In the “What have you done for me lately?” marketplace, repeat customers are not a given—they have to be earned. A Bain and Company report released in April 2012 reports that it costs six to seven times more to attract new accounts than it does to keep existing ones. Moreover, when customer retention is increased by just 5%, profits can jump by 40% to 90%.
But keeping customers doesn’t have to mean expensive client dinners and extravagant loyalty programs. Here are seven effective and affordable ways to make sure you have return customers:
1. Fix problems in one phone call
The optimal goal for frontline staff is “first-call resolution,” meaning a customer concern or complaint is handled effectively in one call. Dolly Konzelmann, president of the Toronto chapter of the International Customer Service Association, recommends a four-step process: create a rapport, understand the complaint, take the appropriate steps to fix the problem and finally, make sure the client is happy and will come back to the company.
2. Deliver personalized service
For the price of a stamp, a page of company letterhead and an envelope, a handwritten note from a senior executive or staff member is more effective than many other customer retention strategies. Remembering a client’s birthday or sending a sincere thank you for business isn’t just common courtesy, it’s good customer relations.
3. Seize bond-building opportunities
Sales staff and senior management that interact with clients should look for any opportunity to relate to them. Learn your clients’ interests and use that information to build a rapport. For example, Tanya Maier, president of Montreal-based Foresight Strategies, a company that provides sales, motivational and golf-as-a-business-tool seminars, occasionally sends gardening magazines to a client with a green thumb. She says it develops a connection past a simple supplier/customer relationship, and keeps her name fresh in that customer’s mind.
4. Conduct special events for valued clients
Unlike special offers, which are price-based, special events for select customers are value-based. Offering invitation-only access to events such as industry trend forums, gives insightful, practical knowledge to clients and tells them they are appreciated.
5. Offer up real people
Customers are not resistant to automated technologies; they just want ones that work. Harris Interactive, a Rochester, New York-based market research company, says that when it comes to touch-tone transactions 87% fail and 85% of consumers are dissatisfied. Customers need to be able to easily reach a real person who can direct their call to the proper employee.
6. Follow up
Because most unhappy customers will not tell you that they are unhappy, both Maier and Konzelmann recommend a customer feedback system that encourages people to complain before they become irate. By engaging the client in two-way communication through surveys and feedback, companies gain extremely valuable customer intelligence. Warning: there’s more than lip service to collecting customer feedback; the client has to see you are committed to making improvements based on their responses.
7. Publish an e-newsletter
One of the most cost-effective ways to retain clients is through an e-newsletter. E-newsletters inform clients about your products and services, which allows them to make better purchasing decisions. They provide an affordable method of keeping your company name and brand in front of customers on a regular basis, build trust and perhaps develop customer relationships.
© 2005 A. Charlotte Riley