I work with many business owners who are very often so focused on customer acquisition that they forget about how important and cost-effective customer retention is. According to the Harvard Business Review, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. Research by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by 5% increases profits by 25% to 95%.
One strategic business approach that I often recommend is to go deeper with the clients you have rather than invest the time to attain new ones. I’ve outlined below several tips to help you improve your customer retention rate:
Are your customers leaving you? If you want to improve your customer retention rate, you need to be aware of how many customers are leaving (the churn rate) and determine what is causing them to leave. Ask yourself what as a company you are doing that is causing your customers to leave.
Customers don’t buy from companies; they buy from people. 60% of all customers stop dealing with a company because of what they perceive as indifference on the part of salespeople (Peppers and Rogers Group). Have your salespeople become complacent? Are you making an effort to make your customers feel valued or do you take them for granted? Are you rewarding your loyal customers for their business?
Listen to your customers. Talk to your customers – after all, they chose you. Invest the time to ask them how they feel about your products/services. Understand what they are looking for and what their plans are for the future. Personal relationships are powerful and inspire loyalty. The customer experience is key to your success.
It’s not all about price. Companies are often totally focused on being the lowest cost provider. While being competitively priced is very important, there will always be someone who can come in at a lower price. Price alone won’t keep your customers; delivering the best value will. Value is a combination of price, trust, customer service, delivery, relationships and support.
Has your company lived up to expectations? It’s one thing to win the business; it’s another thing to keep it. Make sure your brand has delivered on its promise and your product/service meet or exceed expectations. Take a look at creating a great customer experience. Managing customer expectations is an important part of customer retention. Set realistic expectations. It’s better to under-promise and over-deliver.
Communicate! Communicate! Communicate! Communicating with your customers will keep you top of mind. Remember, there is always going to be someone lurking in the wings to swoop in and steal your business. Find out how often and by what channels your customers want to receive information. Always address your customers’ concerns immediately. If you make a mistake, own it and fix it. Your customers will appreciate your honesty and your efforts.
Do you prize deliverables over results? Every deliverable must be able to show a measurable result that will positively impact your customers’ business and help them achieve their goals and objectives.
Bonus Tip: Conduct an exit interview. There is no company in the world that retains 100% of their customers, no matter how good they are. If one of your customers is leaving, take it as an opportunity to improve. Conduct an exit interview to learn why they’re leaving. This information is extremely valuable and can help you to make changes in order to avoid a similar situation in the future.
Are your customers leaving you? Want more advice on customer retention, or general advice from other business owners like you? Find out if a TAB Board is right for you!
Forbes published an article on the importance of peer advisory boards, “10 Reasons To Join A Peer Group.” While I thoroughly enjoyed the read, I noticed the author overlooked a few key benefits that I’ve been lucky to witness firsthand as a facilitator. As a business advisor, I take pride in facilitating a peer advisory board that has proven results for my members. The peer boards help business owners reach new heights and succeed in ways they never imagined.
Peer advisory boards led by trained facilitators embody the power of collaboration, accountability, and perspective. A deep bond can be created and a business asset is formed that business owners crave and are hard pressed to find in any other forum. I’d like to share with you my list of top 7 reasons many business owners join a peer advisory board:
One of the greatest benefits of joining a peer advisory board is the exposure you’ll receive to other small business owners much like yourself. Entrepreneurship is unlike any other job, which means the challenges you face on a daily basis are just as unique. As a member of a peer advisory board, you’re able to share ideas with people in similar situations. As a result, the business ideas you’ll be provided with won’t just be erroneous but tried and true.
As the owner of a business, there aren’t many people you have to report to other than perhaps a Board of Directors or other shareholders. When you’re part of a peer advisory board, however, your fellow business owners will often hold you accountable for the executive decisions you’ve elected to make. Many peer groups meet once a month and they often expect some form of progress each month.
We’ve all had ideas that we considered to be foolproof, but as we’ve come to know in business, not every idea is feasible. In becoming a member of a peer advisory board, you’ll receive constructive criticism from the board regarding your potential business decisions. This allows you to fill in any gaps that you may have overlooked.
With competition at an all time high, it’s difficult to know whom you can share your ideas with. With peer advisory boards, anything that is discussed is confidential among members, so you’ll receive reassurance in knowing that you can freely discuss your business decisions without compromising trade secrets.
