As a business owner, your customers are your most important asset. These customers can be your biggest champions or harshest critics, with both sides of the coin equally important for business development and long-term success. Knowing how to retain customers is crucial. Ultimately, your customer base will drive financial revenue, making customer service a crucial investment for any company: a massive 96 per cent of customers state they would avoid a business as a result of bad customer service.
Attracting new customers is often seen as the key to helping a business thrive. Yet while keeping the customer pipeline healthy is of course important, there is a flip side to this: understanding the value of the customers you already have. Retention is far cheaper than acquisition, with a recent study showing that converting and onboarding new customers can cost up to seven times more than maintaining those already on your books.
Whilst the excitement of new customers might bring a buzz to your business, a high churn rate fails to recognise the long-term value of loyalty. Refining your customer service offering to improve retention will result in a highly engaged customer base, who are more likely to recommend your services to friends and family – with over half of consumers trusting this first-hand knowledge more than any other type of advertising.
Five ways to add value to retain your customers
Companies must develop a satisfaction policy which builds, maintains, and strengthens relationships with existing customers to encourage ongoing and sustainable business success. It’s vital to ensure your customer service offering adds value to retain your customers.
#1 – Recognise that each customer has a ‘lifetime value’
A customer’s lifetime value (CLV) is the total amount of money a customer will spend on your services whilst they remain part of your customer base. Calculating CLV will allow you to segment customers by profitability, identifying those you want to keep highly engaged and retain over a longer period.
You can increase lifetime value by taking time to build customer trust and nurture the relationship. Customer lifetime value is an investment. This was proven recently by Virgin Media, which recognised the importance of its services during the coronavirus pandemic. The business offered existing customers free additional benefits such as broadband upgrades and premium content: a clear investment in CLV. As well as encouraging retention, Virgin Media’s strategy also drove 25,000 new product sign ups through increased word of mouth promotion and renewed loyalty.
#2 – Keep the c-suite engaged
C-suite executives must take an active role in customer service and ensure a customer-centric focus is integrated across every level of their organisation. Studies have shown 64 per cent of companies with a customer-focused CEO deliver high quality customer service and increased financial success.
It’s vital to ensure senior leadership teams are engaged with your customer service agents. Taking the time to develop personal insight into the business’ customer service operations generates better feedback opportunities, allowing you to refine customer experience (CX) strategies and increase retention opportunities. Employees who feel their voices are heard are 4.6x more likely to feel empowered to deliver their best work.
#3 – Empower and equip your staff
The link between employee satisfaction and customer satisfaction is often overlooked. Your customer service agents are the face of your brand and can shape a customer’s first impression of the business. If you want to retain customers, it’s crucial that staff feel empowered and engaged in the workplace.
Customer service can be a highly stressful job: in America, customer service staff turnover sits between 30 per cent and 45 per cent, more than double the average for other sectors. Investing in employee wellbeing through training opportunities is a worthwhile expenditure and, over time, will improve staff performance. Over 80 per cent of high performing customer service workers say they receive training to help them succeed, compared to just 52 per cent of underperformers. Empowered employees will be more engaged, motivated, and knowledgeable – paying dividends for retention longer-term.
#4 – First contact resolution
Responding quickly and accurately to enquiries is key to keeping customers happy. Customer support information must be consistent and accessible across all enquiry lines to maximise the chance of first contact resolution. Ten years of research from Accenture revealed that 80 per cent of customers who shifted loyalties would have remained if the issue was resolved on first contact – making delays hugely damaging for customer retention.
Minimise the need for customers to use phone lines by improving your online information offering. Addressing common concerns with readily available FAQ pages or blogs will allow customers to resolve issues more quickly and easily, whilst freeing up agents to speak to those who need it the most.
#5 – Encourage feedback, be prepared to adapt
Customers and employees are a valuable source of feedback for any business. Customers can offer the best insight into a company’s CX offerings. Obtaining customer feedback through regular survey opportunities can help you to understand where you can make improvements which encourage retention. Companies that share customer experience feedback directly with the CEO achieve an average of 6 points higher net promoter score – a strong indicator of overall customer service success.
Encouraging employee feedback will help senior staff to understand the challenges and frustrations their frontline workers face, and how they can improve employee experience. A Gallup survey of 50,000 employees found satisfied workers to be more successful elevating their company’s reputation, retaining their existing customers, and attracting new ones. Try to integrate regular feedback opportunities into CX workflow – this will encourage engagement and provide more useful, timely data on employee experiences.
Aileen Allkins is founder of the Aileen Allkins Consultancy