Keeping customers makes good business sense but it's not always easy. Andrew Miller of the Royal Mail shares his ideas on how you can keep your customers coming back to your business
You've spent lots of time casting your lines, making your catch and reeling them in. But now you've got those customers, how do you keep them?
The downfall for many companies is that they don't know how to keep customers. It seems like this has fast become the pot of gold at the end of the rainbow and few firms manage to do it well. But why bother? What are the real advantages of customer retention?
Studies across a number of industries have revealed that the cost of keeping an existing customer is around ten per cent of the cost of acquiring a new one. So, economically it makes pretty good sense. Putting together a good retention strategy will also lead to increased customer profitability, as the longer the relationship, the lower the account maintenance cost.
There are other associated benefits to fostering a lasting relationship with customers, including the fact that long-term customers are more likely to introduce your business to others via a verbal referral, they're more likely to purchase others' products from you and if they're completely happy with the service they're getting then why would they even think about switching to a competitor?
If the business is maintaining good customer relations and keeping people loyal and satisfied, this also creates a happy workforce, with increased job satisfaction. Look at it this way: if the customer has been loyal to the company for some time, he or she will require less help and have fewer problems to deal with.
Clearly there are a great many benefits to keeping hold of current customers. But modern customers are smart - they're not happy to deal with you simply because they know you or your office is nearby or even because it's the easiest option. These days, people know how to get the best deal and will be happy to pop off to a competitor quicker than you can say "nice knowing you" if you don't give them what they need. So, short of locking the doors and refusing to let people go until they pledge to stay loyal to you for the rest of their days, how do you keep people coming back for more?
The bad news is that there doesn't seem to be one particular foolproof method. If there was, everyone would be doing it. Firms that can boast great success in their customer retention endeavours often have one thing in common though - great customer service. It's no good promising a customer the world at your initial meeting if three months down the line they discover you don't have the manpower, skills or knowledge to go about fulfiling your pledges. You have to make promises you can keep and be able to provide what the customer demands. And you must do it better than any of your competitors.
As all great gurus will tell you, the first thing you need to do is look within. In this case, that means within your business. Employing staff who are enthusiastic and who actually know what they're talking about will do wonders for the reputation of the firm. How many times have you walked into a shop and asked for some advice, only to be met with a blank stare from the shop assistant? It's frustrating if the customer contact person has no clue about what they're actually selling - so staff training is key.
In fact, staff are frequently listed as a company's biggest asset and, as such, they deserve a good chance to develop in their roles. Business representatives need to be taught to exercise good judgment and take the initiative when it comes to problem solving.
Communication is a vital part of keeping customers satisfied. It's important to listen to your customers. Make sure you communicate well, too, with a customer magazine or newsletter to keep customers well-informed. An employee newsletter is also an effective way of keeping staff informed of new products, changes and good practice.
Tried and tested methods of customer retention also involve rewarding people for their loyalty and giving customers something tangible - a real reason to come back to your firm. Incentives to return could include add-ons, vouchers, loyalty discounts or cards, special pricing and bonuses and gifts for ordering through a website.
Above all, keeping customers happy should mean that actions speak louder than words. A proven rather than promised commitment will put you way ahead of the competition.