In sales the main priority, as you would expect, is to always focus on selling more, which in turn means more and new clients. In view of this salespeople become so focused on gaining new business they tend to forget about those they already have. In this edition we address the question ‘Is new better’? We believe that the answer can be a definite unquantifiable ‘Rarely’.
So, let’s address some absolute accepted beliefs when working in a B2B environment:
- It’s much cheaper to keep existing customers than acquire new. A KPMG survey states that 80% of marketing budgets are allocated to customer acquisition, yet 82% accept that customer retention offers greater value.
- The accepted success rate of selling to an existing customer is measured at between 60 and 70%.
- The success rate when selling to a new customer is measured between 5 and 20%.
The most common error for a business is that if they believe in the quality and value of the service or product they offer, then customer retention occurs naturally. Customers need to feel valued not taken for granted. If not, they will leave taking their business elsewhere. If you don’t take care of your customer a competitor will. Easier said than done we agree so in this newsletter we look at some actions recommended to really generate customer loyalty.
Retaining Your Customer Base
In order to really identify customer retention and its true impact on a business success, it is first important to identify retention as a key strategy. Few business KPIs focus on customer satisfaction levels and the reasons customers are leaving.
In CallMiners 2020 report on customer churn, 3 key areas were identified as to why customers were lost.
- Unfair treatment. At the top of the list are those who feel they are treated poorly and without respect. Many agree they would stay if they enjoyed a better customer service. They noted ineffective customer automation, especially in access to customer support leaving customers feeling angry and frustrated. Another major cause of dissatisfaction is when new customers are offered incentives to join not offered to them. They feel loyalty is not rewarded.
- Customer experience. Whilst price can be a key factor when considering leaving, most state the value of good service is worth paying more for. If a competitor offers better service for the same or lower price, then the decision becomes simple.
- Human service. When someone has a problem, they consider unique, they need access to a real person, not directed to a website or a bot chat that can’t address their circumstances. Where a customer felt they were not being listened to and ignored, then finding an alternative becomes central to their thinking.
CallMiners report reveals a 5% increase in customer retention can add up to 75% increased profitability over a 3-year period.
Bearing all this in mind the one word that comes to mind is relationship and how a CRM platform ensures you know your customers, who they are, how you market to them, how they responded and the status of your current relationship with them.
What Tools can CRM Offer?
It is invaluable to actively listen to and understand what customers are saying about their experience. There is a huge gap between companies that believe they offer a superior level of service (80%) and their customers agreement (8%). An even worse statistic shows that 60% of customer service requests are not responded to. An Oracle report claimed that 89% of customers had at some time changed to a competing brand after a poor experience or they don’t feel a connection to your company. To truly understand what a customer really feels about your company then ask them. Break down the customer base into those who repeat buy against those who are inactive. Reach out and engage with the base. This will itself earn loyalty and trust, but only if the feedback is taken onboard and action is taken to improve.
2. Looking for Problems
One key activity should be that of spotting potential churn in advance. By identifying warning signs, loss prevention exercises can be initiated. Consider key indications of pending loss. Consider purchase patterns, usage, customer service enquiries and resolution, reaction to marketing contacts. Having spotted a potential issue, then be proactive on considered actions to address those identified.
3. Targeted Special Offers
The better you understand the customer the more a tailored approach is possible. A personalised offer can be based on previous behaviour and engagement. Consider a new product at a special price or how value can be added to an existing product with an upgrade.
4. Automate contacts
When a client has been inactive for a given period of time or has expressed an interest but has not followed up then an automated activation email can be used to reinvigorate interest and stimulate activity. Various mails can be used for varying automated responses. CRM can personalise these mails to maintain the human touch.
5. VIP Clients
Consider your most valuable clientele and reward them accordingly. Allocate resources accordingly and make them feel special. Invariably 80% of income is generated by 20% of the customer base.
6. Personalising contacts
Use software to ensure your customer as a person and not just as an account. Having ensured of their consent, personalise all communication. The more information you gather the easier it is to tailor responses. Be most aware of titles and how they prefer to be addressed as well as the tone preferred.
7. Keep your Promises
Keeping a promise is the ultimate sign of professionalism. Scheduling follow up mails or calls or assigning tasks in the CRM system ensures that promises are kept, and deadlines are followed.
Keeping relationships alive and active is increasingly vital in the modern business world, yet surprisingly easier if the correct focus is maintained and the best use of modern software and CRM tools are utilised.
With the help of these tools allowing the gathering of information, responses and key activities, will not only retain customers but keep them happy loyal and profitable.