Are customers slipping between your fingers?
Whatever your industry, as a rule of thumb it’s far more expensive to acquire a new customer than it is to keep an existing one. Putting some time and effort into a customer retention program would seem like a good investment, but it’s one area where many businesses drop the ball in even the most cut-throat industries.
My home electricity bill is looking a little steep these days, even allowing for my passion for technology, so I recently decided to shop around for a better deal. Competition is tough between electricity retailers so it helps to be able to make comparisons.
Thankfully you’ll find a few good Australian websites designed to help you assess your power needs and compare prices, whether you’re a residential or business customer.
The first step of the process was to ring my electricity provider to check whether I was still under contract. I was prepared to endure the hard sell, but the call centre operator didn’t seem to care that I wanted to know whether I was free to go. Even when I explained why I wanted to know, she simply asked if she could help me with anything else and then thanked me for my call.
Now that electricity company will need to go to the expense of finding a new customer to replace the one that got away.
How would this conversation have played out if I’d rung your business sounding like a customer ready to defect? What sort of customer retention processes swing into action when someone seems ready to take their business elsewhere? Do you have a customer retention team, or do you use technology to spot unhappy customers before they get to the point of jumping ship?
A reactive customer retention program might involve training up a customer retention team, staff who are ready to talk to dissatisfied customers and authorised to go the extra mile to keep them on-board. To complement this you should also consider a proactive customer retention program to spot dissatisfied customers before they’re ready to leave.
The rate at which you lose customers, also known as “churn”, is one area where technology can come to the rescue via a flexible customer relationship management platform. CRM systems aren’t just for keeping track of who your customers are, they’re also useful for analysing behaviour patterns and spotting people who are unhappy and contemplating change.
Banks, telcos and other large enterprises use predictive churn modelling to study customer behaviour patterns. While these high-end analytics might be beyond the reach of most companies, there are lessons here for even the smallest businesses once you’re using a CRM platform to manage customers.
Even a basic study of a departing customer’s purchase history and recent interactions can help identify key churn triggers. Before a customer leaves, does their regular spend drop below a certain threshold? Do their visits become further apart, or their support calls become more frequent?
Something as simple as sending a discount coupon to these customers could be enough to retain their business – a small effort on your part which might make a big difference.
Some businesses go a step further by introducing automated anticipatory services, such as an airline texting you when your flight is delayed, or a retailer notifying you if your shipment is delayed.
Alerting customers of road closures and other events which might cause them to miss their appointment could be another valuable anticipatory service which increases customer satisfaction.
Every business is different, but one thing they all have in common is the need to retain customers.
This is where technology can work in your favour, helping you identify unhappy customers before they slip away.