Cus­tomer Retention

Cus­tomer reten­tion is a cost-effective and prof­itable busi­ness strat­egy that is imper­a­tive in today's com­pet­i­tive eco­nomic environment.

What Is Cus­tomer Retention?

By def­i­n­i­tion cus­tomer reten­tion is the activ­ity a com­pany under­takes to pre­vent cus­tomers from defect­ing to alter­na­tive com­pa­nies. Suc­cess­ful cus­tomer reten­tion starts with the first con­tact and con­tin­ues through­out the entire life­time of the relationship.

What Are the Ben­e­fits of Cus­tomer Retention?

• Increased rev­enue
• Lower cus­tomer acqui­si­tion costs
• Increased refer­rals

Proven Ways to Increase Cus­tomer Loyalty

1. Be proac­tive! Research your com­peti­tors to com­pare pric­ing and mar­ket­ing strategy.
2. Talk to your employ­ees. Your front line rep­re­sen­ta­tives will have great insights into cus­tomer needs and wants.
3. Talk to your cus­tomers. No one knows bet­ter than your cus­tomers. Sur­vey new cus­tomers and repeat cus­tomers to con­firm your processes are effective.
4. Mon­i­tor social media sites. Google your busi­ness name and see what comes up.
5. Reward repeat customers

Suc­cess Story

Olym­pus Medical’s Field Ser­vice and Sup­port divi­sion has his­tor­i­cally focused on the tech­ni­cal acu­men of their sup­port engi­neers. Though already ranked in the 90^th per­centile of Gallup’s business-to-business poll, Olym­pus set a goal to increase their cus­tomer sat­is­fac­tion score and ulti­mately shift their focus from the tech­ni­cal aspects of the ser­vice call to the over­all cus­tomer experience.

“The Impact Learn­ing pro­gram con­firmed what our inter­nal mea­sure­ments have been telling us and rein­forced how essen­tial cus­tomer ser­vice is to our busi­ness. As an orga­ni­za­tion com­mit­ted to improv­ing people’s lives, we are ded­i­cated to pro­vid­ing out­stand­ing cus­tomer care. It is impor­tant that we con­sis­tently look to exceed cus­tomer expec­ta­tions and sat­is­fac­tion. In doing so, we hope that our cus­tomers will build a long term part­ner­ship with our organization.”

Rob Cer­mak, Exec­u­tive Direc­tor of Olym­pus Medical

To read the com­plete suc­cess case click here.

There are sev­eral proven meth­ods to increase cus­tomer reten­tion but the most impor­tant is cus­tomer ser­vice train­ing. Employ­ees who receive con­tin­u­ous cus­tomer ser­vice train­ing are bet­ter skilled, hap­pier employ­ees who under­stand the impor­tance of pro­vid­ing a pos­i­tive cus­tomer expe­ri­ence. Increas­ing your cus­tomer reten­tion will increase your rev­enue and lower your overhead.

Increased Cus­tomer Reten­tion Will Reduce Costs

Authors Emmet C. Mur­phy and Mark A. Mur­phy made many eye open­ing state­ments in their best­selling book, Lead­ing on the Edge of Chaos.

• Acquir­ing new cus­tomers can cost as much as five times more than sat­is­fy­ing and retain­ing cur­rent customers
• A 2% increase in cus­tomer reten­tion has the same effect as decreas­ing costs by 10%
• Depend­ing on the indus­try, reduc­ing your cus­tomer defec­tion rate by 5% can increase your prof­itabil­ity by 25 to 125%
• Cus­tomer prof­itabil­ity tends to increase over the life of a retained customer