Three steps to customer retention that lasts | Fin24
 
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Three steps to customer retention that lasts

Jul 27 2015 13:19
By Pieter Scholtz

The cost of gaining a new customer is up to six times more than the cost of retaining an existing customer. For businesses to remain sustainable, they need to get repeat business from customers.

So how can business owners keep their clients for longer? Here are three steps that I find most effective.

Be Welcoming. People are more inclined to engage with a company that makes them feel important and appreciated. Customers can tell whether service providers are happy to see them through non-verbal signals, such as tone of voice, expressions, posture, and dress. All these things send subtle but powerful messages to them about how much they’re valued, how important their business is, and the quality of service they are likely to receive.

Reward Loyalty. Retaining customers can have an important impact on increasing revenues. In part because less money is spent on acquiring new customers, and in part because of their continued business. It is therefore important to reward your customers’ loyalty by engaging them with useful and interesting information from your business. The cost of letting someone know their patronage is appreciated and of rewarding them for repeat business is worth the investment.

Put Their Service Concerns at Ease. Each time a client decides to use a new business, they are taking a risk with their money and time and have little guarantee that their experience with that business will be a good one. This creates a degree of stress for a customer, but when their satisfaction level is high, it will reduce their need or desire to go to a newer business where the quality of service or experience is unknown. This will make engaging with a known business less risky and help businesses retain their current customers. Keep an open ear and learn to look for any signs that customers aren't happy with the product or service. Tools such as customer satisfaction surveys can play an important role here.

In the long run, a few simple steps, intended to keep businesses focused on the needs and wants of their existing clients, will be far more cost-effective then spending lots of time, energy, and money on looking for new clients.

* Pieter Scholtz is the co-master franchisor for ActionCOACH in Southern Africa.


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