With growing competition in almost all business sectors, customer retention must be become a key focus for all small business owners. Growing your customer base is key to business growth, however, most business focus more on customer acquisition at the expense of customer retention.
Research shows that the benefits of customer retention are immense.
1. Selling to existing customers saves money
It cost 5-8 times more to market to new customer than to an existing customer [according to The Chartered Institute of Marketing’s (CIM) fact file]. Some studies show that it can cost up to 30 times more to acquire a new customer than to keep an existing customer
2. Existing customers typically purchase more than new customers
Studies also show that typically approximately 65% of company’s revenue comes from existing customers, with the old 20/80 rule holding (80% of revenue coming from 20% of all existing customers).
CIM also highlights that the primary reason why customers defect is quality of service (ahead of product quality). With this in mind, it is imperative that customer satisfaction becomes the focus of all business owners. Here are few tips to keeping your customers happy:
Develop a customer-centric culture.
Conduct regular customer interviews
Commit to frequent service improvement initiatives
Take every customer complaint seriously
Looking for help with building a customer-centric business?
Mrs Takyi-Micah (CEO of Nest of Ideas and former Head of Customer Service, Barclays) addresses this topic extensively in her training (Customer Service, The key to business success).