Dipple column: Keep what you have, grow what you've got
What I have found in the real world of business is that most underestimate the need to satisfy and retain customers. Most businesses, especially small ones, put too much money, time and effort into chasing new customers/prospects and far too little resources trying to keep their current ones.
We all know you can’t fill up a bucket if you don’t plug the leaks. Real profits and stable revenue streams come from long-term relationships and repeat business with your current loyal, profitable customers. Some experts declare that 80 percent of a company’s future growth comes from existing clients, if served and cultivated properly. As such, customer satisfaction and retention should be your top priority.
The purpose of your business is to attract and retain customers. You can’t grow and remain in business without keeping the customers you currently have.
First, you must measure your current attrition rate (loss of customers) and set a goal to dramatically reduce this rate. For example, if you lose 15 percent of your customers every year, a realistic goal would be to reduce this to less than 4 percent. It is easier and nearly eight times cheaper to serve and retain clients/customers than to pursue new ones.
Once you have plugged the holes in your attrition bucket, you want to serve these profitable and worthy customers better. You want to better understand their needs and then fulfill as many of them as possible with additional products and services. Continually communicate with your customers. Give them value and solutions by focusing on them and their needs, not on your products/services: “Customers do things for their reasons not yours.”
Communicate in person, by letters, faxes, e-mails, via your Web site, newsletters, etc. You can’t over-communicate with customers. In fact, poor communication or lack of communications is the No. 1 problem in business (and for that matter in your personal life) today.
Repeatedly ask your customers:
“How are we doing?”
“What other needs do you have?”
“How could we improve our value to you?”
Your objective is to provide your customers with more value more frequently. Never sell a customer only once since real profits come from repeat business. So, set goals to increase the frequency and size of your repeat business. You want ongoing long-term relationships and ongoing sales, day after day, month over month and year after year.
Contact Mark Dipple at firstname.lastname@example.org.