Who Wants High Customer Retention?
Hopefully All Small Businesses Do!
Are you losing customers in your small business? Or do you have unhappy customers that you risk losing? Go on, be honest with yourself. Most businesses have customers that they unexpectedly lose to a competitor. Customer retention doesn’t have to be a problem in business, but often it is.
Recently I had an experience that left me feeling annoyed as a customer. Sadly it was with a charitable organisation that I like and have loyally supported for a number of years. They did some things that I found really irritating, which also led me to tell them I found their behaviours inappropriate. They challenged me, and told me that they were a business too and needed to act in this way. I disagreed. In the end, what they have ended up with is a loyal customer who is not happy and may take her ‘charity dollar and time’ elsewhere as there are plenty of charities needing support across the world!
My experience got me thinking about how small businesses may or may not treat and value their customers.
Did you know that studies have consistently shown that approximately 84 percent of customers who leave a supplier depart due to perceived indifference or an unresolved conflict? Only 9 percent of customers who leave do so because of price. I find these statistics fascinating and thought provoking.
What are you doing in your small business to ensure that your valued customers feel important and looked after, and that any conflict that arises is resolved?
Also, do you know which customers are most vulnerable to moving away from your business? I call them your ‘Look Out’ customers. The ‘Look Out’ customers are those that are highly profitable to your business, but you are not enjoying working with them and they may not enjoy being serviced by your business. What would happen if you lost a whole lot of profitable customers? What might that do to your business?
In my opinion, businesses must continue to evaluate the way in which they are supporting and servicing their customers, ensuring their customers feel valued and appreciated. If you are not thinking about this and if you don’t have plans in place to ensure customers are valued, then your business runs the risk of losing customers.
One way to achieve this is to talk to them. Perhaps you can survey your customers to see what they are thinking, explaining that your business is constantly seeking to improve the customer service it offers. You may be surprised (or even disappointed) with the responses you get. Regardless, the information will be helpful in enabling your business to better serve your most important customers.
Do you know who your most profitable customers and valued (or enjoyable) customers are? Many businesses do not. I have developed my L⁴ Customer Profitability Quadrant ™ which enables a business to determine the status of all its customers. L⁴ means your customers fall into four quadrants, being:
- ‘Lose Them’ – these customers generate low profitability and low enjoyment or value to your business.
- ‘Look Out’ – these customers generate high profitability and value to your business, yet the enjoyment is low, so there is a ‘flight risk’ with them.
- ‘Lift Up’ – these customers are valued by your business and enjoyable to work with, but they are not very profitable and the chances are high that your staff are spending too much time servicing them because they are enjoyable.
- ‘Lots More’ – these customers are ‘gold dust’ for your business. They are highly profitable and valued, and they are enjoyable to work with. They need to be thoroughly looked after by your business, and you want more of them.
In summary, no business wants to lose customers unnecessarily. Quality of service, respect and appreciation will go a long way towards ensuring customers remain loyal.
If you would like to learn more about how to determine your own L⁴ Customer Profitability Quadrant™ for your business, then please go to www.adelemclay.com/free-resources to download the FREE e-book entitled Who Are YOUR Most Profitable Customers?
Knowledge is power. By understanding the dynamics of your customer base, you are better able to respond to ensure you retain and grow your most important and profitable customers.
Could some guidance from me be helpful to you? If so, please arrange a free 30 mins Skype strategy meeting with me. Here’s my calendar to book a meeting. I’d love to support you in some way to gain ‘seductive clarity’ in any aspect of your business or life.
Other articles on Branding, Marketing and Pricing:
Increase Your Prices and Make More Profit
Do You Compete on Price? Bad Business Decision!!
Is Customer Service YOUR Key to Business Success?
Creating Superior Customer Value – do you do that in your business?
Finding Customers via LinkedIn
Using YouTube for Finding Customers
Which are Your Most Profitable Customers?
What is a Customer?
What is Business Marketing?
What’s your Personal Brand?
