The importance of customer retention
As the year progresses, and so does the COVID-19 pandemic, we are all shifting our priorities and goals for 2020. While customer acquisition is still part of the picture, customer retention is becoming our primary focus.
Customer retention is always an important business strategy, but right now we are presented with a great opportunity to hone-in on our processes and make sure we have a solid plan in place.
The efforts we make now can translate into the future of our businesses and keep us going strong.
Why customer retention matters
It costs up to five times more to acquire a new customer than it does to retain an existing one. Amongst other benefits, retaining just 5% more of customers can impact your profitability by 25-95%! That’s huge.
Customers who already use your product or service have established a level of trust in what you have to offer and are therefore more likely to continue giving you their business.
Knowing the positive gains you could see with just a slight increase in customer retention, you should consider putting a significant portion of your marketing budget and efforts towards retention strategies.
Of course, you should still set aside time to go after new business, as customer acquisition will always play an important role, but make sure you’re still nurturing your pool of existing clients who already invest in you and protect that relationship in any way you can.
Improving your customer retention strategy
Customer retention efforts should begin as soon as a sale is closed and should last for as long as that customer gives you their business.
Remember, the goal here is to create a really strong relationship between your customer and yourself—and all strong relationships are built on trust and transparency.
So, how do you go about achieving that? It starts with a solid onboarding process.
In our eBook, How to Implement an Efficient Success Team, we cover how to improve your customer retention efforts through KPIs, client communication, and the onboarding process outlined here:
1. Begin the process while they’re still a prospect
This is all about meeting people along every step of their journey. It’s estimated that it takes about seven touchpoints to close a sale. What this means is that you have several opportunities to nurture that relationship and show why and how you’d be a valuable partner.
Share industry-related thought leadership resources that’ll help your prospect grow. Offer free demos or trials of your product. Approach them from a personal point of view. Initiate conversations that leave an impact rather than come across as too sales-y.
Establish a foundation for what will hopefully become a long-standing relationship.
2. Keep the lines of communication open once the sale is closed
When a client signs the quote, so to speak, make sure they are confident you are there for them. Whether you send a welcome email introducing the client to their assigned Account Manager, or you call them up for a quick chat, be 100% certain that the client knows how to reach you and the support team, where to find your knowledge base or other self-learning resources, what any next steps are, and any other pertinent information that will reinforce your commitment to them.
3. Map out the onboarding process
Let your clients know exactly what to expect throughout their onboarding, including how long the onboarding period will be (i.e., 90 days). Give them benchmarks to check in on themselves, such as when they should expect to master certain skills by and knowing in what instances they should reach out to you or the support team.
We like to give new partners a checklist to follow, which tends to keep them accountable and more likely to adopt the product (who doesn’t love checking items off of a to-do list?). If you have an app, in-app reminders are also a great way to get your clients to check themselves.
We highly recommend regular check-in calls with clients during the onboarding period. This one-on-one time allows you to provide more in-depth training, answer any lingering questions, screen-share for any troubleshooting needs, and reinforce the idea that you are a partner rather than just a vendor. Don’t underestimate the power and value of getting personal with your clients.
4. Evaluate each other
At the end of the onboarding period, it’s a good idea to take stock of how both sides are feeling. See if your client is where they should be in terms of product adoption. If not, how can you help them get there? Are more training sessions needed? Are you still sure they’re a right fit for you?
On the other side of the coin, have them evaluate you. Were they satisfied with the onboarding process? Do they feel there are learning gaps? What was missing? What would they want more of?
All of this information will allow you to continue sharpening and strengthening your process so that (hopefully) you continue improving churn.
5. Reward your champions
Who are the clients that have really embraced your product or service and used it to their full potential? How has it impacted their business? How can other clients learn from their experience?
You should think about asking these champions to speak about their experience in client-focused webinars or peer groups. You can also highlight their business on your website or a blog. They would be happy to get the boost in visibility from you and are probably more than willing to tell their peers about your service.
Increasing efforts using existing resources
Because of situations like the coronavirus, many of us are unwilling or unable to hire new talent or invest financially in new tactics. However, improving customer relationships can absolutely be done using existing resources.
You likely already have at least one employee who is mainly customer-facing. Whether this is somebody in your service desk or in your marketing department, it’s an employee who knows your customers well and understands their wants and needs.
Collaborating with this employee or team to build up your onboarding strategy is a great way to get insight into your particular customer base and optimize your efforts to get the results you’re really looking for.
The only required investment on your end is time, but the rewards can be significant to your bottom line.
The main thing to remember is that an onboarding process does not need to be overly complicated, it just needs to be consistent and purposeful.