You’ve probably heard the conventional wisdom that says it’s much cheaper/easier to keep an existing customer than it is to acquire a new one. The idea behind this is that the hardest part of building a relationship is the very first part where you’re establishing trust. Once you’ve gotten past that point with a customer, it will be much easier to get them to come back and make more purchases than it would be to go out and find a totally new customer.
Pretty much everyone accepts this conventional wisdom as fact (if you’re not a believer, here’s a nice list that supports this idea). And yet, most companies don’t do nearly enough to make sure that they’re retaining their existing customers. Most companies have a marketing department and a sales department, but how often do you hear about a retention department, or a VP of retention?
One of the main mistakes companies make when it comes to investing in customer retention is that they’re too passive. They take the “no news is good news” approach and assume that if a customer hasn’t complained about anything, then things must be good. The problem with this approach is that by the time a customer complains, it might be too late to make things right. For example, has your cable company ever transferred you to the retention department when you called to cancel? It’s already too late! Most people have to get really frustrated before they’ll reach out to a company, and that gives them plenty of time to forget about all of the trust you worked so hard to build.
The solution is easy: be proactive.
Don’t wait for a customer to contact you with a problem. Build regular customer contact into your normal workflow. The right approach to this will depend on your business, but it normally makes sense to set reminders in your calendar or CRM to make sure that no one goes more than 30/60/90 days without contact from you. When you reach out to them, ask them how they’re doing. Ask them if they’re still enjoying their most recent purchase, or if there’s anything you can help them with. If you really want to get fancy, put together a list of expert tips on how they can get even more value out of your product or service and send them those periodically so that they’ll actually look forward to hearing from you each time.
Of course, any type of proactive outreach is better than nothing. I can’t tell you how many times we’ve reached out to a customer with basically nothing to say (“just checking in” or something to that effect) only to have them bring up some huge new opportunity out of the blue. So remember: as important as sales and marketing are, the easiest sale you’ll ever make is to an existing customer.