Studies have shown that businesses lose approximately 50% of their customers every five years. This is referred to as the churn rate or rate of attrition. For a business to continue to grow, its ability to consistently attract new customers should exceed its churn rate.
It’s true that obtaining new customers is critical to business growth, but having established customers repeatedly purchase from your firm over the long term can grow your business exponentially.
How do you keep customers coming back?
The first thing to do is become customer centric. Maintain the pulse of your customer base by frequently asking questions and acknowledging their responses. Empathize with customers’ feelings by being polite and understanding. Position your inquiries as an opportunity to improve their experience with your firm. Everyone wants to feel good about their purchase decisions, so give them every opportunity to fulfill that desire.
You must learn the overarching reason why people do business with your firm.
Understand what is driving your existing customers to do business with you. Is it your services, ease of doing business, perceived quality of the products that you offer, pricing, reputation, or your helpful employees? Even though price is a consideration, rarely is it the most important reason why someone does business with your firm. A superior, friction-free experience can many times offset a higher price.
You must also understand the customer lifetime value. This is an estimation of the net profit attributed to your future relationship with a customer. You have to shift your focus from one-time transactions to the long-term nurturing of an ongoing customer relationship.
When you encounter a dissatisfied customer, you must quickly resolve the situation. The sooner it’s resolved the less opportunity for the customer to become irate. Quickly addressing complaints demonstrates that you value your customers and leaves them with a good impression of your business. Remember, on average, dissatisfied customers will tell between 9 and 15 people about their negative experience.
If you would like customers to remain loyal to your business you must ensure a friction-free, positive experience. When issues arise it’s important to manage them immediately to maintain loyal customers. Customers want to feel good about their purchase decision so give them every reason to do so. They’ll feel good about themselves because they feel good about you.