I’ve met with more than enough companies over time to know that many, if not most, fail at client retention.
It’s not that they’re not getting repeat business from their clients, but they’re not using the insights gathered from those clients that stick around to work out why others pass by, only buying from them once or twice before moving on to competitors or substitutes. They’re not setting out to deliberately retain their clients – they’re just lucky that a select few find enough value in the relationship to keep buying from them, filling the gaps between new clients.
There are many percentage points of profit going to waste each year due to this lack of effort.
Luckily, as with many marketing problems, it can be solved with the judicious application of research and insight.
This is the uncomfortable part, and the reason why so many companies fail to act on this tactic… you’re going to have to ask your clients, either personally, online or through a third party for information about what they think of you and why they do (or don’t) deal with you.
Pro-tip: your marketing gets better the more useful information you have available on which to base your decisions. Top-level stuff like “would you buy from us again?” or “how do you rate our service out of 10?” is kind of useless at telling you what to do next. Those questions just produce measurements – they don’t produce prescriptive conclusions.
Nobody likes being told that they haven’t lived up to expectations or they failed in some way that caused the loss of a customer. But if asking the hard questions this year could make you $100,000 more profit next year, isn’t it worth it?
To create useful marketing tactics off the back of your research, you’re going to have to answer these questions:
- What consistent themes underpin the reason that people choose to buy from you multiple times?
- What consistent themes underpin the reason that some people have bought from you just once or twice?
- What were lost customers looking for that they didn’t get from you?
- What aspects of your product or service delight your regular customers?
- What are competitors or substitutes offering that is being valued more?
Knowing the “why” of purchase decisions (no matter whether it was from you or not) is the key to making changes to your marketing mix that will boost your client retention rate.
I heard a stat once. More than 60% of people who switch their purchasing from one company to another do so because of perceived indifference. Regardless of the accuracy of that claim, when it’s as easy as asking some current and and lost clients “why?” then why wouldn’t you do it? If it can result in just 5% of customers buying from you once more in a 12-month period, you can be sure you’ll offset your research investment many times over.