You work hard to bring in new clients and create processes, systems, and products you believe will make your customer happy.
Research done by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by 5% increase profit by more than 25%.
Or, another way to say it is…happy, loyal customers are vital to your bottom line and your company’s success.
Businesses should expect a certain fall off of clients. Good management knows that understanding why customers move on or away will help their business grow.
Market research, when properly conducted to understand the needs and expectations of your ideal client, becomes invaluable in making decisions for operations, human resources, budgeting, and marketing.
Key Steps to Improve Customer Retention AKA Keeping Leo Happy
- Know your customer! Know them intimately. Understand your target market. Know their gender, race, age, occupation, financial status. Know why they want your product, how it is used, what they will pay and what other factors influence their buying decision. An in-depth market research study will provide the information to help you design your business to attract and keep your customers.You should be able to ‘give your client a name and identity. Let’s call your client Leo. Leo is the representation of your most common customer. At any development or marketing meeting your staff should be addressing Leo’s concerns and worries. Or how your product or service will solve Leo’s problems. If there is anything you think Leo might not like, try to look at it a different way. Leo’s happiness is all that matters to you. Never believe that you can’t make him happy. Know what makes him (and all the Leo’s you sell to) happy. Create and position your product for their purpose.
- Meet your customer where they are. There are multiple channels for Leo to engage with your firm. Web, phone, email, and in person are the various points where your customers engage with your business. Are you delivering what Leo needs and where Leo wants to connect with you? Mystery shops, customer satisfaction surveys and social media monitoring are all ways to keep your finger on the pulse of what will provide a good customer experience for Leo.
- Take Action. The data you learn from your research is only as useful as the actions taken once it is understood. If you have gone to the trouble to create a mystery shopping or customer satisfaction survey – read the data and listen to what the Leos are telling you they need. Tweak your service, adjust your hours, revise your web payment process. Whatever Leo needs, do it, so they know you care.
If you ask the questions, then be prepared to act on the responses.
The important take away is for you to not assume you know you’ve got the perfect product or service for Leo. Rather, discover who Leo is and why he is the perfect customer for you. Once you’ve learned exactly who he is and what he wants, then you will be able to meet him there and keep his loyalty.
Have you conducted research to find out who your “Leo” is? Share with us in the comment section and tell us what you learned!