So you want to prevent customer churn? Consider these scenarios:
Picture a high-end jewelry store. Fine jewelry isn’t purchased on any regular schedule, so the business doesn’t always know when a customer wants to make a new purchase. Let’s assume this company offers an incredible in-store experience. They send occasional emails and mailers about sales or special events. But customer outreach at an individual level is left to the sales folks.
A biotech company has just landed an amazing new client. It’s a big win for the company. While the sales team is high-fiving, fellow employees responsible for servicing the client are scrambling. They heard about the sale after the fact and didn’t have time to prepare. They need information about the client to get things moving. Without clear steps for transitioning from sales to account management, client communication stalls into confusion and frustration.
In the weekly Executive Team Meeting for a SaaS company, there’s a familiar topic on the agenda – customer churn. Analysis reveals that most communication with customers occurs at one of two points. The first is customer-initiated, when there’s a problem and the customer needs help. The other primary point of engagement launches only when the company starts gearing up for renewal.
All three of these scenarios are familiar refrains, and all impact the bottom line. For the jewelry store, without a procedure for customer outreach, the business is missing out on potential revenue from customers who could be enticed to buy more quickly. For the biotech firm, rocky onboarding fails to launch new customers optimally, which means the firm is behind the curve before they even get started. And the SaaS company is watching future renewals go drip, dripping down the drain. (Yes, that’s a reference to lyrics from Hamilton, the musical…in case you were wondering.)
While numbers may differ from industry to industry, one generally accepted statistic is that improving customer retention by just 5% can improve profits by anywhere from 25% – 100%.
That’s a lot of upside potential. If you do some back-of-the-envelope math, how much additional profit does that translate into for your company?
And yet, companies consistently fall short when it comes to customer engagement, and too often don’t reach out until the customer has vocalized a problem. By then, trust has already been impacted and the relationship itself may be in jeopardy.
Let’s be clear. A lot of times, companies aren’t confused. They realize there’s a problem. But there’s a lot of real estate between understanding the problem exists and activating a solution to stop customer dissatisfaction before it leads to an exit.
So how can companies prevent a slip that can become a downhill customer slide?
There are five key steps to bolster customer retention:
1. Know the Players
One reason many companies fall short in customer engagement efforts stems from the cast of characters involved. Even in small companies, there’s rarely a single person involved in the care and feeding of a customer. First, it’s important to include all the people who will eventually be part of any engagement path.
2. Map the Process
Once you’ve assembled the players, it’s time to define the process. Create a map of the customer journey that encompasses the timeline of engagement. This map (which can be low or high tech) must articulate the who, what, when, where and why as a living system that will effectively prompt employees along the way.
3. Articulate Inspiration
Here’s where leadership drives activation. Your system needs support from the top to ensure that every person in the company understands that the organization is serious about the initiative. This is a moment to inspire the troops – because getting customer engagement right means the brightest future for your company.
4. Repeat for Adoption
No matter how inspired your leadership, true success only happens with repetition. That means consistently managing expectations to your system until it is knit into the fabric of the company.
5. Craft Unique, Personable Engagement
No matter how good the structure of your system, engagement must include genuine connection. This where most companies fall short in their efforts – they focus too much on the process and not enough on the rapport. Process matters, but it’s not sufficient. You must connect with customers as valued individuals. Companies transcend service and become iconic in the hearts and minds of customers when they develop sincere, personal interactions.
No matter how companies define their customers – B2C, B2B or any other alphabet soup configuration – creating a meaningful connection marks the difference servicing customers and cultivating deep, profitable, long-term customer relationships.