Why it pays to look after your existing customers

Over the last 10 years, I’ve learned numerous lessons managing my own businesses and also by consulting to my customers and by far the single most significant lesson is ensuring that customers stay happy.

The logic for this is watertight. Marketing people will advise you it costs between five to seven times more to win a new client than keep an existing one.

According to some, reducing customer attrition by as little as 5% may result in more profits of between 25% and 125% When times are booming and sales are strong, it is often easier to fill gaps left by a departing client. There’s also not as much of free time to identify explanations why the former customer left or do something to stop it.

As always, it takes a major recession like this one to prompt all businesses of the significance of caring for existing relationships and keeping customers loyal.

Challenging times are already most likely forcing your customers to ease costs and seek ways they can save. Establishing a concrete, trusting connection with them can lessen the likelihood of your company being top of the list of cutbacks. Keeping up a regular, well informed dialogue helps retain customers. Find out what they want and how the service could be improved.

To avert being intrusive, it’s always politic to ask them where and how they’d like to be approached and how often.  As soon as you attention, be ready to talk openly about everything that concerns them. Given the present crisis, this may perhaps involve anything from the awkward matter of a possible reduction in price to be alternative ways of working. However it could also identify other areas of improvement unconnected to the recession, such as how well your sales and marketing people are performing or how your customer’s account could be handled differently.

Companies should think differently if they are to emerge from this recession. Large or small, we’re in this slump together, so it makes common sense to operate in partnership with customers and suppliers to guarantee survival.

At Business Advsiory Accounting & Tax Services, for instance, it’s not just our direct clients that we care about as partners but also the businesses which supply us with our hardware; software, stationery etc. We might pass on any handy information to them on managing the effects of the downturn, for example, and they to us. The benefits of this are that we empathize where they’re coming from and what they’re doing to lessen risk in a recession, and vice versa.

While all this is going on, your service delivery should be be top-class so work vigorously to maintain an outstanding customer experience with clients, new and old. Develop and perfect every part of your offering from how you work to the quality of your products or services.

By pulling out the stops to help old customers, you’ll not only retain them on board but they’ll also pass the word about and help you secure new ones. And don’t forget to reward them for their loyalty: smaller companies may not be able to stretch to the expense of a loyalty card scheme but there are numerous little gestures you may make to keep them content.

Spending a small amount of money on your current clients now will be advisable in the longer term when this recession picks up.