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Enhancing Profitability the customer-centric way
CloudCherry | Featured | April 22, 2016
There are many proven techniques to increase your Company’s profitability. But amongst all that, the most effective technique is focusing on Customer Retention. In addition to expending resources to acquire new customers, it’s only prudent to ensure your existing customers stay loyal to your brand. A solid customer loyalty and retention strategy is, therefore, an ideal way to grow your profit numbers. That said, retaining customers is tough – definitely tougher than acquiring new customers. However, it’s a worthy feat to achieve for all business owners
In fact, studies by Bain & Company, along with Earl Sasser of the Harvard Business School, have shown that by increasing your customer retention rate by just 5%, you can increase overall profitability between 25 and 95%.
It can be overwhelming, at times, to come up with the ideal plan to increase retention, particularly in digitally advanced world we find ourselves in. When the average consumer is exposed to thousands of advertisements each day, how do you stand out from competition?
The degree of loyalty within your customer base depends on a number of factors; some of them are quality of customer service, customer experience, behaviour of employees, and so on. If all these factors work in-sync, in a positive way, people have a higher tendency to commit to a brand as they feel cared about and see an emotional connect there. Which is why your business should take advantage of any available opportunity to get to know customers on a personal level.
Train your staff to serve customers better – employees should be casual, enthusiastic, honest and not assertive or intrusive during interactions. Simple small talk while conducting a transaction can help gain valuable information at times on a client/customer to develop a personalized relationship. Social media and E-mail interactions should also be initiated and taken forward with a touch of personalization. Consider keeping a log on each customer, if possible. You could also notate each customer’s account with certain bits of information, such as whether or not they have children, information about their career, and other things that may come up in conversations. Showing interest in your customers’ lives is representative of the fact that you are looking beyond the transaction/sale to build a solid everlasting relationship.
Just about everyone has heard of the Golden Rule, treat others as you wish to be treated. Entrepreneurs should understand that being kind and professional can go a long way from a customer loyalty standpoint. Keeping this in mind, they need to rally their teams to the integrate the customer at the core of the organizational philosophy. Google has instituted the “Platinum Rule ”, which is applied in communication. In addition to treating others with respect and kindness during communication, it also advises business owners and management to interact with customers using their preferred method. If a customer communicates with you primarily through email, use the same channel to respond to them.
If you find that you have a loyal customer base, why not reward them selflessly? Many companies around the globe have implemented loyalty programs as a means to entice customers to return for repeat business. Some may offer ten points that equal a one dollar discount on a future purchase. You can perhaps offer free shipping with a certain amount of accrued points. A loyalty point-based system is a tried-and-tested method of getting customers to come back. That said, what matters most is how this system is designed – what are the costs and the incentives, the pros and the cons. Not all loyalty programs have been a success. Only those that have rewarded the customer fair and square and not tried to get greedy.
Now, why don’t you implement these 3 simple customer retention tips and discover the results yourself?