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There’s a lot of emphasis on making sales, increasing revenue in the business world. However, a crucial aspect (and arguably more important) key to business success is retaining your clients. Granted, new customers are key to the success and growth of your business. But smart business owners realize the importance of retaining existing clients as they offer huge potential for continuous revenue.
According to the Harvard Business Review, selling to a new client costs on an average 25 times more than to an existing client. It’s more expensive to acquire new clients than it is to keep an existing one. In fact, long-term customers provide more value than a single-deal client. Keeping customers for the long haul provides a solid foundation of revenue that has created incredible wealth for businesses.
Existing customers have already done business with you, so there’s a measure of trust and unless they had a bad experience, they will most likely buy from you again. You’ve gained their trust, and inspired confidence in your product or services, and better still you can even predict their buying behaviour. This is where the ‘building relationship’ (farming) over the long-haul becomes beneficial. A single-deal client doesn’t necessary require you to build relationship with them, often times it’s simply transactional (hunting). Furthermore, retaining existing clients will mean lesser expense, as you will spend less effort and time finding new customers.
Moreover, selling to existing customers is less focused on price, because of your previous dealing with them, it becomes easier to upsell some of your other products and services to them. According to Gartner Group statistics “more than 80% of an organization’s future revenue comes from just 20% of its existing customers.”Increasing your company’s customer retention by a mere 5% has the potential of increasing profitability by 75%!
How then can you retain your existing client and increase revenue?
Learn to solve more problems! Your focus shouldn’t just be on always getting new customers. Look into different practical ways you can help your current customers to solve more problems. Asking them ‘how else can I help you?’ will be vital in uncovering more problems leading to more opportunities to increase revenue.
For example, if you are in the renovation business, and you’ve renovated their kitchen then go back to follow up on your work and then look for other problems you could solve for them, such as providing a quote to renovate their basement or another room in their home.
It’s a lot easier to solve more problems with an existing customer than finding a new one. Relationship have already been established, they trust you, and they’ve seen, have proof of what you can do. Try as much as possible to learn about problems customers want to solve and then use this insight to your advantage by providing the needed solutions. Remember that no product or service is in itself excellent, it only becomes excellent if it solves or fulfills a customer’s need and it can only accomplish that by creating an image of solution that the customer can visualize.
The most successful businesses are the ones who are able to decipher pressing customer needs and take appropriate steps to solve them in a way that’s cost effective, convenient and timely. Think about it from this perspective; how difficult would it be to sell relief with medication to someone experiencing a headache? Customers will spend more money on a cure verses prevention – the cure is the solution to a problem. The truth is that once you are able to find solutions to your customer’s pressing problems, they will be more than willing to pay for it.
Your customers need to know what you can do for them and how they can save money and time by utilizing your solutions. They are not overly interested in hearing a list of your products and services, instead they want to hear more about how you will be able to solve their problems. To keep your existing customers, find their most pressing problems and make sure you’re uniquely qualified to offer a solution. Even in cases where the client’s problem cannot be remedied by your immediate product or service, you can still create an amazing customer experience by suggesting an alternative solution even if it is referring to someone else.
The Bottom Line
The customer retention vs. acquisition debate will continue to be argued among business experts. Ultimately, providing immediate solutions to a customer’s problems builds positive brand interaction, credibility as an expert in your industry, and supports continuing customer research and discovery into additional product add-ons, purchases, or upgrades.
Positive customer interactions with strong service and support build a stronger brand, with increased customer loyalty and in the long run more revenue across channels. Be known as a problem solver, that’s why you are in business in the first place.
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About the author: Kyle Kalloois the Chief Executive Officer, Business Coach with Change My Life Coachingand Change My Business Coaching. Through his management training and experience with McDonalds, Famous Players (Paramount) and WestJet, and all of the ongoing learning and development he’s completed, Kyle has refined and perfected skills and processes and is eager to share how to execute them efficiently to help individuals and companies achieve even more of their dreams. 83% of Kyle’s business comes from referrals. https://www.changemylifecoaching.ca and https://www.changemybusinesscoaching.ca