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Customer Retention Cheaper Than Customer Acquisition, Companies Say

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Customer Retention Cheaper Than Customer Acquisition, Companies Say

January 13, 2016

  By Michelle Amodio, TMCnet Contributor

Customer churn is a key component to running a business, but one that companies feel they could use less of. Churn refers to customers who cease relationships with businesses, and yes, these customers can crush revenue. While getting new customers is an obviously good thing, many businesses often forget about an important, and potentially bigger positive: keeping the current customers. This isn’t just a business platitude; it’s common knowledge. Some 82 percent of companies agree that keeping a customer is cheaper than acquiring new ones, according to Econsultancy's 2014 "Cross-Channel Marketing" report.

So, how does one go about keeping the customers they have happy, and more than that, around for the long run?

Clients will come and go; it’s a natural part of business. How you manage the amount of clients that leave, and attract new clients to your business, will determine whether or not your business survives.

Churn is a beguiling problem. There’s tons of reasons why your customers could be churning. In order to strike at the root causes of churn, you have to break it down into smaller, manageable pieces.

Stay in touch.

Once you’ve onboarded your customer and got them up and running, it can be easy to leave the rest of up to them; the old set it and forget it attitude. For retaining customers, it is essential to keep a feedback and communication loop. Think newsletters, webinars, and other points of contact.

Listen. Always listen.

Make sure customers feel they are being heard. If they have feedback on your product or service, is there an outlet for that? Do they know what email address they can use to request a new feature? Report a bug? Ask a question?

Strive for improvement, always.

Whatever you’re offering, make sure you don’t stay stagnant. As you continue to add value, your product or service will become more attractive to your customers.

The customer experience that generates positive reviews and brand loyalty today delivers accurate, relevant and personalized information on an individual basis and reduces churn. Implementing a truly all-inclusive customer experience for reduction in churn is critical. Integrating everything from online support to tracking customer interaction has proven to be successful and is not just good customer service, but common sense. Forming and maintaining relationships with customers is one of the most important aspects of running a business. Without happy customers, it’s hard to thrive in any industry and long-term success can be jeopardized. Don’t just seek to acquire new customers; keep the ones you have happy, too.

Edited by Maurice Nagle
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