As previously mentioned, you’ll surround yourself with like-minded entrepreneurs as a member of a peer advisory board. What this means is that you’ll witness them experience successes and/or setbacks, just as they’ll witness the same for you. Either way, you’ll challenge one another to learn from your mistakes, grow, and ultimately succeed.
A common benefit I hear from board members is that a peer advisory board allows them to focus on developing their business rather than working in the business. Don’t get me wrong, one of the best qualities of a business owner is someone who knows the ins and outs of their product or service, but when it boils down to growth, strategic decision-making is a necessity.
As the saying goes, “it’s lonely at the top.” But it doesn’t have to be. Your fellow board members are there to support you through your journey, and many if not all are experiencing, have experienced, or will experience the trials and tribulations you are facing as a business owner. They are as much of a support group as they are anything else.
Have you ever considered joining a peer advisory board? What would be your top reason for joining?
LinkedIn is the world’s largest professional network, with over 300 million registered users in over 200 countries and territories, so it should come as no surprise that LinkedIn is one of the most powerful business development tools available today. Business owners and key sale leaders can leverage the power of LinkedIn for forging strong connections and finding new business.
LinkedIn has become the new “Rolodex”, the go-to place for finding colleagues, current clients, potential clients and vendors. With a professional profile, image and regular participation in groups, your network will increase, which in turn increases your reach and exposure and potential business opportunities. Many business owners would agree that LinkedIn has great potential, but are either concerned about the time commitment or are unsure how to go about getting started.
Here are a few simple steps to get you started in engaging in business development activities on LinkedIn:
- Step 1 – Look Professional: Just like a face-to-face introduction, your profile page is your first chance to make a good impression. Users with complete profiles are 40 times more likely to receive opportunities through LinkedIn. This means:
- Invest some time in writing a professional summary
- Add your skills
- Have a professional picture taken (do not take a selfie)
- Add volunteer experience and any awards you have won
They have recently added a recommendation feature on LinkedIn, which is like having an endorsement for your services. Try to have at least 4 recommendations on your profile page.
- Step 2 – Make Connections: Having a long list of connections is essential for increasing exposure and the likelihood of others finding you, but make sure they are the “right” type of connections.
- Decide if there is an industry you want to target or a type of job title e.g. accountant – simply search for exactly what you are looking for
- Once you have a few potential connections, find out more about them by visiting their profiles, seeing if you have connections in common, where they are located, etc.
- Send them a connection request by introducing who you are and the reason for contacting them
- If they accept your invitation, be active and take the initiative by arranging a phone call or a face-to-face meeting
- Step 3 – Join Groups: Think of these as a local Chamber of Commerce. There are groups for every industry, and they function as a place to ask questions, perform research, make new connections, and get noticed.
- Search groups that you think your target audience will visit
- Join ONLY as many groups as you can manage. Groups tend to send notifications, which is good if you plan to keep up with them, but annoying if you don’t
- Participate in the groups on a regular basis if you can. Your audience needs to hear from you and see you being active and offering expert advice
- Comment on other people’s posts, “like” them, and most importantly see who the regular contributors are and see if there is opportunity to work together or connect in some way
- To connect with them, follow Step 2
In addition to using LinkedIn as a business development and marketing tool, the platform can also be used for recruitment. Whether it’s sharing a job posting on your company profile, or paying for a job posting or sponsored job ad, LI allows you to see in a click of a button a more complete look at your candidates.
As you can see, LinkedIn has a lot to offer but the biggest step is making the decision to give it the time it deserves to foster and manage potential leads. From personal experience, investing time in LI as a business development tool will yield results that far outweigh that time investment.
Do you use LI for business development now? How much time do you dedicate to it and are there other features of LI that you have found helpful for business development?
We take risks every day in all aspects of our lives and risk-taking is important in business. In order to sustain consistent growth, be prepared to take on the risks and challenges that will help your business be successful.
Taking a risk requires careful evaluation and calculation. This will allow you to see if you are able to manage the risk and if your business is able to take on any challenges this risk may bring.
With my experience helping CEOs mitigate and evaluate business risks, I’ve come up with a list of 5 risks every business owner will face when growing their business:
- Sacrificing personal capital:
While some business owners are able to begin their journey by relying on external funding, many have to use their personal funds. Using your own funds may be a necessary risk that may be influential to the growth of your business.
