• Going for new clients?– Entrepreneurs fail to effectively address the need to retain customersthey already have.• It’s far easier to sell to existing customers– About 50% easier according to Marketing Metrics• Startup entrepreneurs find it more exciting to focus oncustomer addition– A bird in the hand is worth two in the bush
Never Underestimatethe Value of Retention• Do you think customer retention plays a relatively minor role?– According to Bain and Co., a 5% increase in customer retention canincrease a company’s profitability by 75%– 80% of your company’s future revenue will come from just 20% ofyour existing customers. (Gartner Group statistics)– Attracting new customers will cost your company 5 times more thankeeping an existing customer.
Implement an EffectiveCustomer Retention Program• Customers don’t owe you their loyalty– You have to earn it• What customer retention program does?– Identify, track, and custom promote to those customers who are mostlikely to become loyal, long-term sources of revenue.
Avoid MisreadingYour Customers• Misunderstanding how customers think keep retention rateslow– 80% of companies surveyed said that they offer superior customerservice, but only 8% of their customers agreed with them. (HarvardManagement)• Why your customers followed you on social sites?– companies listed discounts and purchases among the least importantreasons.– Customers listed discounts and purchases as the major reasons forfollowing a company on a social site• Focus more on actual customer behavior, not on thepredicted behavior
Engage Customers ThroughSocial Media• Dial down the corporate presence– Give your customers a voice and a forum– Let them build the traffic• Have Facebook fans and twitter followers? Stay Engaged– Immediately respond on whatever is being said (both good and bad)about your company.– Identify customers (followers) who are the most loyal, send thempersonalized “thank you” emails, incentives, coupon codes– Always want to take care of your social media savvy customers, theycan either be your most powerful advocates or your biggest PRnightmares.
Run Relevant Promotions• Remember?– 80% of your future revenue will come from 20% of your currentcustomers.• keeping customers actively engaged with your brand– Make them feel good about doing business with you– Encourage them to do more of the same• On a more personal note:– Promotions such as sending promotional gifts, birthday cards, orstaying in touch over the holidays
• Being passive about customer retention only leads to greaterattrition• Companies that play an active part in communicating withcustomers to keep them engaged have better customerretention program; greater customer loyalty