What is the true cost of losing customers? And what can you do to avoid it? Let’s dive in!
The most important question to ask yourself is how much time, money and effort do you spend trying to increase customer retention? Most often, businesses only invest their money and energy in getting new customers, but what about keeping the customers they already have?
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In my own experience, I know how hard it is to get new customers daily, monthly, yearly, and beyond! Truth be told, that was my primary focus. Years later, I found it much easier to sell more to the customers I already had.
Beecause if someone had a positive customer journey with you, it would be a no brainer for that person to purchase from you again. However, you need to keep in mind this isn’t always a given. You have to give them a great experience and give them a reason to keep coming back for more!
Throughout the article, there are questions. Read them, think about them, answer them honestly. Any business owner knows self-reflection is important for growth, and if you don’t reflect, then you can’t grow.
Let me share an experience I had a month ago with a subscription-based service. It was a daily paid newsletter from a very well established company, and one I have been subscribed to them for almost two years. One day, as I was browsing on my iPad in private browsing mode, a banner caught my eye.
“Subscribe to XYZ (name of subscription) for just $4 per month!”
It caught my off guard because I pay at a rate ten times that price! They even advertised that new subscribers receive a welcome gift. Curious, I checked the offer and it was 100% legit. I decided to call them and I ask if I can get the same offer or a similar offer for the same price or one in the same range. (I understand they want to attract new subscribers, so, maybe, they give them an extra incentive).
After a few minutes on the phone, I was told this was an offer exclusive for new subscribers and I was not eligible. There was no other offers either. I ended up cancelling my subscription because it felt unfair to pay more than 10 times the price than a new customer. They cancelled my subscription, and I asked the representative why he didn’t attempt to get keep me on board in any way. He told me his management was solely focused on obtaining new customers only. I was quite surprised. How can you build a business without thinking about your current customers?
It is essential to get new customers in your business, and it makes sense to give them some kind of discount or another incentive to start doing business with you. But it is even more important to keep an amazing relationship with the customers you already have because they can provide you with a stable customer base and income.
If you are in the retail business and you don’t have a subscription or recurring product payment in place, then it is extremely important to focus on the customers you already have. Even if you are selling one-time products or you maybe only buy once in a decade, it still makes sense to be loyal to your customers base. Don’t exempt a grouping unless the segmenting is absolutely necessary (financial threshold, demographics, or the product doesn’t fit a need of a certain customer segment, etc.).
I sold HiFi electronics for almost 18 years and the average customer only buys a hifi system once in a decade. So it was very difficult to sell a new hifi system every week. We added extra product and services around our business to keep in touch with the customers but also give them a lot of value.
We shared weekly insights about the latest products, not necessarily to sell to these customer but to keep them informed. Even though we knew they will use the product for maybe ten years, it didn’t mean they might not have been in the market for something new with more features.
I also added complementary products to our assortment and would send current customers personalized emails to ask about product improvement and the experiences they’d had..
For example, if you spent $5,000 USD on a HiFi system, you wouldn’t want to spend that same amount six months later for a new and improved product. Instead, I would offer a nice upgrade to a current system for $50 USD, resulting in my conversion rate being well over 70%. Not too shabby, right?
My customers understand that we are willing to help them get an even better experience without spending a lot of money. Bigger and better didn’t mean unobtainable!