- Putting trust in your employees:
It is impossible to do everything yourself. At some point in your business’ journey of growth, you will need to rely on employees. Putting a large amount of trust in employees is a risk you’ll have to take to move your business forward.
- Trying something new:
If you haven’t seen positive results from the way you’ve been running your business, try something new. Develop a new strategy, consider your product/service line – thinking outside the box and not being afraid to explore new possibilities has proven successful for many businesses. Change can lead to success.
- Putting yourself out there:
Get out there, meet people, and connect – not easy at first, but this is the best way to make valuable connections and grow your image as a business and as a business owner. Attending events, working the room and being active on social media are all methods of making connections and, while they can initially be intimidating and unfamiliar, are sure to produce short and long-term gains.
- Investing back into the business:
Even if your business is not as profitable as you may like it to be, don’t hesitate to invest back in to your business, knowing it will benefit the wealth and status of your business in the long run.
Risks shouldn’t steer you away from success but are necessary obstacles in the bigger picture. There’s no way to completely avoid risks but preparing for and recognizing them will help mitigate their impact. The biggest risk in business is not taking one at all.
What risks have you taken as a business owner? Did the result look like you expected? I look forward to an interesting discussion!
Building strong business relationships seems quite simple, but actually requires a lot of time, effort and tact. The key to building lasting and successful business relationships with your clients is to provide real value to them on an ongoing basis. In other words, you have to help your clients see that there’s more to your relationship than a financial transaction.
Developing and maintaining these connections can be challenging at times, but I’ve found the rewards are well worth it. A personal relationship, whether developed over days, weeks, months, or years, can lead to more connections, positive referrals, increased sales, and a general sense of fulfillment.
The following tips should help you strengthen and build rock-solid business relationships with your clients:
- Treat others the way you want to be treated. This is possibly the most obvious suggestion, and often the most forgotten. Put yourself in the other person’s shoes and provide the same level of respect and services that you would expect from someone else.
- Pay attention to body language. People can tell, consciously and subconsciously, how you feel about them. Keeping your arms and legs uncrossed, smiling, and making eye contact are simple ways to keep clients engaged and feeling at ease during meetings. I find the best tactic is to be yourself and not overthink things.
- Honesty is key. Like any other relationship, your business relationship won’t survive if you aren’t honest with each other. Clients are smart and know when they are being manipulated. Being open and honest in all aspects of business is critical, and to cultivate the kind of long-term relationships your business’ success depends on, you should build a reputation with integrity. Keep in mind that meaningful relationships (business or otherwise) take a substantial amount of time to develop and only a moment to destroy. White lies can damage your reputation, so take a genuine interest in the relationship and the rest will take care of itself.
- Be a useful resource. The more value you offer to clients, the more they will depend on you. Provide information clients may find useful, whether or not it benefits you. With that being said, don’t waste their time by sharing irrelevant news and offers you know wouldn’t appeal to them.
- Manage time well and always meet deadlines. Getting work finished well and on time is fundamental to maintaining strong client relationships. When you say you’re going to do something, do it – there should be no questions in your client’s mind that this may not be true. That freedom from worry helps build trust, and clients will stick with you if they can rely on you.
- Think of clients as more than just “clients” – think of them as people! Every client has his or her own likes, dislikes, preferences, issues, concerns and opinions. Your bond with your client will grow the more genuinely interested you are.
- Reward loyal clients. It’s easy to make the mistake of growing complacent with existing relationships and focus efforts on acquiring new clients. Rather than leaving old relationships to get stale, honour clients for their loyalty and business by giving them the treatment they deserve. Whether it is through reward programs, exclusive discounts, charity donations, or tickets to a basketball game, find a way to say “Thank you for your continued and highly valued business.”
- Be more than an email address. Email may be quick, but it’s also impersonal. Try a phone call, Skype chat, or set up an in-person meeting to bond with clients.
- Keep things light. At the end of the day, it’s all about connecting. Make clients feel more comfortable by joking around with them, and if you don’t know their sense of humour just yet, you can always poke fun at yourself to lighten the mood!
Do you have any client relationship building tips you’d like to share? I’d love to hear your ideas and about your experiences, so share them with me in the comment section!