Customer Retention

John Scott · 08-18-2007, 05:02 PM

They say that an existing customer is often 20 times more valuable than a new customer, considering the cost of acquiring new customers and the lifetime value of an existing customer. Of course that depends on a lot of variables.

Lexus values its customers, on average over the lifetime of the customer, at $600,000.

A neighborhood dairy may value its customers at $50,000.

Taco Bell values each customer at $12,000.

Many companies have instituted Customer Retention programs, in order to increase customer retention rates.

In an online environment, how do you suppose a company can best keep its customers? What specifics tips do you have to offer for customer retention?

Hostnetric · 08-18-2007, 05:48 PM

This is a great subject John. I believe that to many times webmasters focus to much on new customers and not enough about keeping the existing ones.

Some things we can do is focus on outstanding customer service for one. Even if we make a mistake or for even the customer we should not give them an excuse about policies or even place blame. We should simply take a look at the situation and see how we can best solve the issue quickly and to the satisfaction of both parties. The trick here is making sure the customer feels that you value their business.

Another thing that is not looked at enough is what can we offer to further enhance our services or products to create even more value for our customers. If your competitor is coming up with new and novel ideas or even new ways to package existing services then you stand to lose alot of your customer base to them. You have to always be striving to find ways to increase the perceived value of your company in the eyes of your customers.

Happy existing customers are going to recommend you to others they know. This is a cheap form of advertising for one and also in the eyes of these friends your company is allready trusted because their friend trusts you.

Remember this:

Success is not handed to you it is earned.

jmoe · 08-18-2007, 05:53 PM

Most companies make the most money from repeat customers, so customer service should be at the top of any business owner's list. It takes more time, money, and effort to acquire new customers than to keep the current ones happy and coming back for more...

factoring · 08-18-2007, 05:54 PM

Great article. Maybe a bookmark feature added to each page of the website. I know when I first was researching optimization techniques. I just happened to have bookmarked a page in V7N not knowing everything that is offered here. I then came back and joined the forum months later.

I am not sure how to add a type of bookmarking widget to a website but I am sure it is quite easy.

This can be very useful in Web Marketing and business in general.

Hostnetric · 08-18-2007, 07:17 PM

Quote:

Originally Posted by factoring

Great article. Maybe a bookmark feature added to each page of the website. I know when I first was researching optimization techniques. I just happened to have bookmarked a page in V7N not knowing everything that is offered here. I then came back and joined the forum months later.

I am not sure how to add a type of bookmarking widget to a website but I am sure it is quite easy.

Which article are you refering to Factoring.

kristeejo · 08-18-2007, 07:58 PM

I never lose a client unless I "lose" them.

I work very hard and treat their company as if it were my own. The only thing I ask in return is they don't squabble with me about price.

John Scott · 08-18-2007, 08:13 PM

I think one of the most powerful marketing strategies is relationship marketing. Building a relationship with the client, or having customer support people build relationships with clients. Get to know them, use their first name, etc.

kristeejo · 08-18-2007, 08:20 PM

exactly.

I used to keep a log of all my clients childrens names etc. when I worked in sales. IT WORKS.

MrCat · 08-19-2007, 05:38 AM

Very nice topic John! We are all aimed at retaining our customers. I think a great way of achieving this is by providing loyalty rewards to repeat customers in forms of discounts, freebies, etc. Offering them other than just mere services/products and being able to make them feel like a part of your family could make a difference.

Hostnetric · 08-19-2007, 06:03 AM

Quote:

Originally Posted by kristeejo

I never lose a client unless I "lose" them.

I work very hard and treat their company as if it were my own. The only thing I ask in return is they don't squabble with me about price.

Exactly. Most business owners are not going to worry about lets say $50 to $100 per month for an example if it means the good reputation of their business.

The mistake that many online businesses make is remembering to treat their clients as they would treat themselves. A happy customer is a profitable client for us for many years and the best and least expensive advertisement we have.

droplister · 09-04-2007, 06:51 PM

This is something I'm focusing on with a site I'm about to open. I have a bunch of features I plan to add that will really add value to the site. I'm not adding them yet because I would like to get some revenue stream first, but after that I'm going to try and add 1-3 new features monthly. This way they will feel that they are getting more and more for their membership fee each month and they might stay on knowing that it's always getting better. Not sure if that's customer retention, but I'm certainly going to use it to keep customers interested.

Vini · 09-22-2007, 03:16 AM

Wheather B2C or B2B the basic concepts of customer retention remain the same. From stage one, there are a few inherent features/tasks which have to be built in to the operational guidlines.

