“What do you mean the customer went elsewhere? Are you kidding me? When did that happen? Why did they leave? I can’t believe it!” Have you heard (or said) these words in the past few months or so?
How many times have you lost a family or other business to a competitor?
Well, as we all know, business comes and goes but the sad part about it is that more times than not it’s because we’ve lost track of them or taken them for granted.
Which brings me to the question, “Why do customers leave?” Curiously, most business owners and managers have the exact wrong idea about why customers leave. Most people believe that customers leave because:
- They found a lower price.
- Their needs have changed.
- (Drum roll please)…Wrong!
According to an in-depth study by the research firm CRMGuru, the reasons customers give for taking their “business down the road” are:
- Bad customer service: 74%
- Poor quality of product: 32%
- Pricing: 25%
- Functionality/Needs change: 15%
As you can see, when it comes to keeping your existing customers, customer service is three times more important than price–and five times more important than functionality. Which obviously means that if you want to keep the customers you’ve got, you should think about reversing priorities and pay more attention to customer service and quality – and, consequently, less attention to functionality and price. I fully realize that this runs contrary to 90% of what most people think is important, probably because price and functionality can play a large role in new customer acquisition.
Yet, many marketing plans are so focused on customer acquisition that they largely ignore customer retention, especially in the funeral business because it’s long-term. Even a tiny change in customer retention can have a large effect on long-term profitability and growth. This shouldn’t be underestimated. The easiest way to grow your customers is not to lose them. In fact, I recently read that 96 percent of dissatisfied customers never complain. They just take their business to one of your competitors, and the unfortunate thing is that you’ll never know why. Even if you did nothing wrong, you might have simply lost touch.
Want to get an edge over your competitors? With a little attention, your business can be one of those which can negate churn and improve profitability. Here’s a list of the five strategies (only limited by space) you can use to improve customer retention.
Keep them on your radar screen
So many companies do an excellent job of making the initial sale, then start chasing other prospects and in the process forget about their current customer…ignore may be the case as well…or they just get complacent. To make sure that future referrals and repeat business materialize from this customer, it’s important to make sure that you demonstrate by your actions that you really care and that everyone who has done business with you has made the right decision. This can be accomplished by putting a plan in place to communicate with them, and sell to them again and again, constantly proving that your firm was the right choice.
Build engaging relationships
With CRM programs all the rage, coupled with Big Data and predictive analytics providing marketers with in depth customer insights, the key to engagement is through personalization. In fact, as consumers ourselves, we expect and demand that companies personalize messaging and offers so they’re relevant to our wants and needs. You can do this by providing clients with ongoing communications that are personalized to them. Send them reminders, or offers or information that they’ll like at the right time based on when they might need your product or services. Do some A/B testing in order to see what catches the attention of your customers. And, even recommend products to them. Offers, timing and product recommendations all show that you know and care about your clients.
Share useful content/information
Customers buy from people. They buy based on trust. Building trust with new customers is the key to getting them to buy in the first place. And maintaining and strengthening that trust is the key to keeping your customer over the long term, improving customer retention. In today’s marketplace, it’s not enough to have a wonderful product or service, you also have to help educate your customers on how they can use your product or service better. Content must abide by three criteria: it must be expected, valuable and relevant.
Going back to your own personal experience for a minute, what is your impression of a company that, out-of-blue, gives you something you could use….for no cost. Not as an incentive or ulterior motive to purchase or do something else, but rather “just because.” It probably left you feeling good about the company, maybe even made you happy. Using the element of surprise to your advantage is a good thing because people naturally remember when something surprised them in a good way. You see, winning customers over starts with winning their thanks on individual terms. And while technology allows you to offer up this surprise to whatever scale you want, the fact is people remember acts of kindness when it feels personal.
Provide Proactive Customer Service
Of course, if you’re a funeral provider, you certainly offer the highest degree of hands-on care, right? Or if you’re a supplier, customer support is paramount, right again? But are you also being proactive with them? Being proactive, or anticipating what the customer might need or addressing problems before they happen is both unexpected and greatly appreciated. This could be as simple as calling and asking if everything is OK before the client calls you to say something is not. Or letting them know that the product they recently bought is being redesigned and will look different or is going to be sold in bulk versus single-product purchases. And lastly, there’s nothing like hearing from the customers themselves. Some sort of a feedback system, such as a survey or speaking directly with your loyal customers, shows them that you really care about their recent experience with your company and will help identify any issues to address.
Think Long-Term Relationships
For funeral providers especially, once a family has made arrangements, or purchased a plot, or completed a memorial service, this should be only the beginning of your relationship, not the end. Too many cemeteries and funeral homes are too quick to move on to the next piece of business instead of “farming” old customers, keeping up their databases, and staying in touch year-after-year with the family. Don’t dare let this happen to you! Out of sight should never mean out of mind, where past business is concerned. Make calls, send letters, send informational emails, and let the family know that your care is ongoing (as it should be). And the same holds true to suppliers to the industry as well if you expect to be around next decade and beyond: your past customer is your best next customer.
Regardless of what you’re selling, your long-term profitability is largely dependent upon your ability to keep current customers, compared to acquiring new ones. While you must always try things to attract new customers to your business, don’t take for granted those who are already in your camp and are supporting your business. Don’t forget, every now and then, to “dance with dem dat brung ya.”
Dan Katz is president, creative director of LA ads. To discuss your thoughts with Dan on this blog or any marketing matters, email via this link, or visit www.LAadsMarketing.com. You can also connect with Dan on LinkedIn. See agency work via this link.