Five Customer Retention Tips For

Entrepreneurs

• Going for new clients?– Entrepreneurs fail to effectively address the need to retain customers

they already have.

• It’s far easier to sell to existing customers– About 50% easier according to Marketing Metrics

• Startup entrepreneurs find it more exciting to focus on customer addition– A bird in the hand is worth two in the bush

Never Underestimate the Value of Retention

• Do you think customer retention plays a relatively minor role?

– According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%

– 80% of your company’s future revenue will come from just 20% of your existing customers. (Gartner Group statistics)

– Attracting new customers will cost your company 5 times more than keeping an existing customer.

Implement an EffectiveCustomer Retention Program

• Customers don’t owe you their loyalty– You have to earn it

• What customer retention program does?– Identify, track, and custom promote to those customers who are most

likely to become loyal, long-term sources of revenue.

Avoid MisreadingYour Customers

• Misunderstanding how customers think keep retention rates low– 80% of companies surveyed said that they offer superior customer

service, but only 8% of their customers agreed with them. (Harvard Management)

• Why your customers followed you on social sites?– companies listed discounts and purchases among the least important

reasons. – Customers listed discounts and purchases as the major reasons for

following a company on a social site

• Focus more on actual customer behavior, not on the predicted behavior

Engage Customers Through Social Media

• Dial down the corporate presence– Give your customers a voice and a forum– Let them build the traffic

• Have Facebook fans and twitter followers? Stay Engaged – Immediately respond on whatever is being said (both good and bad)

about your company. – Identify customers (followers) who are the most loyal, send them

personalized “thank you” emails, incentives, coupon codes – Always want to take care of your social media savvy customers, they

can either be your most powerful advocates or your biggest PR nightmares.

Run Relevant Promotions

• Remember?– 80% of your future revenue will come from 20% of your current

customers.

• keeping customers actively engaged with your brand– Make them feel good about doing business with you– Encourage them to do more of the same

• On a more personal note:– Promotions such as sending promotional gifts, birthday cards, or

staying in touch over the holidays

• Being passive about customer retention only leads to greater attrition

• Companies that play an active part in communicating with customers to keep them engaged have better customer retention program; greater customer loyalty