You are all excited about the holidays and sales projections but have you given any thought to making sure that clients return to your website or store next year? The cost of a new client sale is normally 5-10 times the cost of retaining a client. By using just a fraction of your sales and advertising budget toward client retention programs you will probably see a significant jump in sales for the next year.
The following tips apply to almost any business. These tips have been learned from years of having earned compensation based on client retention ratios and customer satisfaction levels. I am proud to say that I had the lowest client loss ratio (lost clients/current clients) and the highest customer satisfaction ranking in a fortune 500 company for several years. Theses tips are especially effective for small businesses and the best part about it is you do not need a lot of resources to accomplish.
Getting clients to come back a second time
Poor customer service is the number one reason customers do not return to make additional purchases. Implementing client retention programs will not only lower your loss client ratio but also increase your long term revenues. Here are 7 tips to follow.
Best practices for client retention include:
- Train all employees and yourself in how to handle problem resolution. A client that goes away because of poor customer service will never come back and will badmouth you until the end of time. The best training includes showing the client empathy but most importantly resolving the issue exceeding the clients expectations. Poor issue resolution is the number one controllable reason clients do not return.
- Collect client data when possible. The object is not to spam your customers with client newsletters or emails but to let your customers know you appreciate their business and possibly offer some incentive for a return purchase. If you misuse the information customers will not return.
- Follow up the purchase with a personal touch. A telephone call or visit is a great way to make sure the clients experience was positive and to learn how you may better service them in the future. Note – this includes small purchases or first time buyers as they may spend more next year if you exceed their expectations.
- Conduct a client satisfaction survey if possible. A typical survey will either be postcard based (encoded for security) or can be telephone based. Client surveys are very simple (4-5 questions and a rating). Accept all feedback and make secondary contact with any negative responses. It is critical that you respond personally to all negative feedback.
- Stay in touch with your customers. It always made me feel good to hear a customer say “Wow – you’re the boss and you made time to call me”. Customers love the idea of talking to the boss, it makes them feel special and heard. Never miss the opportunity to say hello to a client. Make calling or visiting your clients a requirement for you and your staff. Build the relationship.
- Collect testimonials letters or emails from your clients. If you are a storefront operation post them on the wall in a frame near the entrance. If you are an online merchant post them on your website. Testimonials have enormous positive impact for prospective clients but are also great for your staff’s morale.
- Reward your staff for good customer service. Happy employees provide better service. Rewards can be as simple as a sticky note saying “Great Job” all the way up to some form of compensation (time off, bonus etc.). Raise the standard of your organization and embed exceeding customer service into the culture of your business.
Your company’s image on customer service cannot be bought, it has to be earned. Customers return or will continue to use your services when they feel you have exceeded their expectations. Just meeting expectations is not enough. Building the relationship through client retention programs effects the long term revenue of your company which is your survival.
Not sure how to get started? Contact The Entrepreneur’s Advisor™ for help.
How do you practice client retention at your company? Share your experiences with us here by leaving a comment for others to see.