In the last post, we talked about some of the actual costs of replacing customers that you’ve lost, rather than keeping the ones that you already have, the possibility that there may be no replacements, the cost of recruiting new customers, and the time required before they become profitable.
Well, as you may have suspected, the real costs of relying on a customer replacement strategy rather than customer retention strategies a go beyond what we’ve already discussed. Consider this: A customer who you already have, one who is familiar with your store, with your products, and with your services, and who is in the habit of coming to your store when the time comes to buy something – that customer is an investment. You’ve already put time and money into that customer – possibly considerable time, and more than a little bit of money. Do you really want to throw that investment away, just so you can go through the same process all over again with a stranger?
When you lose an existing customer, you lose all of the recommendations, all of the referrals which that customer might have made – but will never make now. And you lose all of the referrals and recommendations that might have come from that lost customer’s positive word of mouth. That’s an entire chain of goodwill and good recommendations, gone in an instant.
There are things worse than lost referrals and recommendations – like negative referrals and recommendations. An unhappy customer is going to talk, and is probably going to make his or her unhappiness known. When the time comes to recommend a store, there’s a good chance that an unhappy customer will recommend not going into your store. At that point, you haven’t just lost your investment – you’re in the hole.
Lost referrals and bad word of mouth can lead to a shrinking customer base, even while you’re trying to recruit new customers, and build that base back up. That can lead to lost revenues, layoffs, closing stores, and loss of resources, just when you need them to build your customer base back up.
But it doesn’t need to be like that. If you can measure customer satisfaction and respond to customer needs in a positive way, you can keep your existing customer base, and turn those losses into gains: New referrals, good word-of-mouth, and gaining ground, rather than losing it. The ASK-LISTEN-RETAIN system combines customer satisfaction feedback , automatic notification of managers, and manager accountability when it comes to the kind of positive response that engages customers – and keeps them on your side.
If you would like to know more about how the ASK LISTEN RETAIN System or how it can help create customer retention and loyalty, please contact us.