Does that sound about right?
What about customer retention?
How much time do you spend on customer retention?
My guess is not that much, as you spend a majority of your time on customer acquisition.
Why is that?
Habit. Or you feel that is the only way to grow your small business.
When you have a moment check out this blog post that is absolutely dynamite that talks about customer retention and why you should pay more attention to it. The information may surprise you.
What is a customer retention plan and why is it so darn important?
- So, why should you continue on and read all of what I have to say on this matter?
Simple. I am going to answer that question for you regarding what is a customer retention plan and why it’s so freaking important.
Sound like a plan?
Then, let’s roll.
What is a customer retention plan and why is it important?
Want to know the answer to that question?
Of course you do, but you’ll have to be patient my friend.
Hang in there with me okay.
First, let’s go over some statistical data that supports why customer retention should not be overlooked as a business owner (Even though most of you do not focus on it).
- Per Bain & Co a 10% increase in customer retention levels result in a 30% increase in the value of the company.
Think about that for a second. On the face of it 10% is not a large number, but if you increase your customer retention by that number, you’ll increase the value of your company by 30%.
Wait a minute.
Did you say 30%?
Absolutely, yes sir I did.
You mean to tell me I can get a 30% increase in the value of my company by increasing customer retention by only 10%?
Sign me up.
That is a NO-BRAINER!
Let’s move along shall we?
- According to the White House Office of Consumer Affairs it is 6-7 times more costly to attract a new customer than it is to retain an existing customer.
What are your thoughts on that statistic?
Self-explanatory wouldn’t you say?
I will say this. If that statistic does not convince you that you need to focus on customer retention, then I suggest you lock your doors to your business and never come back.
Or do not renew your domain name when it expires – if your business is exclusively online.
Catch my drift?
[tweet_box design=”default” float=”none”]You should focus on customer retention, not customer acquisition.[/tweet_box]
- A 2% increase in customer retention has the same effect as decreasing costs by 10%. From the book, Leading on The Edge of Chaos.
I don’t care what your revenue is for this year that is a substantial number for any small business (meaning the 10% reduction in costs).
So, you can decrease your costs by 10% if you increase customer retention by 2%?
Yes, you’re correct my friend.
Wow. That’s unbelievable.
How easy is it for you to make that happen?
Piece of cake right?
- Repeat customers spend 67% more & have larger transactions as noted by Bain & Co
What do you think about that?
Awesome information isn’t it?
What makes that possible?
Your existing customers already know that you, your product/service help them solve their problems and/or satisfy their needs and wants.
That’s all there is to it my fellow small business owner.
That is the reason why your current customers spend a lot more and their transactions are larger.
Are you picking up what I am putting down?
- Loyal customers are worth up to 10 times as much as their first purchase.
If you’re not working on creating loyal customers, then you’re missing the boat my friend. They’re worth so much more to you and your small business, so you better make them feel special and take care of them.
So, now that we have gone through some pretty compelling statistics on customer retention, your wheels better be turning as to how you’re going to construct your customer retention plan, rather than a customer acquisition plan.
What is a customer retention plan?
Simply put. A plan that you have in place to make sure your existing customers stay with you and continue buying from you.
We talked about the secret ingredient in customer retention in a previous blog post that you should spend a few minutes reading. It is definitely worth your time.
This can help you construct a customer retention plan for your small business that will allow you to keep your existing customers.
You know how important that is don’t you?
So, I encourage you to spend a little more time developing your customer retention plan and then executing that plan.
The proof is in the pudding.
The statistics we discussed here today says it all.
Don’t you think?
No question about it.
Don’t delay. Get after it right now. You won’t be sorry.
That will wrap up what is a customer retention plan and why it is important for your small business.
One last thing before we go. Be sure to focus on customer retention rather than on customer acquisition.
Reason being is that your competition is focusing on customer acquisition, and their existing customers are bringing their wallets to you.
So don’t end up like your competition and focus on your customer retention.
Do you have a customer acquisition process in place for your business?
Is that process working?
Is that process efficient?
Is that process cost-effective for your business?
If you could improve that process would you?
Do you need help in figuring out which parts of your process should stay or go?
If you’re answering “Yes” to all of these questions then my hats off to you. Business must be awesome!
Otherwise you and I should talk. Let’s see how I can get you to where you want to be.