“What do you mean they’re no longer a client? Are you kidding me? When did that happen? Why did they leave? I can’t believe it!” Have you heard (or said) these words in the past few months or so?
Well, as we all know, clients come and clients go but the sad part about it is that more times than not it’s because we’ve lost track of them or taken them for granted.
Which brings me to the question that begs to be asked: “Why do customers leave?” Curiously, most business owners and managers have the exact wrong idea about why customers leave. Most people believe that customers leave because:
(Drum roll please)…Wrong!
According to an in-depth study by the research firm CRMGuru, the reasons customers give for taking their “business down the road” are:
As you can see, when it comes to keeping your existing customers, customer service is three times more important than price–and five times more important than functionality. Which obviously means that if you want to keep the customers you’ve got, you should think about reversing priorities and pay more attention to customer service and quality – and, consequently, less attention to functionality and price. I fully realize that this runs contrary to 90% of what most people think is important, probably because price and functionality can play a large role in new customer acquisition.
Yet, many marketing plans are so focused on customer acquisition that they largely ignore customer retention. Even a tiny change in customer retention can have a large effect on long-term profitability and growth. This shouldn’t be underestimated. The easiest way to grow your customers is not to lose them. In fact, I recently read that 96 percent of dissatisfied customers don’t complain. They just take their business to one of your competitors, and the unfortunate thing is that you’ll never know why. And what’s worse, while they may not tell you what’s wrong, they will certainly tell plenty of others!
Want to get an edge over your competitors? With a little attention, your business can be one of those which can negate customer churn and improve profitability. Here’s a list of the five strategies (only limited by space) you can use to improve customer retention.
Keep them on your radar screen
So many companies do an excellent job of making the initial sale, then start chasing other prospects and in the process forget about their current customer…ignore may be the case as well…or they just get complacent. Gaining a new customer only begins when someone makes that initial purchase decision because there’s this thing called “buyer’s remorse.” To make sure that future referrals and repeat business materialize from this customer, it’s important to make sure that your customers’ fears are put to rest, and that you demonstrate by your actions that you really care and that they’ve made the right decision to deal with you. This can be accomplished by putting a plan in place to communicate with them, and sell to them again and again, constantly proving that your company was the right choice.
Build engaging relationships
With CRM programs all the rage, coupled with Big Data and predictive analytics providing marketers with in depth customer insights, the key to engagement is through personalization. In fact, as consumers ourselves, we expect and demand that companies personalize messaging and offers so they’re relevant to our wants and needs. You can do this by providing clients with offers that are personalized to them. Send them offers and information/content that they’ll like at the right time based on when they might need the product. Do some A/B testing in order to see what catches the attention of your customers. And, even recommend products to them. Offers, timing and product recommendations all show that you know and care about your clients.
Share useful content/information
Customers buy from people. They buy based on trust. Building trust with new customers is the key to getting them to buy in the first place. And maintaining and strengthening that trust is the key to keeping your customer over the long term, improving customer retention. In today’s marketplace, it’s not enough to have a wonderful product or service, you also have to help educate your customers on how they can use your product or service better. Content must abide by three criteria: it must be expected, valuable and relevant.
Give Back
Going back to your own personal experience for a minute, what is your impression of a company that, out-of-blue, gives you something you could use….for no cost. Not as an incentive or ulterior motive to purchase or do something else, but rather “just because.” It probably left you feeling good about the company, maybe even made you happy. Using the element of surprise to your advantage is a good thing because people naturally remember when something surprised them in a good way. You see, winning customers over starts with winning their thanks on individual terms. And while technology allows you to offer up this surprise to whatever scale you want, the fact is people remember acts of kindness when it feels personal.
Provide Exemplary Customer Service
When it comes to retaining customers, nothing’s more important than hands-on customer service. So let’s address a few different ways that customer service plays itself out. Critical to this is making sure that interactions that you have with the customer are quality interactions. Think about it: when you’re the customer, you expect the company that you’re dealing with to be courteous, willing and helpful, right? Also, make sure you’re dealing in the communications mode that your customer prefers. Although the majority of people prefer email, some like receiving calls or connections through social media channels. On that note, being proactive, or anticipating what the customer might need or addressing problems before they happen is always better than the alternative. This could be as simple as calling and asking if everything is OK before the client calls you to say something is not. Or letting them know that the product they recently bought is being redesigned and will look different or is going to be sold in bulk versus single-product purchases. And lastly, there’s nothing like hearing from the customers themselves. Some sort of a feedback system, such as a survey or speaking directly with your loyal customers, shows them that you really care about their recent experience with your company and will help identify any issues to address.
Regardless of what you’re selling, your long-term profitability is largely dependent upon your ability to keep current customers, compared to acquiring new ones. While you must always try things to attract new customers to your business, don’t take for granted those who are already in your camp and are supporting your business. Don’t forget, every now and then, to “dance with dem dat brung ya.”
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Rolf Gutknecht is vice president, director of account services for LA ads. To discuss your thoughts with Rolf on this blog or any marketing matters, email via this link, or visit www.LAadsMarketing.com. You can also connect with Rolf on LinkedIn.
Come on now, doesn’t it feel good when you receive an email or letter from a client saying how much they enjoy buying your products or working with your company? Or when your boss tells you a customer just shared a positive experience of your company’s service, thanks to you? It comes across as some version of Sally Field’s famous Oscar speech… “You like me. You really like me!”
