Organisations spend a lot of resources on advertising and promotions to attract new customers. Even as they successfully do this, they may be losing their existing customers. So organisations need to pay attention to both winning customers and retaining them.
When we discuss the notion of “creating customers”, we have to start with Peter Drucker, who said it best when he stated that there is only one valid definition of a business purpose: to create a customer.
Companies are defined by the customers they create. And customers are created when they are satisfied with the product or the service. Customer satisfaction is the key to customer creation.
“Creating customers” is a strategic process. Many books have been written about customer relationship management (CRM), customer lifetime value (CLV) metrics, customer orientation, and so on.
One of the most basic approaches to customer creation is the old-fashioned one: satisfied customers influence others to buy your product or service.
In your own experience, don’t you ask a friend, relative or colleague about the quality of a product or service — it could be a new restaurant, travel destination, renovation contractor, dentist or face cream — before committing to buy it?
Recommendations are a powerful tool to create new customers. Organisations must seriously consider their existing customers as their allies in helping to create new wants. Sometimes, your satisfied customers do not even need any incentive to recommend your product to others. Just knowing that the recommendation has made someone else happy is a reward in itself!
Organisations are wise to use complaints to generate new ideas and ways to improve their product or service. Always be appreciative of the fact that customers take great effort to write, call or to come in person to make a complaint. They are probably so upset that they will make an effort to do so.
Organisations should therefore take every complaint very seriously, ensuring that they never have to deal with the same complaint twice.
Use the same approach for customers’ compliments too, using these as a point of reinforcement for what your organisation is doing right.
Conventionally, customer retention is defined as the number of customers doing business with an organisation on a continuous basis over the long-term. High retention is equivalent to low defection.
Organisations should conduct regular surveys to ask customers what aspects of their products or services they are happy or dissatisfied with. This can be done through an online survey, a phone call, in person or via e-mail.
One of the best ways is to conduct focus group interviews. Loyalty programmes too are extremely effective.
Turn them into fans
When organisations provide solutions to customers’ needs and offer good value, customers will be motivated to be loyal. The whole idea of customer retention is to make your customers fans of your organisation. Give them a memorable service experience each and every time and you will have them as your customers for life!
Make an effort to know your customers — their special needs and preferences. Know their names, their favourite colours, their special requests, their birthdays and anything that will demonstrate that you do not just see them as a customer, but a friend! This intimacy must be cultivated over time. It takes a special effort, but it is worth it!
Organisations should ensure that all their employees have the skills to handle both internal and external customers. Employees must be made to understand that in the midst of technological advances in reaching out to customers, the high-tech approach is still inferior to the high-touch approach!