For too long marketing and advertising has concentrated on acquiring new customers.
I can understand this.
When I was marketing director at American Express it was my prime responsibility.
It was fun, sexy and easily measured.
It was how careers were made.
Unfortunately whilst we concentrated on generating new business we tended to ignore the thousands of customers that left us each month.
The message therefore is that if you want to grow your business you need to plug the leaky bucket.
It is an expensive exercise to keep acquiring customers then to allow them to leave after a few months or years (At Amex it used to cost us on average $150 to acquire a new card member but only $50 to retain them).
Here are 7 suggestions of how to improve your customer retention:
1. Start measuring how many customers are leaving.
It is amazing how many marketing or business leaders can tell you how many new clients they have attracted but struggle with measuring how many have left.
If you want change you need to start measuring this figure.
2. Include the goal of improving the retention of customers part of a senior leaders KPI’s.
3. Find out why people are leaving.
This is an obvious point but if you want to stem the flow then find out why people are leaving and try and address this situation.
4. Create a compelling story around the importance of retaining customers.
My boss used to always ask me the same question — Ken, what are you doing today to stop the flow of customers?
He would say in a rather colourful way — Ken — another bus has pulled up out the front of the building and our customers are saying good bye and they wont be coming back.
5. Put your best people on solving the customer retention challenge.
6. Insure that you are attracting the right customers for the right reasons so they are less likely to leave.
7. And finally realign your recognition and reward program to reflect a greater emphasis on retaining customers.
These suggestions are just common sense and apply equally to all size businesses.
Happy customer retention.