Of Customer Retention And Satisfaction
Every business leader knows the simple truth: It’s cheaper to keep a customer you already have than to acquire a brand-new customer outright.
But it’s not just about costs, because successful customer retention means a stronger brand identity and company reputation as well.
Robust customer retention strategies, however, provide even more hidden benefits than just cheaper customer acquisition costs and greater brand loyalty. Here are four little-known benefits of using customer retention techniques in your sales process and business approach:
1. You Already Have Them In Your Database
You should already be leveraging your sales database to track average customer retention and contact clients before they’re likely to leave for a competitor. However, this customer retention tactic comes with an added benefit: These contacts are already in your sales database.
Unlike new prospects whose contact information is often incomplete and whose relationship you have to build from the ground up, current customers are simpler and easier to maintain from a database perspective. Not only can you more easily track the (possibly declining) relationship of each current customer, but you also have the ability to more quickly track and address concerns before they decide to do business elsewhere.
2. Cross-Selling And Upselling Are More Effective
When closing a deal with a first-time customer, any sales person tries to cross-sell or upsell other products or services to make the deal more profitable. Yet, completing a successful cross-sell or upsell is less likely to happen with new customers and prospects.
Since a current customer has been with you for some time and has experienced your product or service first-hand, they’re more likely to upgrade or make a repeat purchase. As a result, it’s much easier to close a cross-sell or upsell deal when you have an established relationship with a customer.
In addition, not only do cross-sells and upsells increase top-line growth for your business, but the more of your products and services a customer finds useful, the less likely he or she is to leave you entirely.
3. Selling “Sticky” Products Increases Retention Further
When it comes to customer retention, not all of your products or services are created equal. Just because an offering is your most profitable doesn’t inherently mean it will keep customers continually coming back to your business. Nevertheless, certain offerings are “stickier” than others and increase your chances of long-term customer retention.
The more painful or difficult it is for one of your customers to switch between your offering and that of another vendor, the “stickier” the product or service. Historically, your sales data should show you which offerings caused customers to preserve their business relationship with you. When you focus your customer retention strategy on upselling these particular products or services, you retain more customers in the long run.
4. You Generate Even More Prospects (Who Are More Qualified)
When your current customers are not only satisfied but ecstatic about your company, you reap a return in terms of long-term customer happiness, but you also realize that return in the form of a new source of business: referrals. The return on investment in word-of-mouth advertising from referrals far exceeds other channels of sales and marketing.
Prospects who come to you as referrals are often the most qualified and ready-to-close opportunities because they already have a testimonial from a trusted source (one of your current customers). Referral leads are also easier to close since they’re less likely to consider your competitors.
Your business is never going to stop working on new lead generation or customer acquisition, but you need to balance out those efforts with a generous investment in customer retention. While closing new business might be exhilarating, your company won’t truly advance and grow without retaining your current customers as well.
Is your sales revenue chain as strong as you want it to be? Or do you have some missing links in need of repair? Click below to download this free guide from Invenio Solutions to repair and reinforce your sales chain for reliable revenue and maximum growth.