Ask any business mogul and they’ll confirm business is as much about relationships as it is about getting deals done. If you provide a positive customer experience over time you’ll forge a strong relationship. But there’s a cost associated with providing the level of experience that customers require. Is it really worthwhile putting such effort into it? The evidence suggests it is.
Positive relationships bring with them a variety of traits that encourage openness and trust. We all know we are more open to listening to people we trust, taking their advice and trying out recommendations they give. One survey shows 92% of people trust recommendations from friends and family more than any other type of advertising, while another that 65% of US internet users refer to word of mouth to family, friends, and co-workers when looking for a physician.
It’s the same with positive customer relationships. If you can build trust, deliver satisfaction and provide overall positive customer experience, you’ll enjoy loyalty through better customer retention.
At its core, a positive brand-customer relationship translates to a customer trusting that brand more. And in turn, these customers have a greater willingness to do repeat business.
Why Is Customer Retention So Important?
Customer retention is all about keeping existing customers happy, maximising the likelihood of repeat business.
Research by Invesp shows that conversion rates of sales opportunities to existing customers are extremely different from those with brand new prospects. There is a 60%-70% probability of selling to an existing customer compared to just a 5% to 20% chance to a new prospect. It also reveals that existing customers are 50% more likely to try a new product compared to new prospects, and are willing to spend 31% more, compared to new customers.
What’s more, acquiring a new customer is significantly more expensive than retaining existing ones (5%-25%) but that increasing customer retention rates by just 5% can translate to increased profits of between 25% and 95%.
In fact, Invesp says that 89% of companies view customer experience as a key factor in driving customer retention.
How To Boost Your Customer Experience
It’s not especially difficult to boost the customer experience your offer, boosting the customer relationship that drives it and customer retention rates. There are several things you can do.
- Map The Customer Journey
Understand the process your customers follow in their decision-making. Then ask if your customer’s journey is as convenient and straightforward as it could be. Are there any irritating complications? Could their journey lead to confusion? How people interact with your company website and social media can reveal a lot. Once you understand the customer journey, you can optimize each stage to improve customer retention.
- Make Processes Friction-Free
The smooth-running process is a key part of the customer experience. If a customer likes how the system works, they’ll return; if they face awkward obstacles, they’ll go elsewhere. Again, it’s about being simple and convenient. So, ensure contact is made easy and replies are made immediate.
- Engage With Customers
Lack of communication is going to damage any relationship; so, lack of engagement is going to damage customer relationships. Regularly reaching out fosters a stronger connection with customers.
- Understand Customer Problems
If you can see the world through your customers’ eyes, you’ll be better able to identify what they need and offer the right solutions to their problems. Offer the solution, and they’ll be more likely to you.
- Ask For Feedback
This is invaluable, for two distinct reasons: customers feel valued and it provides insight into how your customers think and feel.
Ask the right questions and you can calculate your company’s Net Promoter Score, used to gauge the loyalty of customers to a company and the likelihood of repeat business from them.
Kefron’s Net Promoter Score
Over 66% of our clients have been with us for 5 years or more, so we know the importance of customer relationships and how it impacts our customer retention efforts. We run an annual customer survey every December to ascertain how they would recommend working with us, and from that calculate our Net Promoter Score.
We’re proud to have achieved a high Net Promoter Score of 77.24 this year, which ranks as ‘excellent’ and is an increase on last year. But for us, the true value of this data is that it tells us what we are doing right and what we can do better. In truth, it’s the foundation of our success.