Which brings me to the most powerful persuader in the marketplace, apart from a customer’s own experience, and that’s the opinion of someone they know. In fact, in today’s world, the majority of prospective customers, both B2B and B2C, spend time researching online or through social media before they buy. They depend more than ever on word-of-mouth references from people who have used those brands or products – even when those references are from people they don’t even know. (Think Angie’s List, Buzzillions, or Yelp.) According to a the marketing group, ODM, about 90% of consumers trust the word of people they know and 70% of consumers trust the word of people they don’t know! That’s why so much effort goes into viral marketing or “word of mouth.” That’s why social media has suddenly emerged from nowhere in the past couple of years to what it is today.
And that’s also why genuine testimonials are so effective. A testimonial is third-party endorsement at its best. There is much more credibility in the words of other unbiased people than in your own words of self-promotion. Heck, you’ve probably asked for and have probably written a recommendation (testimonial) for someone on LinkedIn, right?
So how are you using testimonials, or are you using testimonials at all, to keep current customers as well as acquire new ones? While I wrote an associated blog post about this a while ago having to do with how to acquire and utilize testimonials, I’m finding that a large number of organizations have decided that presenting testimonials from clients isn’t something they’re interested in or want their current or prospective customers to see. On that last point, help me understand why you wouldn’t want to strengthen the bond between you and current customers by reminding them why they chose you and not “the other guy,”as well as having prospective customers see you as viable recommended option for their needs. Testimonials help overcome buyer skepticism. Which leads to trust. Which leads to sales. Just look at what Mark Zuckerberg says: “A trusted referral is the holy grail of marketing.”
With that in mind, there are times when testimonials are incredibly powerful, and times when they might actually hurt you. For example, testimonials are powerful when:
They’re specific
Specific testimonials say things like: “When I needed to find a printer at 11 pm, your concierge service found one not too far away from the hotel. It saved my presentation the next morning.” Or, “Bob in your tech support team answered my questions in plain English and pinpointed my problem in just a couple of minutes.” Specific testimonials work for two reasons: First, they sound more credible. Second, they speak to a specific benefit or address a situation or question that may help persuade prospective customers.
They overcome objections.
Some companies shy away from these type of testimonials, yet they are arguably the most powerful tool you have. Testimonials from former skeptics stand out because they come across as credible. And by addressing and voicing what many perspective customers may be feeling, these testimonials are powerful persuaders. These type of testimonials sound like: “For years, I’ve heard of products that seemed to be similar to yours that just didn’t live up to their billing. Somewhat reluctantly, I used your free trial and saw how quickly and easily I was able to forecast future sales by industry type.” Or, “I thought it would be a confusing and tough to learn your new online ordering system, but it was quite the opposite. It’s a smart system that knew my tendencies and as a result, the ordering was done faster now than it was before.” Use testimonials that bring up objections, where customers admit being skeptical. These are the most powerful testimonials out there.
They substantiate your claims.
If you say your super-duper vacuum cleaner can pick up things as large as marbles, and you get people saying that it does, than these type of testimonials are as good as gold. Like you and I, people want to hear that your marketing claims aren’t based in hype. Nothing kills a so-so product quicker than good marketing….and the ability for people to tell anyone on social media.
A good testimonial is comparative. Did your customers try another product that didn’t work before they found yours? You want your visitors to know what your product can do that other products can’t. Testimonials that set your product apart from your competition (even mentioning the name of the competitor) provides that comparison factor that people remember.
But as powerful as testimonials can be, there’s also the time when they’ll not work well…so beware.
They’ll not work well when:
They’re fake.
Once a lie is discovered (and one way or another, it will be…call it business karma), you’re discredited and anything you say from then on just falls on deaf ears.
They’re obviously edited.
People usually provide feedback in a certain way, sometimes wordy or even slightly inarticulate. The more edited, the more businessy, and more “perfect” the testimonial, the more likely the audience may distrust the speaker. Therefore when you find a customer that uses a fresh and genuine language, take full advantage. Also, please don’t exclude a comment or add information you want to hear. As readers, all of us can sense when words have selectively been added or deleted. Anything that sounds vague or cliché can smack of insincerity. Out with the bragging and in with the sincere personal thoughts.
They’re vague.
Vague testimonials that tell the reader almost nothing and lack detail are pretty much not worth posting. You know the one I’m speaking of: “I was really satisfied with your customer service,” or “Your food taste great,” or “Your golf course is the best I’ve played.” Like you, when I read these type of kudos, I’ve learned nothing about why the speaker chose this particular company versus someone else. It’s a good waste of ink.
They’re anonymous (e.g., “Satisfied Member”; P.M. – Scranton, PA).
I don’t know about you, but I just can’t identify closely with these testimonials. It’s not just a matter of trust – though certainly that is a factor – it’s a matter of emotional connection. And while we’re at it, don’t use a customer testimonial without permission.
As I noted earlier, most people would rather act on a referral than make a purchase based on a sales pitch alone because we want to know that the product actually works before we put down money to buy. Just remember, the only thing better than saying the right thing at the right time is when your customers do it for you—and better.
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Rolf Gutknecht is vice president, director of account services for LA ads. To discuss your thoughts with Rolf on this blog or any marketing matters, email via this link, or visit www.LAadsMarketing.com. You can also connect with Rolf on LinkedIn.