It’s nice to find new customers who are interested in your product. It makes you feel like you’re doing something right. While gaining new customers is exciting, it doesn’t compare to how good it feels turning customers into loyal buyers.
Customer retention is one area of sales that doesn’t always get the attention it deserves. I would argue that some business owners don’t fully recognize the importance of customer retention and how it impacts the bottom line. See why focusing on customer retention is key to your company’s stability and success.
Owning your own business comes with great responsibility. One of your most important duties is to stay in business. Attaining new customers is important for obvious reasons, but only focusing on new accounts isn’t a strategy that’ll get you very far.
Solely focusing on bringing in new customers makes sales look good, but it’s a short-term strategy that’ll hurt your business growth. Customer retention is a long-term solution that builds trust, loyalty and satisfaction with those who have already tried your services. Existing customers are worth more than newly acquired ones, according to Gartner Group. Their study concluded that 80% of your company’s future revenue will come from just 20% of your existing customers.
Feedback & Reviews
What people are saying about you and your company matters. Customer feedback can be tough to swallow, but if you listen to what your customers are saying, and respond appropriately, you’ll gain their respect and repeat business.
The more familiar current customers become with your services and products over time, the more they’ll want to contribute to your success. Their feedback will be candid and valuable to how you run your business. Happy customers and loyal fans will start praising you to their friends, family and social networks. How you treat your current customers will be reflected in the reviews they leave for your business. If they’re positive, reviews will be very beneficial in helping you close more sales.
Referrals & Lead Generation
The fact is, 92% of people trust recommendations from peers more than all other forms of marketing (Nielsen). I’m sure you can see where I’m going with this. If your customers are satisfied, then they’re going to spread the word for you and market your business on your behalf at no cost to you.
Retaining customers is critical to growing your business. Referrals are one of the best ways to keep sales moving in the right direction. Referred customers are better customers. They’re not only more likely to stick with you over time, but statistics show they’ll be referring new customers to you. Your referrals will act as a lead generation tool to bring in more customers, so you can close more deals. It’s a positive chain reaction that no one can deny.
Build Better Relationships
The longer you work with your customers, the greater the potential of building strong, personal relationships with them. Anyone in sales knows that relationship-building is the foundation to success.
Customer retention becomes very difficult to manage when there’s no connection or trustworthiness between a business and their customers. Loyal, passionate and profitable customers don’t just appear overnight. They’re built from mutual respect and honesty that can only be developed through the process of building a relationship.
If retaining customers were easy, we’d all be doing it. The reality is that not everyone is and it’s having an adverse effect on business. Customer retention is one area you’ll want to master if you not only want to stay in business, but grow the business and take it to new heights.