The golden rule for success in business is to get your customers to believe that they are more important to you than anyone else. This guide offers some tips on how you can retain your customers by delighting them – and gain more sales from them.
Research shows that it costs between five and seven times more to gain new customers than to get an existing customer to buy from you again. This reinforces the importance of retaining your customers and keeping them happy. Calculating the lifetime value of customers also gives you an increased awareness of the importance of retaining customers. For example, a customer that spends $500 a year with you for 10 years is worth $5,000. Cut that down to five years, and you’ve just lost $2,500, plus you face the cost of finding a replacement customer. To retain that $2,500 in extra business is it worth spending a few dollars a year on keeping the customer happy?
Listen and exceed
The main strategy behind retaining your existing customers is to put in place a continuous customer focus. This involves getting feedback from customers and putting that feedback into action so that you can delight them through your improved goods and services. Put more simply, listen to customers and exceed their expectations.
For help with the first part of this strategy - getting customer feedback - see the related Solution Guides; ‘How to write a customer questionnaire’ and ‘The importance of market research’. These guides explain in more detail how to get feedback from customers.
The second part of your customer retention strategy - exceeding your customers’ expectations - is achieved by improving your business through the feedback you receive. Improved processes should lead to improved satisfaction levels. A related Solutions Guide, ‘How to deal with customer complaints’ offers help with this process and explains how converting an unhappy customer into a satisfied customer can turn that customer into a powerful advocate for your business.