There are several reasons your existing customers are your business’ most valuable asset.
- Increased profits from sales
- Increased profits from reduced operating costs
- Increased profits from referrals
Not only is it 3-5 times cheaper to keep a customer than to engage a new one, but studies show that repeat customers pay more for purchases and purchase more often. Satisfied customers also help your business to grow through referrals to friends and family.
To look at it another way, if your business is gaining 10% new customers annually, but losing 10% of existing customers annually, your company is not growing. Imagine if your company reduced your customer defection rate by 5%; your business would be growing at a rate of 5% every year. Not only that but your sales and marketing expenditure would be reduced.
How do you take care of your most valuable asset, your customers? Here are 5 proven ways using tech tools to retain and satisfy customers, which will build strong, long-lasting customer relationships and grow your profits.
Gather Customer Feedback
Customers who have purchased from you can offer insight into overall customer wants and needs. Often they can inform you of something about your product or business that you didn’t even realise.
This activity can also reveal whether you are targeting your product to the right customers in the first place.
How do you feel about friends or family that you don’t see or hear from very often? It’s likely you don’t have a close connection with them and trust them a less than those you’re in regular communication with, right? You can say the same for businesses. A relationship cannot be established without regular communication.
Regular communication can take the form of a monthly e-news email, marketing of new products, social media posts, a blog, an annual client appreciation event, a personal meeting or even a phone call. Ensure to go beyond simply marketing your products; make your customers know how important they are to you.
Reward your Most Valuable Customers
The Paretto Principle states that roughly 20% of a company’s customers generate approximately 80% of revenue. Perry Marshall takes this principal a step further and claims that the top 4% of a firm’s customers generate 64% of the revenue. Using your CRM produce a sales report and find out who your top customers are.
These are the customers you want to hang on to, so be sure to give them the treatment they deserve. This might mean customising the service given to them; giving them a discount on their repeat business; taking them to a lunch or entertainment; sending them a gift at Christmas; or all of the above.
Create a Referral Program
Why not encourage your customers to spread positive word-of-mouth by rewarding them for referring friends and family. For example you may like to offer both your existing customer and their friend 10% off to encourage new business but also give back to your customers who are recommending your firm to others. The customer’s referral can be tracked using a unique discount code, so you know who to thank, and can be distributed through an email from your CRM for easy forwarding.
Target the right customers, and don’t forget to cross-sell
Who is your target market? Do your existing customers match up to this segment? Take the customer data in your CRM and create a handful of customer profiles. You can then use these profiles to target new business, but also market to your existing clients.
While nobody wants to be badgered with sales and marketing phone calls and emails, when targeted correctly clients can be grateful to learn of a product that actually meets their needs. The goal is to build long-term, trusting relationships with your customers. This goal should always be applied, even when cross-selling to existing clients.