9 Tips for Succeeding at Customer Retention
The current economic climateis causing customers to be more selective. As a result, many companies are losing customers at a rapid rate. However, most businesses can only guess at the reasons customer leave, mainly because they don’t gather that information or develop a formal strategy to retain customers until after they leave.
1. Find out what customers want and what causes them to stay or leave.
First, conduct a survey with existing customers. Ask customers what they want and need, as well as which specific aspects of your business, products, services they value most. In addition, conduct a separate survey with former customers to find out what specifically caused them to leave.
2. Proactively collect and promote customer feedback.
Don’t wait until there is a problem to contact or follow up with customers. Instead, set up communication channels to encourage sincere two-way communication with them, and then use those channels to actively solicit and collect their feedback.
Examples of customer communication channels include: a feedback link or feedback form on your company web site, an 800 number, focus groups, comment cards, in-person visits, e-mails, letters, kiosks, user forums, surveys, etc.
3. Use technology to manage and analyze customer feedback, and ensurethe right people hear it.
Companies can easily have as many as 35 or more tools in place to listen to the customer. These tools frequently duplicate efforts and constitute a tremendous amount of time and resources. By the time feedback is tabulated, analyzed and shared, the input is weeks or months old.
However, new Voice of the Customer (VOC) technology is available to collect customer feedback through multiple channels (email, Web, print, phone) into a central database for analysis and action. VOC solutions can greatly assist your organization in keeping track of all customer feedback and the details that come with it—such as dates, times, places, who gave you feedback, what their feedback was, etc. This goes beyond collecting data to provide a strategic approach to building relationships with customers.
Some systems automatically route feedback to the appropriate person at your company and provide the management tools needed to track and respond to the customer directly. This can help pinpoint the specific factors that are causing customers to stay or leave, and make predictions about future outcomes.
4. Analyze customer feedback to gain valuable insights.
Once you’ve gathered feedback from customers, analyze it to find out:
- The type of customer feedback and the percentage in each category (complaints, suggestions, comments, concerns)
- The channel most used by customers to provide feedback (Web, phone, in-person, etc.)
- The underlying drivers of customer loyalty and engagement (i.e. the main reasons that customers do business with you, how they are emotionally connected to your business)
- The current strength and depth of customer loyalty and engagement
- The trends in customer feedback levels over time
- New revenue and growth opportunities for your business
5. Immediately address customers’ complaints and concerns.
A TARP Worldwide financial services industry study showed that among customers who registered a complaint, 95% will buy again if their complaint was resolved quickly. Customers whose complaints are resolved satisfactorily tell an average of five people about their good treatment.
To make the most of your customer feedback, put together an action plan that focuses on addressing and resolving any areas that are causing customers concern. In conjunction, establish standards of excellence and share best practices with others in your organization.
6. Take action and Measure the Results.
Use customer feedback to make improvements, and then measure the impact of the changes that you made. Some of the areas that you may want to consider measuring include customer retention rate, revenue per customer, customer referrals, customers saved due to feedback, etc.
Let customers know whenever your company initiates change resulting from their suggestions or feedback, and what specific changes you made. This will encourage future feedback and assist you in continuing to improve your business. Conversely, if you are not able to use a customer's suggestion, let them know that you appreciate the request and explain why you're not able to use it.
7. Actively measure and monitor your customers’ loyalty and engagement.
Customers today are bombarded with attractive offers all the time. If they see a better deal based on price, quality or service, they feel pressure to switch brands. To combat this, regularly measure and monitor your customers’ loyalty, satisfaction and engagement to identify changes in your unique loyalty drivers. Then use that information to make adjustments.
8. Create and nurture a company culture that embraces and is committed to using customer feedback.
Create a company culture that embraces customer feedback by dedicating resources to acting on customer feedback. This involves training all your employees on what they can do to assist you in building a more loyal customer base.
Build an employee rewards program around the positive feedback received from customers. Then, hold regular meetings to recognize employees for positive customer comments made about them. Also, promote any great examples of how people in your organization used customer feedback to make tangible, positive and long-lasting changes to your business.
9. Keep asking, listening, analyzing and improving.
Customer needs, wants and concerns are constantly changing. So, keep asking and listening to customers’ feedback, and analyzing that feedback on an ongoing basis. By doing so, your business will be able to not only retain more customers, but continually tap into fresh, new customer preferences and attitudes that you can use to create new products, services, and programs tailored to their needs.