+ Create incentive packages (Vertical & Horizontal) according to analytics
and segmentation.

+ Draft a promotional timeline while taking into account special events (i.e.
the superbowl, Oscars, Christmas & so on) This will also help indexing.

+ Create Uniformity between visual representations as well as texts. For
example, use the same graphics & text for the mailer as well as your site.

+ Create an objectives chart and look at it daily to make sure you are in tune
with the objectives you set out to achieve.

+ Use A/B Splits on landing pages to see what works on penetrations, CTR, &
conversions.

+ If it works improve it, if not move FWD quickly.

+ Stay innovative and focused on what the client wants.

+ Monitor competitors

And A few other tricks I won't tell you about :-)

scorpionagency · 09-22-2007, 12:50 PM

Here is my quick 13 customer Service (retention) list.

1.) Always do Follow-ups with a customer to make sure there product/service is what they expected.

2.) Offer customers a Free subscription to updates and/or newsletter.

3.) Create a Customer support group and meet once per month for Lunch or live chat. You can help them with any issues and they can provide you with great feedback to better your product/service.

4.) Make sure your customers can navigate your virtual business (website) easy and add a FAQ page to help answer questions.

5.) Always answer a customer question in a timely fashion whether its Via e-mail or phone message. 1 hour max. is a good focus.

6.) Offer a toll-free number for any long distance customers.

7.) Hyperlink your e-mail address or provide a server side form so the customer does not have to type it out.

8.) Make sure all your employees have read and understand your customer service policy so they can better assist customers in a professional manner representing your company.

9.) Send customers Thank you cards after a purchase.

10.) Send seasons greetings cards to customers on the holidays.

11.) Always deliver More than you promised.

12.) If you make a mistake, let your customer know that you did and offer a solution.

13.) Create special events and invite your customers to attend, such as: Picnics, Meetings, Workshops, Seminars, Luncheons, Parties, Dances, etc.

Hope this Helps....

Webfu · 09-22-2007, 07:48 PM

REI has great model for this... They offer a 5% kickback on all the purchases you make. Then at the end of the year, they send you a check for 5% of whatever your purchase total was. I've heard or read some stories on their concept and it seems to be working well for them. They're killing it.

swiftmed · 09-23-2007, 12:02 PM

Hey,

yeah i agree with you on this one. on average 75% of my customers have purchased with me more than twice, 40% have purchased more than twice. i definately prefer retained customers than new but both are paying, so you still need to chase new customers, but at the same time. look after your existing customers.

TheFriend · 09-23-2007, 12:17 PM

I agree with scorpionagency.

John Scott · 09-24-2007, 04:48 AM

Quote:

Originally Posted by Webfu

REI has great model for this... They offer a 5% kickback on all the purchases you make. Then at the end of the year, they send you a check for 5% of whatever your purchase total was. I've heard or read some stories on their concept and it seems to be working well for them. They're killing it.

Yup. It sure did work on me - I spent thousands there. A lot if stuff I didn't need.

Forsh · 09-24-2007, 07:48 AM

Many customers have instituted Customer Retention programs, in order to increase customer retention rates.

Maybe many companies? Sorry, just got stuck on that one line!

I do totally agree with the post though. This is why I think small shops do well, like smart local shops who understand this principle.

John Scott · 09-24-2007, 07:53 AM

Thanks for the heads up - off to fix that.

marthrock · 09-24-2007, 09:36 AM

I think the easiest analogy is, to put yourself in place of the customer, how do you want to be treated? As a business owner and a customer, when you walk into any type of buyer/seller situation you have expectations on the type of service that you "expect". I think when a company or seller exceeds those expectations, and goes above and beyond that, you take notice. 2 great examples of this are McDonalds and The Ritz. they couldn't be farther apart in price points but the expectations are the same. One however goes far and away above what you might expect in regards to customer satisfaction. while the other meets the customers expectations time and time again.

With Mcdonalds, they have created such a level of excellence and expectation when it comes to their food, that people keep coming back over and over again because...They know what to expect, and they know that every time they go, it will taste exactly like the last time, it won't be bad, it will be EXACTLY the same. Thus repeat business and repeat customers are there every day.
The Ritz prides itself on exceeding their guests expectations. From learning your name, to providing you with top of the line amenities at every turn. They do this so well that you EXPECT it. But. If they fail you in any way, you are almost shocked and perhaps dissappointed. It rarely happens but The Ritz has taken customer appreciation and turned it into an art. They are the Gold standard in the hotel industry.
The bottom line is when you meet and then exceed customer expectations, you have a customer for life. But if you betray the customer in any form or fashion, that memory will stay longer than the good experiences.