Many businesses speak about the importance of customer service, but in practice, creating true loyalty often takes a back seat to gaining new customers. Customer loyalty should be prioritized over customer acquisition, however, as the facts overwhelmingly demonstrate.
It costs five times more to attract new customers than to keep existing ones satisfied. Furthermore, it is a staggering 16 times as costly to build a long-term business relationship with a new customer as it is to cultivate the loyalty of an existing customer.
Businesses with sustained customer loyalty have employees at all levels who understand that everyone is responsible for business development and customer retention, not just those with sales, manager, or customer service titles. Know that your best customer is someone else’s best prospect. You simply cannot take good customers for granted.
Here are a few ideas to develop stronger, sustained customer loyalty and generate referrals to your business:
- Consistently train all employees to understand their unique impact on customers, even if they do not have direct customer interaction. Conduct meetings where everyone shares their experiences as consumers with other companies in outside industries. Ask what they classify as great customer service compared to poor customer service. You will see people discuss everything from how companies answer the phone to how employees handle an issue even if it is not in their direct job responsibility. Then ask THEM how the company could improve the overall customer experience based on their current role.
- Open a dialogue and allow employees to offer ideas. Often, employees have good ideas on how to save money, retain more customers, and increase sales, but are never asked directly for their feedback.
- Be proactive and encourage employee engagement with customers. You need to help solve your customers’ problems and eliminate any opportunities for your competitors to come in and offer alternative solutions. Don’t just take an order…ask some questions. Customers may not realize what else they need or what else your company offers in terms of products and services.
- Things go wrong. When they do, reach out to your customers. Some will not call and complain. They will eventually just go away. Many loyal customers will forgive and forget if you reach out, apologize, and tell them how you are going to work to make things better. The mistake is thinking they do not need the call, or the apology.
- Generate referrals by asking your best customers for introductions. Many of your customers may know key decision makers at several other businesses in the same area. Only about 30 percent of loyal customers would proactively send referrals even if they were extremely satisfied. But up to 70 percent would consider it if YOU ASKED. Here’s how:
Recognize they are a valued customer.
- “I appreciate you being a loyal and long-term customer and we want to grow our business with other customers just like you.”
- Give them a few trigger ideas on what type of customer you are looking for: “Who else do you know in the area that you may be able to introduce me to?”
- When they agree, offer to send them an email to make the connection. “I know you’re busy, so I’ll just send you a brief email about what we do and you can forward the introduction to the prospect to connect us. How does that sound?”
- When you get a referral, send something. Ask new customers how they heard about you. A small thank you gift, a coupon, or even a hand-written note can make a big difference and help you continue to build your business and attract loyal customers.
The correlation between industry leadership in nearly every vertical and customer service is strong. Advocate for the customer. Speak for the customer in the office, and build your business on doing right by the customer. Like most businesses that seriously commit to customer service, you will find a return on investment that speaks for itself.
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