Customer Retention

Do you know how many customers you lost last year?

How does that figure compare to the previous 12 months?

More importantly, do you have a target for improvement for next year? What impact will this improvement have on your revenue, profit and cash flow?

Gaining new customers is a high priority issue and gets a lot of resource, lots of management focus and discussion time and is usually a key metric for every business.

How many new customers do you need to simply replace the customers you are losing?

The average annual customer churn is 15-20% which is huge and means the business has to replace their entire customer base every 5 to 7 years!

This is a massive issue which deserves a much higher profile in management discussion because it is so much easier to retain an existing customer than to find a new one. You have to find and then invest time and effort to develop a relationship with a potential client so that they know, like and trust you enough to make that all important first purchase.

So how do we improve customer retention?

The quickest and easiest way to improve something is to know where you are starting and to review the numbers on a regular basis.

Brainstorm with your team to come up with ideas to improve customer engagement and customer retention and you will inevitably come up with things you can do immediately.

Record and review your progress on a regular basis and you will be able to see what has worked well and what hasn’t so that you can fine tune and adjust accordingly.

Why do we lose customers?

The vast majority of customers drift away to do business with someone else for one simple reason, the relationship is not strong enough due to a lack of engagement.

This accounts for nearly 70% of all customers lost!

Surprisingly, only 14% of customers chose to go elsewhere because they are not happy with the level of service they receive.

Price is low down on the list with only 9% of customers choosing to go elsewhere due to price.

Engagement issues are relatively easy to address and it is the one variable that will deliver the greatest benefit, improved customer retention and increased lifetime customer value.

Quick, easy steps to improve engagement and customer retention

~ Know you numbers – You can’t improve your numbers if you don’t know what they are

~ Find out what makes your customers unhappy by collecting feedback – Make sure you do something about it

~ Set targets for improvement – By how much do you want your customer engagement to improve and by when

~ Find the unmet needs of your customers – If you don’t, someone else will

~ Don’t just listen to those that shout the loudest – Most companies are good at managing complaints rather than working to actually resolve them

~ Prove you care – To enjoy a positive and strong customer relationship, 2 way communication is essential. You need to be in regular, value adding & relevant communication with your customers

If you need help with customer retention, we’d love to hear from you: hello@opticsaccounting.co.uk