Shot #43: Customer Retention: Why & How?

March 30, 2021

Hi 👋,

I see I lot of new community members on the list this week. Hope you will enjoy reading this shot. 😃

Here you go..

We have heard a lot about customer retention and why it is important.

But to give you a standpoint, let me share some insights 📝 with you:

  1. Acquiring new customers can cost up to 5X more than retaining the existing ones.

  2. 5% reduction in customer churn can increase profits by 25%.

  3. Profits tend to increase over the life of a retained customer due to repeat purchases, referrals, reduced cost of servicing, etc.

  4. Satisfied customers are the company’s CUSTOMER RELATIONSHIP CAPITAL. Let’s say your company gets acquired by a larger company. In that case, the larger company will not only pay for your physical, IP & digital assets but also for the satisfied customer base

Now you truly get it, why retention is important. 😎

The companies that have created very large customer relationship capital have excelled at these 4 strategies 👀:

  1. Reduce customer churn ⏳: Having a knowledgeable sales & support team will improve customer satisfaction. Resulting in reduced customer churn.(Hint: Optimise your TAT (Turn Around Time) by training your staff) 

  2. Increased longevity of the customer relationship 🤝: A customer that is more involved with the company is more likely to stay around.E.g: Honda- Approx. 65% of new Honda purchases replace an older Honda.(Hint: Can you build a community around your product where you can share free knowledge?)

  3. Increase share of wallet 💸: Sales from existing customers can be increased with new offerings and opportunities.E.g: Harley Davidson sells more accessories like gloves, biker jackets, helmets and sunglasses than motorcycles.(Hint: Can you create or collab with a new product/service that is a value add to your primary product?) 

  4. Focus on high-profit customers 🤑: The most profitable customers should be given privileges. They should be made feel special. Period.(Hint: Simple thoughtful gestures like birthday gifts, pre-launch product testing or exclusive event invites can send a very strong positive signal to them.)

Found this shot interesting? Please share it on Twitter or LinkedIn.And, don’t forget to tag me 👇

Thanks,

LuvCo-founder ExperienceSaga.com

P.S: Connect with me on Twitter & LinkedIn(About Me)