Wednesday Insight: customer and client retention
Whatever stage of development your business has reached, it is essential to ensure you are doing all you can to retain your existing customers and clients.
Retention is one of the simplest and most effective means of growing a business – research from Bain & Company has showed that retaining existing clients can be up to seven times more lucrative than acquiring an existing one. In this article, we look at ways in which small, medium and micro enterprises (SMMEs) can secure high retention rates.
Clients and customers become trusting of the brands they use when there is an open and honest relationship. Small business owners often feel they have more to prove to their clients, and overstretch themselves as a result – but be sure to resist this temptation. Without clearly communicating what a client can expect of you and when, clients grow mistrustful and are less likely to rely on your services in the future. By reaching out to and communicating openly with your customers and clients on a regular basis, you are more likely to be able to avoid this.
Offering high-quality customer and client service is not only essential for cultivating a strong brand reputation: it can also increase an SMME’s profit stream considerably. Research from McKinsey & Company has showed that, in the e-commerce sector, spending among repeat customers is on average twice as high as spending by new customers. This is true across sectors as well: small businesses in the UK are losing approximately £12 billion every year as a result of poor customer service.
To ensure you are prioritising satisfying your existing customers and clients, rigorous internal management, responsiveness and strong customer service are all essential. For advice on how to ensure you are doing this, read our recent blog post on improving client care.
Ongoing sales pitch
Many businesses make the mistake of growing complacent after closing the initial deal, and ignoring existing customers when pursuing new business leads. Avoid this by making sure your SMME is continuing to sell itself throughout the lifetime of a contract. Remind your customers and clients of the ways in which you add value, and showcase the achievements and milestones reached in the contract. This makes it more likely your clients will see the value in retaining your services.
If you have any questions or would like further information about the range of support on offer in the Building Legacies Programme, please contact Danny Hackett on firstname.lastname@example.org or call the office on 020 7537 6480.