The survival of any company is based not on how many new customers come through the door, but on its ability to retain existing customers.
The strategy for customer retention is called Customer Relationship Management (CRM).
Many large companies develop sophisticated CRM strategies, but you needn’t think like a big business to acquire a potent strategy. Think like a consumer instead.
While product innovation is important and price is always an issue, research shows that most people split for the competition because they didn’t like the way they were treated.
That means poor customer service. I would argue (not too stridently mind you, because my head is still delicate from an excess of holiday cheer) that bad communication is at the heart of the loss of loyal customers, or churn as we call it.
Businesses don’t have to offer all kinds of crazy stuff to keep their customers from churning. They just need to communicate to them wisely. When they mess up, they’ll find that hell hath no fury like a customer scorned!
As a consumer yourself, no doubt you’ve received an email or letter from your telecom company that has tried to upsell you to services you already subscribe to. How does that make you feel? That the company doesn’t even care enough about your business to find out what services they are already gouging you for, that’s what!
You’re now a ripe candidate for churn.
What kind of customer service might take you the other way?
Dear Mr. Brown
We note that you currently have your TV, Internet and phone services with us. This letter is to advise you that we have adjusted our monthly price to you so you can benefit from a bundling of these services. You save $3.77 per month. Thank you for being our customer.
Instant loyalty. And they bought it for less than $50 a year, which is going to be way cheaper than what they are investing in getting another telecom’s customer to switch.
That’s smart CRM.