The Customer Challenge
Acquiring customers is a big challenge for many companies. Figuring out how to stand out from the crowd and then convince customers that you are the one that they want to do business with can be an expensive and challenging process. It’s also important to work on your customer retention strategy from the start to make them fans of your product or service so that they 1) continue to buy your product or service and 2) tell others about you in a positive manner.
Businesses always need new customers. Customer churn is a fact of life, so we have to put our best foot forward and continue not only recovering the churn, but also building our business by acquiring customers on top of that.
Accepting that you’re going to lose customers means that you are accepting that you are going to lose revenue that is cheaper to retain than to generate new business.
Studies have shown that 80% of your future profits come from 20% of your current customers, and a 5% increase in retention can result in a 75% increase in profitability. How can any business pass up an opportunity like that?
The Recipe To Retaining Customers
The recipe is simple enough: In order to retain customers, you need to treat them well so that they want to continue doing business with you. Of course this tactic varies not only by industry, but even what works for a competitor may not work for your business. Each group of customers require a custom approach to keep them engaged and happy.
Trends Of A Dissatisfied Customer
Recent trends have shown that it is increasingly difficult to stay ahead of dissatisfied customers. In 2007, a search for ”˜customer complaints’ on Google produced about 1.17 million complaints. In 2010, the number of results had increased to 3.36 million. A search in 2016 produced over 6 million results.
An average dissatisfied customer will tell 11 people about their experience with a business. With online reviews, it’s possible that number is quickly amplified due to the larger audience We all know that there will be bumps in the road; so if you can address customer issues promptly, you are more likely to avoid having dissatisfied customers broadcasting their dissent to their friends and family (or whoever may read their online reviews).
How Millenials Are Changing The Way For Customer Reviews
What others are saying will become more and more of an influence over buyer’s decisions in the coming years. According to a study by Bazaar Voice, 84% of Millennials said that user generated content (UGC) has influence over their buying decisions. That’s compared to 70% of boomers considering UGC as a factor in their decisions. That same study also showed that 51% of Americans trust UGC more than what is included on a company website or in news articles about a company.
Millennials have also shown a tendency to value the opinions of strangers (51%) slightly more than the opinions of their friends and family (49%). In contrast, Boomers favor the opinions of friends and family (66%) to that of strangers (34%).
As Millennials continue to gain more buying power, it’s also important to consider that because they value the opinions of others, that they want more venues to share their opinions as well. Providing that forum not only gives them the opportunity to do so, it gives companies a chance to show that they are responsive and care about resolving customer issues.
68% of customers leave because they perceive you are indifferent to them. 9 out of 10 customers who have their issue resolved quickly and efficiently will come back for future business.
That’s a lot of stats I’m throwing around, but all point towards making sure that customer retention is a key part of your overall strategy. Given that so much customer feedback is done online, it’s very important to make sure that you are managing your digital presence through social media and any other touch points you have with consumers.
Not having a customer service-centered approach to your retention strategy may be costing you dollars. Create a strategy, increase profit, and reinvest those dollars in acquiring new customers!
Remember: Happy Customers + Retention Strategy = Increased Profits!