Why Customer Retention Matters6.09.2021
For many businesses, the key goal is to drive growth by acquiring new customers. However, the probability of selling to a new customer sits somewhere between 5-20%. While that number rockets all the way to 60-70% when it comes to selling to an existing customer.
Simply put, keeping existing customers happy and satisfied is one of the most efficient ways of driving business growth.
So, where do we start?
Harnessing customer feedback
We need to first start by understanding how our customers are feeling. Are they satisfied with us? Would they recommend us? Do they want to stay with us in the future?
How and when we ask our customers for feedback is important. Here are some top tips when it comes to collecting customer feedback:
It’s important not to spam your customers with endless surveys. Aiming for 2-3 surveys a year is a good starting point. This will give you enough information to gauge customer perception, without overwhelming them.
Make sure the questions you are asking are relevant for the customer you are speaking with. For example, if you are asking how they found their recent purchase but they haven’t made a recent purchase, they’re going to switch off because it’s not relevant for them. Check that every question you are asking is appropriate for the recipient.
A good measurement for success is response rate. Generally speaking, a good response rate is around 30%. You can work out your response rate with this simple calculation:
Response rate % = number of customers who completed the survey / total number of customers you sent it to x 100
By going into this with a goal in mind, it will help keep a clear purpose and measurable outcome.
Adapting to customer needs
It goes without saying, the happier a customer is, the more likely they are to be loyal to your business, and as a result the more likely they are to increase spend.
Customer retention goes beyond a biannual survey. We need to be constantly listening to our customers and adapting to meet their changing needs.
Think about wider macro issues and how these might be affecting your customers. Is there something you can be doing to help solve this issue, or at least lighten the load?
Listen and adapt.
Its human nature to want to feel valued and that applies to customers too. Your most loyal customers are one of your businesses greatest assets so it’s important to show them your appreciation from time to time. And it doesn’t always need to be a grand expensive gesture, just remember it’s the thought that counts.