If you were to evaluate your marketing budget, how much is devoted to customer retention vs. new customer acuisition? In attempts to drive up car count, many shop owners invest a good deal of their efforts and marketing dollars into prospecting and securing new customers. In the process, they forget about their best source of repeat and new business – their existing customers.
Every marketing plan should have a greater focus on customer retention than new customer acquisition. Here are a few compelling reasons to concentrate on improving the customer experience:
- According to the Gartner Group, 80% of your future profits will come from 20% of your current customers. This means you should be cultivating the relationships you have with your existinig customers.
- If you have created a solid retention program, you will receive more referrals from customers than from an advertisement or mail campaign.
- It costs much more to acquire a new customer than it takes to retain and solicit new business and referrals from existing customers. Depending on the industry group, sources estimate that it costs between 10 and 30% more to attract new customers.
- The probably of selling additional services to an exisiting customer is 60-70% while the probability of selling to a new customer is between 5 and 20% (Source: Marketing Metrics).
- A 5% reduction in the customer defection rate can increase profits by 5 – 95% (Source: Bain & Company).
- 55% of customers would pay extra to guarantee a better service (Source: Defaqto research).
The best way to improve customer retention is to improve upon the customer’s experience. Here’s how you can get to work creating a WOW Experience for your customers:
- Do Your Homework – Do you know what your customers want when it comes to customer service? If not, ask them. If courtesy transportation is important to your customer, find a way to offer that extra service.
- Create a Process – Once you know what your customers want in terms of service, create a process for delivering in a way that exceeds their expectations. Write the entire process down and place it into a manual that outlines Standard Operating Procedures.
- Identify Skills – What skills are required from your team to deliver exceptional customer service? Identify the skills needed for each job position and make those requirements part of the job descriptions.
- Invest in Training – If any of your current employees lack any of the skills identified, have them trained.
- Solicit Feedback – Continually ask customers (and employees) if you are meeting their customer service needs. If there are areas that need improvement, fix them.
“Revolve your world around the customer and more customers will revolve around you.” ~ Heather William
Need help evaluating your customer retention program? Click here to schedule your FREE 30-Minute Marketing Review with one of our marketing professionals.
