Five tips to improve customer retention


Chris Summers shares five ways to help improve customer retention.

These tips can provide a valuable lesson to businesses on how to survive even in the most turbulent times.

1. Communicate the reasons behind decisions

Decisions need to be taken in business that may be perceived negatively by our customers or potential customers. These might be mergers, acquisitions, changes to products and services, or a myriad of other decisions that need to be taken every day whilst running a successful growing company.

It is nearly always not the decision itself that can lead to a negative perception but the communication of the reasoning behind the decision, and occasionally the completely inaccurate spin that is communicated to justify changes that have just been made.

If a decision is based upon sound reasoning to benefit the business, it should also follow that it will benefit your customers. Therefore, if communicated honestly and openly, it should only enhance your reputation as a company. If you can’t justify the decision to your customers without spinning it then you probably need to go away and look at the decision again to make sure you were in possession of all the facts prior to it being made.

2. Thinking rather than knowing

Thinking you know what your customers want and implementing change in products or services based upon these thoughts is one of the most likely ways to spend a lot of money with little return on investment, wherever your reasoning came from. Speculation regarding customer requirements can come from many areas within your business, such as your support team, sales force, project managers and so forth. In reality, the most forceful personality will reign supreme, with other areas of your business capitulating to maintain a working relationship with this individual or business area.

Internal initiatives and ideas should, of course, be encouraged. They are one of the ways, if not the most effective way, of engaging with your employees. But ideas that will directly affect your customer base shouldn’t be followed blindly without first carrying out customer research, no matter how forcefully the idea was put to you initially.

Research will tell you four things: whether your customers actually want the results of the initiative that has been proposed, whether the initiative will alienate a proportion of your customers, whether there is a credible chance of a return on the investment needed to implement the proposal and, possibly most importantly, whether there are other areas you should be looking at first which your customers see as far more important and offer the possibility of a better return on investment.

3. It’s time to change

All relationships come to a close in the end and the same will be true for the relationships you have with your customers. They could last a week, a month, years or even decades. It’s not something we like to think about too much, but it is a reality of business, and many relationships reach their end through a natural progression of business-related activity.

A key skill in business is maintaining a relationship for as long as possible by listening to your customers, carrying out regular net-promoter score and other customer satisfaction programmes and ensuring that you are delivering the products and services that your customers and potential customers require.

Stay as fresh and agile as possible by continually reviewing your products and services against your competitors and by keeping an eye out for start-ups making an impression in your sectors. Make sure your employees are fully up to date with your products so that when they speak to customers they are able to converse and expand upon your offerings.

4. Provide a conduit for expression

Customers are generally happiest when they feel part of a community. The need to be able to express opinions or concerns as part of an open forum can’t be stressed enough, especially if your products or service contain an element of an ongoing long-term business relationship. Providing conduits to enable this to happen as simply as possible gives you the advantage of having a larger degree of control over the content of this socialisation.

The methods of providing this conduit are now well known. They may be social-media based, forum based or even blog based, but they all have one thing in common, they bring all your customers together and give you the opportunity to engage further with your customer base.

I have worked with businesses in the past that shy away from having this level of interaction within their customer base, fearing backlashes over problems and criticism of their companies. You will, however, discover that many customer concerns will actually be addressed by other customers and are usually a result of misunderstandings that otherwise would have been left festering without you being aware there was a problem.

Likewise, if there is a legitimate concern that appears to be building within your customer base you will at least have early visibility and be able to address it more quickly than you may have been able to in the past.

The truth is that if you don’t do this, your long-term customers will move towards this method of socialising by setting up their own user groups and forums beyond your control and, what is more, may not even give you access to the conduits that they have set up.

5. Don’t underestimate the competition

No matter how large your company, and how successful you are, never underestimate the competition and blindly believe you will maintain your position due to your size, financial strength or the loyalty of your customers. Keep an eye on newcomers in your sector and watch what they do, the technology they are using and how they are engaging with potential clients. Find out where your long-term customers are going if they move away from you.

Business history is full of companies that became so dominant in their sectors that people thought they would be around forever. There used to be a saying, you never got the sack for buying an IBM PC. Try to buy one now!

Chris Summers

Chris Summers

Remember that the more you grow, the more gaps you open up for exciting new start-ups to creep in and take some of your business. To a degree this is inevitable, but don’t accept that the customers you lose were not that important to you. Find out why you lost them and what you could have done to keep them. Those smaller customers that walk away are often the solid foundation that new businesses in your sector use to get established, and they may use your lost customers’ experience not to make the same mistake themselves.

Chris Summers is the owner of Services & People

For more ways to improve customer retention, read these top tips!

Author: Jo Robinson

Published On: 16th May 2012 - Last modified: 28th Oct 2020
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