Jason Phillips gives us some tips on retaining your customer-base.
Learning how to keep or retain your customers is an important skill that every business person should learn. It is so important that it can significantly affect your bottom-line or worse still keep you out of business completely. That is if you consider the fact that your customers do have a lifetime value. But what does this mean? Well, customer lifetime value (CLV) is a concept that refers to how much your customer is worth in monetary terms. It is a metric that is used in determining the appropriateness of acquiring a customer based on the perceived earnings from this person vis-à-vis the cost of acquiring the same person.
Okay so why is CLV important? You see getting new customers for your business can cost your company far more than retaining your old clients. In some cases, it can cost 5 times more than what you will spend in satisfying and keeping your current customers. Of course this does not mean that a company should not acquire new clients, but as it does this it should also pay attention to satisfying its current clients. Now this is not the only index that should make you do this, there are others as well.
Other indices
Besides making you spend less regarding your old customers, it has also been discovered that retaining your current customers can do some wonders to your company’s profitability as well. This is based on two indices. The first is that a small 2% increase in retention of your clients can have the same impact or effect as a 10% reduction in a company’s cost. Secondly, a 5% reduction in customer defection rate can increase profitability by as much as 125% depending on which industry your company is in.
Maintaining online relationships
Once you are able to turn your potential customers to actual buyers, then they have become your customers, but they can be lost in a twinkle of an eye. Remember it is much easier to lose them than to get them in the first place just like it is much easier to destroy than it is to build. So how will you satisfy and keep your customers continuously happy? You can do this by giving them real value, by providing support and by establishing regular contact.
- Real value
This refers to not just the quality of the product or service that your clients expect, but to the quality of the service that you provide after sales has been made. In other words, your clients want to know for instance, when the products they bought will be arriving, etc. Thankfully, there are e-commerce solutions online that can be programmed to provide these customers with the information that they require.
- Providing support
Things will definitely go wrong every now and then and your customers will need to get in touch. The way your company handles this will determine if your clients will be in for the long haul or not. Now the internet also offers solutions here. Firstly, ensure that all your contact numbers and email addresses are on your website. Also, provide a form online that your clients can use to report an issue or ask questions, including the ability to carry out a live chat on your site as well.
- Regular contact
Stay in touch with your clients, it is important. Out of sight they say is out of mind. In this way you will be able to remain in their minds. You can create a schedule that will help you in doing this. An email newsletter is a good way to achieve this. Through it you will be able to educate your clients on how to use product and do more with it.
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Jason Phillips has shared this post. He writes on customer perspective associated with many customer lifetime value groups and communities as their freelance and staff writer. Apart from that, he is a snow sports enthusiast.