A sale is not the back door of the sales cycle. It’s the door to another sales cycle. Whether it’s an up-sale, cross-sale or down-sale. Every sale should lead the customer into another sales funnel, or at least an “incubator” as they wait for your next product.
This is where and why customer retention comes into play.
Every business needs to put a system in place that ensures that all customers, or most at the least, become recurring customers.
Why Place Value On Customer Retention?
• Cheaper Than Getting New Customers.
Turning a prospect into a customer is hard work. And yet many times that hard work ends up going down the drain. After closing the sale, it becomes about the next sale. The current customer is relegated to yesterday’s news.
What many forget is that by continuing to nurture the current customer, they would be saving their company, and themselves, a lot of time, effort and money. In fact, it’s cheaper and easier to retain a customer than it is to gain a new one.
Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. Havard Business Review
In other words, there are more sales and profits in your current customer base than in searching out new customers.
• Loyal Customers Equal More Sales.
Once a prospect becomes a customer, it is easier to sell to them the next time. Look at the staggering results from a research conducted by Bain and Company:
The bottom line: increasing customer retention rates by 5% increases profits by 25% to 95%. Bain & Co
This is why every business needs a customer retention program in its strategy. Customer retention results in more sales than customer acquisition.
Whatever product/service you are selling at least 65% of your current customers, if properly handled, will come and buy again.
Why let those burning hot leads slip away?
• Customer Churn Is Expensive
Customer churn costs businesses in the US $83 Billion. Wow! Talk about taking bottom lines.
Every customer you lose will influence others in their circles negatively against your business.
The best way to avoid customer churn is to have a good customer retention system in place.
7 Simple Ways To Retain Customers
1. Sell Products Your Customer Can Swear By
No one likes being sold a lemon. Unless of course, they want to make lemonade.
But when it comes to products and services, selling “lemons” is a sure way to lose customers.
The best-kept secret in customer retention is this: focus on quality, not just profits. Create a product or service your customers will swear by. A product they will happily buy again and again and again and again and, well you get the drift.
You only have one shot at impressing your prospect, make that shot count by producing quality products and services.
Quality retains customers better than anything you may try to entice them with.
57% of Centennials, A.K.A Generation Z [your long-term customers], say quality drives their loyalty to a brand more than any other factor, even more than price (55%). Yes Life Cycle Marketing
Your main focus in customer retention should be a quality guaranteed product.
2. Follow Up With Stellar Customer Service
Closing the sale is not the end of the journey. Rather, it should always be the beginning of a beautiful relationship.
Many think once they have sold a customer, it’s time to find the next victim. This is a toxic mentality.
When a prospect allows you to be part of their life by buying into you, that should be the beginning of sharing a part of their life. A part they entrust you to improve with your product.