Why you need to focus your attention on customer retention

A happy client is the best investment money can’t buy. But a neglected client is like throwing an un-cashed check in the garbage.

What am I talking about? Customer retention! It’s far more expensive to sell to a new customer than it is to sell to an existing one – up to five times more to be exact. But did you know around 44% of companies overlook the importance of customer lifetime value and instead harness all their efforts into gaining new clients?

Most business owners recognise the importance of good customer service. However, so many of us stop giving the royal treatment soon after the client signs the dotted line. Look, we get it – new clients are a challenge. And that’s why you’re a business owner, right? You love a challenge! But if you really want to reap the rewards from all your hard work, it’s time to focus on your existing client register.

Here are just a few reasons why customer satisfaction (and as a result, client retention) can make or break a business:

• Existing customers are 50% more likely to try new products.
• Existing customers are also likely to spend 31% more than new a customer.
• 91% of unhappy customers will never purchase services from you again.2
• Just a 5% increase in customer retention increases profits by 25-95%.1
• The likelihood of selling to an already existing customer is a whopping 60-70%, whereas the chances of selling to a new customer drops to 5-20%.1
• 70% of complaining customers will do business with you again if you resolve the complaint in their favour.3
• Every one of your customers has an influence of 250 people.2
• 96.7% of dissatisfied customers will never tell the business they are unhappy, however they will likely tell at least 15 other people. On the other hand, satisfied clients will likely only tell up to six people.4

We didn’t put these stats here to scare you (I swear). We just hope they give you a good kick up the **** for you to realise how valuable your existing clients are. Remember the old saying by Joseph Parry, “Make new friends, but keep the old; Those are silver, these are gold.” Well it’s the same with your clients.

How to improve customer retention

So now you understand the importance of your existing customers and their lifetime value, how do you make them fall in love with your business over and over again? We’ve come up with some simple but effective ways to keep your clients coming back for more.

• Treat your customers like royalty (remember, they are gold!)
  • Call regularly;
  • Offer valuable resources and ‘loyal-client-only’ deals;
  • Listen to their slightly boring stories about their kids first tooth;
  • Make them feel like they are the only client in the world;
• Earn their loyalty and trust by continuously proving you’re an expert in your field;
• Practice good communication skills by replying to emails and voicemails promptly;
• Use email marketing as a means of keeping in contact with ALL your existing clients;
• Value their opinions, point-of-view and feedback. Then action their feedback to improve your service;
• Treat them like a person, not a number. Learn about their lives, their challenges, their families etc.

Sure it’s exciting to spot new prey and make the pounce. Just don’t leave those you’ve already caught behind for competitors to take.

What does your business do to maintain customer relationships? Do you have any tips for customer retention? Share them with us below!