Blog entry

Retention is the Key to Success

 

Retention is the Key to Success

Customer retention – In any business this is the vital part as you want to ensure that once they have spent money with you, they keep coming back. Acquisition of new customers is costly as on average it costs five times more to get a new customer than keep an existing one. This also varies between industries and in some cases it could cost thirty times more. Increasing your retention rate by only 5% can increase your profits by 25% to 95%. Many companies do not realise the value of this and therefore focus on acquisition and this sometimes leaves their loyal customers unsatisfied therefore ready to leave for a competitor.

Customer retention helps and increases your profitability in lots of different ways that you might not have considered.

 

  1. Saving Money

This is possible because as mentioned it cost a lot more to acquire customers than retaining them. This means your marketing budget automatically is reduced since you do not have to pay for all the promotions about your business as you would without retention. Majority of the customers will already be familiar with your products or services so you do not need to have a large customer support team.

2. Repeat Business from your customers means ongoing profit

Loyal customers will be using your Business regularly and will probably spend more money. This also means that you would have more time and money to research and develop your products and services. Existing customers are also more likely to buy than chasing new leads. Your customer believes in your product or services so there is a trust that exists that must be valued and delivered upon. Gives you the opportunity to pay attention to what they prefer or dislike and you can work on improvements as your teachers (your customers) need.

3. Advertising that does not cost

Word of mouth is the most cost-effective way to advertise and it only comes from loyal, happy customers who tell their friends and family. Repeat customers will tell their business associates and friends. This is worth its weight in gold as that also creates more Business through recommendations and they have higher value. This is still the highest value business strategy.

4. Retained customers are your best teachers

Customers who come to you for repeated Business can give you a very valuable feedback and listening to them is so important. 97% of customers said they are somewhat more loyal to a company that implements their feedback, while 55% of consumers said they are not likely to continue being a customer of a company that ignores their feedback. (Appentive)

These customers will know where your company can improve in delivering them the service or the goods.

 

5. Loyal customers will pay premium prices

Long-time loyal customers are far less likely to shop around because you have built a trust and they rely on your quality to remain consistent. They will associate high prices for good quality.

These are just five simple retention factors and when you are busy building your Business they do tend to get overlooked.

Please Conact us shila@shinaroutsourcing.com

Phone 020 3893 8101  Partner www.awards.co.za