You may be surprised to find out how many businesses know very little about the customers they’ve won. In these challenging times, it is imperative for businesses to understand their current customers and for them to find out who their potential customers are.
Understanding your customers will help produce targeted and effective marketing campaigns that attract like-minded individuals who will become customers. Understanding your customers and what they value about your product or service will also help you create customer retention programs that will reduce your customer turn rate.
Just some simple analysis will provide the focus you need to invest in marketing, customer services and loyalty/retention campaigns that will substantially increase the profitability of your business.
Why are retaining customers so effective?
The process of attracting new customers (also called customer acquisition) can cost over three times the amount of retaining existing customers. Many larger businesses understand this and provide some very attractive incentives from their customer retention departments. Have you, for example, ever tried to swap your insurance or mobile phone contract?
My advice is to make sure you understand your customers and work hard to keep them.
Loyal customers make money!
Loyal customers not only cost less to keep, they also do a lot of your marketing for you by recommending your services to others. If you pay attention to your customers and correctly segment them, you should reward loyalty with incentives and giveaways. Developing a loyal customer base also presents opportunity for your business; it can provide the foundation for new product or service innovation, or even strategic partnering with an associated business offering. This provides a rich opportunity to cross sell and up sell opportunity for your business.
Taking care of your customers
Just following some simple rules can provide you with some rich insight as to what to do with your business. Understanding your client base will help you target individuals who may also like to buy your services and knowing what makes them stay customers will help you produce some good best practice client service processes that will drive customer retention and reduce customer churn.