Saturday, January 16, 2010

Retaining your existing customers

Your sales come from two groups of customers: new customers and existing customers. It can cost you five times as much to attract a new customer as it does to maintain an existing customer relationship. And it might cost sixteen times as much to bring the new customer to the same level of profitability as the lost customer. So for you customer retention is more important than customer attraction.

How do you make this happen? The first step is to ensure your entire organization is customer-focused, not just your sales staff and customer service people. Everyone needs to be striving for high customer satisfaction – engineers, shipping and receiving, kitchen help, mechanics, bus boys, maintenance staff, delivery people, everyone. Everybody is involved with taking care of the customer in some way; engineers need to be designing with the customer in mind, employees responsible for shipping need to ensure products arrive in perfect condition, maintenance staff create a clean, attractive environment for customers. You would be hard pressed to find a job that is not linked to the customer somehow.

And remember, if you’re not taking care of the customer someone else will.
Here are a few suggestions on how to retain your existing customers:

1.Resolve customer complaints immediately. The customer is always right. If the food is too salty, the service took too long, the music’s too loud or not loud enough, a product is out of stock, bathroom isn’t clean enough, etc., make sure the problem is resolved to the customer’s satisfaction before they leave. An unhappy customer is not likely to be a repeat customer, and more importantly likely to complain to anyone who will listen.
2.Solicit customer feedback. Who better to tell you how to improve your customer service than your customers? And don’t be cheap – offer a good incentive for your customers’ information. Make it as simple as possible for your customers by using pre-printed feedback cards, online feedback forms, a 1-800 number, etc. Thank them for their feedback and follow up with them if possible to let them know you’ve implemented their suggestion.
3.Offer a 100% money-back guarantee. This advertises to your customer you are serious about customer satisfaction. If they return something in a less than desirable condition to resell or they don’t have a receipt offer them store credit on your loyalty card. This ensures you don’t lose the sale and you keep your customers happy.
4.Be a philanthropist. Support your local National Public Radio station during their next pledge drive, sponsor an animal or exhibit at your local zoo, make donations to local PTA’s for school equipment and supplies, or any other charity of your choice. Or better yet, let your customers pick the charity. You get advertising for your company, and a worthy charity receives a donation. A definite win-win for everyone.
Make sure you have a good business website. I’m going to write a separate article on this topic because of how important I feel a good business website is for any company. And in this age of $4/month webhosting, WordPress, Joomla, Xoop, Twitter, RSS, and CPanel, there is really no excuse for not having an excellent web presence for your company. All for a fraction of the cost of a Yellow Pages.


Nabeel said...

yes, i do agree with some of your points. the thing which is bothering me after reading your post is that wouldn't the cost of the firm rise very steeply if take so much care of your customers? what i mean to say is that the amount of money you spend on your customer care can be used in RnD of a new product or making your existing product better, so that no matter how bad is your customer care or the after sale services are the customer just have to stick with your product......