A bird in the hand
It’s generally understood that whomever first penned the proverb “A bird in the hand is worth two in the bush” was talking about falconry; but we reckon they could just as easily have been talking about customer retention.
Our version of the saying would go something like this; “A customer in the hand can grow your business for a fraction of the cost of searching for new ones.” Less catchy, but entirely accurate.
The good news is that by looking after your existing customers, you can be. Research by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by just 5%, can help a company increase its profits by anything from 25% to 95%. With this in mind, let’s consider the top three ‘whys’ and ‘hows’ of customer retention.
WHY your businesses should focus its energies on existing customers
1. Your existing customers are big time savers
They know the drill. They understand your company, your systems and your ways of working. There’s no need for on-boarding initiatives or widespread introductions. They’re set up to go and likely already deliver 65% of your company’s business. One survey revealed loyal customers are five times as likely to repurchase from you, five times as likely to forgive a mistake, four times as likely to refer you to other customers, and seven times as likely to try a new offering from you. Any additional time you choose to invest in these clients will pay for itself.
2. You can leverage their trust to sell more
If you’ve already got some runs on the board with a customer you will have built up a sense of trust. You have an established working relationship, having proven you’ll do what you say you will and that your product or service is fit for purpose. This gives you a great platform from which to scale your business relationship. Statistics show the success rate of selling to a customer you already have is 60-70%, versus 5-20% for a customer you haven’t already engaged with.
3. They can grow your customer base better than you can
Your existing customers have stuck around for a reason and could be your best form of advertising. Word of mouth marketing continues to be the most powerful form of promotion (just look at all the social media influencers making a living online) and happy customers can be great brand advocates. Statistics shared by Referral Candy show over 80% of satisfied customers will refer products and services.
HOW to ensure your existing customers are happy customers
1. Invest in customer relationships
2. Maintain quality
Your repeat customers deserve the best, they are the reason your company remains in business, so never rest on your laurels, you’re only as good as your last transaction. An American Express study found 33% of customers will consider switching companies after just one instance of poor customer service. Keep your service and quality top notch and give them no reason to leave.
3. Reward loyalty
Ask the experts
There’s never been a better time to reward loyal customers. Get in touch today for a no-obligation appointment with one of our specialists and discover the true value of a modern and competitive customer loyalty programme. Don’t delay on this important growth opportunity.