You have learn the startling statistic that’s recited with astonishing frequency and variability:
“It is going to value your organization “6 occasions much less” or “10 occasions much less” to maintain an present buyer on the books than to accumulate a brand new one.
We would quibble with the exact numbers, however it will look like a bedrock fact that saving clients, or extra to the purpose, not shedding them, is worth it.
By itself, that could be a legitimate assertion. Why lose enterprise, except it’s dangerous enterprise, however that we’ll save for an additional dialogue.
When buyer retention initiatives are pitted in opposition to advertising and promoting, attempting so as to add accounts to the books, I begin to squirm. Particularly in a poor financial system resembling ours, given a selection, it will be a significant mistake to redirect assets from buyer ACQUISITION to buyer RETENTION, which is de facto what the startling statistic implies.
In a dire financial system clients and purchasers will go away the fold for causes that don’t have anything to do with elements you management. Their very own enterprise fashions could also be below stress, or immediately turn into out of date.
For instance, as an example you promote train gear to gyms, which in flip promote memberships on a subscription foundation. So long as memberships are growing, there can be found funds to assist getting into gross sales contracts to your stair climbers and resistance units.
However when that membership tempo slows, the payback on funding seems prohibitively distant, so you’ll be able to’t promote the machines almost as simply, if in any respect.
Catering to client skittishness, gyms start to supply “no contract” memberships, and immediately they appear to you to lease or to hire your machines on an equally short-term foundation.
If the pattern continues, extra gyms might be shuttered, and fewer start-ups will change them. Your online business might be in dire straits, except you’ll be able to ENLARGE THE MARKET to your train platforms.
That entails advertising and promoting, maybe on to companies; at the least to potential consumers which have by no means appeared in your radar earlier than. Comparatively, each greenback you throw after the declining gymnasium sector in an effort to retain your clients, is wasted.
Do not get me unsuitable. I’ve been promoting buyer satisfaction packages for years, and I’m an entire zealot in terms of treating your present supporters, properly.
Nevertheless, if they’re an endangered species, on a brief path to extinction, that you must discover a appropriate substitution, and quick.
Treating them luxuriously is not going to create any extra the place they got here from.
This is among the unhappy truths that explains why customer support staffs are reduce mercilessly in financial downturns. Service personnel are great at supporting yesterday, however out of their depth in creating tomorrow’s income.
However it’s silly to let their expertise and buyer sensitivity vanish.
Retraining non-salespeople to promote is not at all times profitable, however it’s well worth the effort and assets. In spite of everything, they know your organization and product inside-out, they do not must be recruited, and you may deal with the one ability everybody must put to work: promoting.