enough to drive customer retention.
A score between 9-10, your customers are promoters, loyal enthusiasts who will keep buying and refer others, fuelling growth.
With a score between 7-8, your customers are passives, satisfied but unenthusiastic customers who are vulnerable to competitive offerings
A score between 0-6 puts your customers in the category of detractors, which highlights their unhappiness and might damage your brand through negative word-of-mouth.
How can I analyse my customer retention?
There’s many ways to analyse your customer retention.
From Net Promoter Scores, surveys, web-based data analytics to the more simple approach of monitoring your sales funnel and looking for signs of growth.
If customers are buying over and over again, and you’re making money then there’s a high chance your business is doing well at customer retention.
Of course, please don’t rely on this as the sole indicator but it’s a great starting point.
If you’re unsure how to monitor that data then use my free Target Setting and Churn Rate calculator.
This will help you know what customer retention targets you need to hit and how well you’re doing.
You’ll find this course amongst other online courses here 👉🏼 Online Courses
If you’re a top tip list kind of person take a read of this Top 5 on Customer Retention.
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