Consistently understanding and improving your customer retention strategy might be the single most important thing you can do as manufacturer.
Bold claim? Perhaps.
But the numbers don’t lie. Increasing your customer retention rates by just 5% can increase your profits by 25-95%.
But it is not good enough to know just that your customers are leaving you. Why are they leaving and how can you identify at risk accounts before they leave you high and dry?
A Google search brings up almost 13.5m results for ‘how to win back lost customers’. Yet very few divulge how you can stop them leaving in the first place.
Almost a third of business owners estimate that up to 20% of first time customers don’t return to their business.
These hard-hitting statistics beg the question: why do so many business leaders suck at keeping their customers from leaving, identifying that they’re at risk and what can you do to improve your strategy?
Here are a few ways you can remedy your flailing attempts at customer retention.
Create loyal customers
The cost of keeping your customers is between 5 and 10 times less than the cost of securing a new one. But fostering customer loyalty is by no means easy.
It takes time.
You’re not just getting them to keep buying from you, but changing their attitude and behaviors that means they favor your company over your competition.
Think about the reasons why you personally return to certain brands or service providers? Is it purely cost? Good service? Quality products?
What keeps you going back?
Once you have loyalty, repeat customers become a source of long-term, reliable revenue.
Make it hard to switch
68% of customers leave a company because they believe you don’t care about them.
Understanding your customers’ pain points can be a game changer when it comes to knowing exactly which features and benefits of your products offering keep your regular customers coming back for more.
Research shows that an average repeat customer spends 67% more in month 31-36 of their relationship with a supplier than they do in months 0-6.
Your existing customers are your ‘low hanging fruit’. That is, they’re the easiest to reach and are ripe for the plucking. They’ve obviously already seen some value in what you do so convincing them to stick around shouldn’t be a huge ask.
So, committing to keeping your customers on side is worth its weight in gold (almost).
If they’ve already bought from you once, your conversion rate in the future will be infinitely better, as long as you ensure all their needs are met.
Adding value at every stage of your customer’s journey with you from ordering, to delivery and even day to day interactions will set you apart from the masses that aren’t prioritizing value over transactions.
Consider your after sales support, your customer service and product range. How can you improve these to make it more difficult for your customer to leave?
Become the ‘go to’ people when customers are encountering a problem with experienced front line staff that will go the extra mile to ensure continued customer satisfaction.
Once you’re in a longer-term relationship with your customer, you know them like the palm of your hand. So, use that knowledge to keep them happy.
If the switching costs outweigh the allure of a competitor, your customer will stay put.
Identify typical customer profiles
Use segmentation techniques, customer profiling and buying patterns to consider how you can better serve your other customers that perhaps aren’t spending quite as much as they should be.
Are your customers missing out on a bulk-buy promotion? Or are they not taking advantage of a multi-buy offer you have running?
If your ‘ideal’ customer tends to follow a certain journey when they are buying from you, how can you make this experience better for them and your other customers?
Say for example your customer is buying $1,500 worth of printing toner from you but most other customers are buying both toner and paper from you, where is your customer getting their paper from? Can you offer a better deal that will bring their business your way?