Harvard Business School is one of the best colleges for harnessing the business acumen of aspiring professionals. When the renowned school issues an important piece of data, we better pay attention.
Well, a recent statistic released by Harvard Business School should motivate you to learn more about how to keep customers coming back to your business for years to come.
According to Harvard Business School, businesses that increase customer retention rates by just 5% increase profits anywhere between 25% and a whopping 95%. This is an especially relevant statistic for a business owner that is currently performing an evaluation of their customer retention strategy
Let’s take a peek at how you can do a better job of retaining customers, as well as understand the importance of diversifying the products and services your business offers.
How to Keep Customers
You probably have heard about employee onboarding, which is the process of seamlessly bringing in new talent by performing orientation and a series of training sessions.
Onboarding is an important tool to use for retaining loyal customers as well.
Instead of overwhelming new customers with a bunch of sales information, you want to spend the first couple of critical days and weeks ensuring you are providing superior service that includes easing your new base of customers into becoming lifelong patrons of your business.
Onboarding Road Map
We use maps to get from point A to point B, although Google has redefined the meaning of road maps. For onboarding new customers, you want to create a road map that does not overwhelm them. Establish a clearly defined plan for new customers that focuses on exceeding expectations, without going overboard by flooding email accounts and filling up the time allotted on cell phone voicemail systems.
Schedule between four and six initial phone calls spread out over several weeks to prevent your new customers from being overwhelmed with sales pitches and promotional campaign information.
Speaking of Communication
As the timeless adage goes, it is not what you say, but how you say it that matters in communicating with new customers. First, you have to stand for an idea or two that your new customers can adopt as their own. According to a study released by the Corporate Executive Board, 64% of new customers polled stated that shared values were the most important reason for supporting a particular brand.
Second, use social proof of your brand’s strength. Social proof can come in the form of Facebook likes and the number of customers that respond to your business-related tweets. Finally, target the inner ego of new customers by creating an identity for your company that represents the personality traits admired by the new customers you want to turn into loyal customers.
The Importance of Customer Feedback
Another timeless adage is “what you don’t know can hurt you.” The adage is appropriate for business owners and operators that refuse to solicit feedback from their customers. How do you know about where you stand with a customer unless you ask them about it? In an era of social media networking, it is easy to solicit feedback from customers. The key is to quickly engage customers that provide helpful feedback.
The Importance of Excellent Customer Support
In the restaurant business, savvy managers understand that how well they handle complaints often determines whether they increase the number of loyal customers. Providing timely and effective customer support is a no brainer for businesses that want to retain loyal customers. Digital customer support in the form of a 24/7 online presence is important, but so is the personal interaction between you and customers that ends up building your loyal customer base.
The Turtle Wins the Race
You know about the turtle and the hare, but what does that have to do with keeping customers?
The answer is new customers prefer quality customer service over customer service that is delivered quickly but lacks a successful resolution of an issue. A study presented by the Gallup Group confirms this principle. Customers polled in the study were “nine times more likely to engage with a brand” that delivered “courteous, willing, and helpful” customer service.
It is a Team Effort
Unveiling a customer retention program is not a mission performed by just the top members of management. You also need to have everyone else on board to make the program a rousing success. Think of the sports analogy often used by head coaches. You need everyone on the team pulling in the same direction.
Reward Customer Loyalty
It seems every business has some type of customer loyalty program. How do you make your customer loyalty program set the standard for your business niche? The answer is to learn why your customer participates in loyalty programs and what do they expect to get out of the programs.
How to Diversify Customer Services
Your customers have a wide variety of needs that you need to meet. If you offer only a limited number of services, you run the risk of forcing some of your customers to choose a competitor. Moreover, you can offer multiple levels of the same service at different price points to take care of a wide number of customers that have different financial constraints. Offering multiple service levels can be done by creating tier pricing, as well as labeling different service levels using the precious metal system (bronze, silver, gold, etc.)
How to Diversify Your Customer Base
To make a diversity offerings strategy work, you should also consider expanding your customer base. A few years back, the MIT Sloan Management Review presented the case of a retailer that concentrated on catalog sales. The study stated the retailer targeted its “loyal and most profitable customers, only to find that it was not bringing enough new customers into its portfolio to grow the business over time.”
Here’s how to diversify your customer base:
- Ask for referrals
- Upload testimonials to the business website
- Broaden and strengthen your online reach
- Target more high-value customers
- Establish new marketing programs
This brings us full circle on how to keep customers. Devote the time and resources necessary to increase the number of products and services your business has to offer.