Thoughtful Thursdays – Customer retention
Based on conversations with my customers, the sales environment is more competitive than ever and there are no signs that it is going to let up.
Keeping customers has always been important, but with increased competition the chances of losing a customer is much greater. Today’s sales thought is about customer retention.
If you question the value of customer retention, Bain and Company research indicates that in financial services, a 5% increase in customer retention produces more than a 25% increase in profit. In addition they find that it costs six to seven times more to acquire a new customer than retain an existing one.
If you are not actively working on customer retention, you may be setting yourself up for a disappointing year.
In the short term, resistance to change is probably working in your favour. You certainly do not want to be resting on your laurels. There is reason than lower prices to open the door for your competitor.
Here are a few ways to maximize the probability of retaining your customers:
- Become an expert in your customers’ industries
- Increase your call rate
- Seek ways to improve your processes and reduce costs
- Use every resource at your disposal to create quantifiable value for your customers
- Make the experience of buying from you second to no one
- Recognize the lifetime value of your customers
There will be times when your customers will evaluate your competition. What you want is to know when it is happening and to have the last look. A solid business relationship will generally grant you that position.
Take the to allocate resources for customer retention. It will be worth it in the long run.
Have a question about sales? Contact Sakanashi and Associates Inc. and I will respond.
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