5 Ways To Minimize Customer Churn Rate
Many companies have experienced losses of market share recently due to the shift in business from the pandemic impact. The demand for product in many sectors has dwindled down by more than 50%, and in others that are faring a little better, the loss has been less dramatic, but still painful. While there are some sectors that are actually increasing, such as Zoom and other online meeting companies, the fact is that it is more important than ever to make the necessary efforts to retain customers while demand rebuilds.
We have learned the hard way about the negative impact losing customers has had on our company as well as many of our clients in the supply chain and manufacturing market segments. Several studies over the last few years have shown that on average it takes 5–7 times more effort and investment to acquire a new customer than it does to keep the current customer base happy. Often, we have found, that because of this companies often overlook the customer needs and lack of engagement while new customers are pursued.
There was a time when that used to be somewhat acceptable. Now, however, even before the pandemic impact, customers are demanding and expecting much more from their suppliers and will continue to do so.
What does it take now to keep them happy?
Here are 5 of the ways that we have employed, and encouraged our customers to use, to maintain a healthy customer base and continue to grow market share.
Customer Success Must Be A Company Wide Top Down Mindset
First and foremost, just having excellent customer support is no longer sufficient to keep customers happy. Customers have grown in knowledge and understanding about their marketplace and now demand an experience beyond just a support ticket and maybe being able to get on a call with a support rep. They are looking for more of a partnership and an investment in their success by using the products and services of their suppliers.
To accommodate this shift in mindset, it will require an equal or greater shift in the mindset of the suppliers as well. That’s why it takes a top down, companywide attitude, commitment, and dedication to ensure that the customer has the best possible experience. It can no longer be that just the customer support department is charged with keeping the customer happy. It must come from the top and pervade the entire organization in order to be successful.
Attract The Right Customers
A companywide dedication to a stellar customer experience is a solid first step, but what happens from there? It is imperative that we attract the right customers to acquire. To be ultimately successful, most companies need to focus on offering products and services that they feel are best in class and a part of their nature, their DNA so to speak.
That’s not to say that multiple markets can’t be successfully penetrated, but the primary focus should be on those where the proper investment and commitment can be made. As an example of what won’t work, for instance, is a software reseller that offers 5 different solutions, but has not made the investment to ensure success in each one and has spread themselves too thin to be effective.
Relentlessly Improve Time To Value
People buy because they feel they’ll get superior value from their purchase. While customers often don’t expect value immediately (other than things like a favorite candy bar or a delicious rack of ribs) they do expect to receive value in a reasonable time frame for their market. If the customer hasn’t seen the value they expect by the time they are ready to consider another purchase, they’ll be less likely to buy again. Customers continue to buy products and services because the believe the value will far exceed the cost.
For supply chain and manufacturing companies, this means an ever-present commitment to improve delivery time, production time, superior product quality, and outstanding customer service at all times.
Offer Well Designed Products And An Excellent Customer Experience
They key to customer retention and satisfaction is a well-designed product combined with a best-in-class customer experience. Consumer technology and information availability has changed the ways companies need to do business as well as customer expectations. The velocity of information, product availability and response time requires a laser focus on product ease of use, quality, and the ability to get it in the customer hands.
But it goes beyond that, too. An emphasis on a client engagement framework and a solid and clear feedback loop is essential to receiving customer improvement suggestions and informing them of product and service improvements, simulating more customer interaction and renew purchases. One thing is now certain… even if you are not making the necessary adjustments, the competition will.
Engage, Engage, Engage In Proactive Interactions
Customers and suppliers always start off together, like a couple of new friends walking in the park. But all too often, as they walk along, the supplier will veer off to other sights, or in business, to procure more customers and sales, after all that is a requirement to stay in business. Over a long period of time, they can drift far apart. The secret to keeping on the same path together and avoiding the natural drift is to provide willful, proactive interaction with the client base on a comfortably consistent basis to keep them engaged.
Many companies, including a couple of our own customers, have created a customer success team to bridge the gap. This team works hand in hand with marketing and customer service to continually provide intriguing quality content, periodic offers for product or newsletters, and satisfaction surveys to name a few. It is estimated that keeping customers engaged dramatically increases many aspects of the relationships.
Some examples are that customers that stay happy provide an average of 10 times the value of the initial sale, are more likely to provide referrals to other potential customers, increase awareness by social media, as well as boost morale for the company. Everyone loves being on a team that is successfully growing the customer base.
Making these changes as a part of a new way of life can alter the direction and success of a company in a substantial way. So can neglecting to make these changes. The choice seems fairly simple, doesn’t it?
Originally published at https://www.cortekx.com on January 27, 2021.