Play For Keeps: Seven Retention Mistakes You Don’t Know You’re Making
Getting and keeping customers are two very different things. Acquiring a new one vs retaining a current one. Which one is cheaper? If you’ve read anything about business and marketing, you’re familiar with the often quoted fact that it's much, much cheaper to keep than it is to find.
So, it’s all about retention. Yes, you want to devote some time, effort, and money towards growing your customer base, but you should spend at least an equal amount on cultivating and maintaining relationships with your current customers. And that’s where far too many businesses stumble, trip, and tumble to the ground. They think they’re doing it already, but most are making at least a few deadly mistakes.
1. Too Many Discounts
This one seems counterintuitive at first glance. Companies often rely on frequent and generous discounts to thank their customers for their loyalty. But over time, it works to devalue your product or service, and many customers will start to purchase only when offered a discount. In extreme cases, they may even begin to resent all the times they paid “full” price when you clearly can get away with offering it for less. This typically leads to customers migrating to a competitor…even if it is slightly more expensive (as they believe it’s better or offers more value). Discounts should be used sparingly (they mean more to your customers then, anyway).
2. Believing Satisfaction and Loyalty are the Same Thing
A satisfied customer and a loyal customer are not the same creature. The former is generally content with the level of service and value they’re receiving, while the latter is devoted to you and your company. A satisfied customer will quickly switch to your competitor for a variety of reasons. A loyal one is typically a fan – sometimes diehard – of your company, product, service, corporate culture, and brand. They feel recognized, understood, and appreciated. Don’t confuse the two when evaluating your customer relationships. You want loyalty.
3. Treating All Customers the Same
While we may occasionally want to blend into the crowd, people usually want to be seen as distinct. If you’re sending the same message, the same email, the same newsletter, the same offer to every one on your customer list, you’re making a huge mistake. Customers expect targeted messages, marketing, and offers these days. And the technology and tools available to make that happen, quite frankly, mean you absolutely should be doing it. Even worse, do you send the same thing to current customers and your prospects? They are most definitely NOT the same, and it’s insulting to send introductory and prospecting material to individuals who have already done business with you. You need to personalize and individualize your campaigns and messages. Start today…before it’s too late. A quick tip? Send a short greeting to your customers on their birthday. Perhaps even offer a special discount or service reminder. They’ll feel appreciated.
4. Dismissing and Ignoring Customer Feedback
Collecting feedback on your product and service has never been easier. Online surveys. Quick phone calls. Social media chatter. You should be doing it all. It gives you valuable insight into how people really see your company, and how they really feel about your brand. But you have to USE the information you receive. Too many businesses collect the data, and then either ignore it or dismiss it outright. A bad review? That customer is a troublemaker. Unhappy with the latest update? They obviously don’t understand how to use it properly. Sound familiar? Feedback is one of the greatest tools at your disposal. Listen to what people are saying, thinking, and feeling, and then use that information to improve your product/service, to enhance their user experience, and to boost the sales funnel for your customers. Take it to heart, and don’t take it personally. When they feel you’re listening to them, they become not only satisfied, but loyal.
5. Taking Repeat Customers for Granted
How much time and attention do you give your frequent customers? If you’re like most businesses, they probably become a bit of an afterthought in the grand scheme. You know they’re going to purchase again. They always do. But like the gifted kids at school, they often need the most from you. Otherwise, you run the very real risk of alienating them and making them feel invisible and taken for granted. And when that happens – even if they’re still satisfied with you – their loyalty begins to wane and they may switch to one of your competitors (especially if a competitor is trying to woo them away from you). So, remember them. Follow up after orders big and small. Call and see if they need anything. Offer the occasional discount. Create a loyalty program. Take the time to make them feel appreciated and important…because they are.
6. Being Reactive Rather Than Proactive
Most businesses react to issues, problems, and obstacles only once they occur, but by that time, you’ve already created headaches for your customers. In order to retain customers and foster loyalty, you need to anticipate issues (in production, delivery, execution, feedback, experience, or whatever) and deal with them before they happen. Do it right, and your customers may never even know they existed. You’re looking out for and taking care of them every step of the way. And that will make them want to stick with you.
7. Too Much Reliance on Automation
There’s an automation tool for almost everything now. And saving all that time is not a bad thing, but it shouldn’t be at the expense of your customer experience. Automated social media posting and responding. Automated phone systems. Automated email responses. It’s quick, fast, and convenient from your end, but it often leaves your customers feeling frustrated (ever been stuck in an endless automated phone system loop?). They want to talk to an actual human being. Make that available, at least during regular business hours.
Retention should be very high on your list of priorities. Avoid these seven mistakes, and you’re halfway home. Work to make your customers feel appreciated and recognized. Differentiate your messaging. Go after new customers by all means, but also plan to make you and your company as sticky as possible. It’s your loyal, repeat customers that generate the most value over time. Play for keeps.
Contributed by Shyam Bhardwaj, VP of marketing at eShine Marketing.