The cost of obtaining a new client is 5 – 7 times more expensive, time consuming and energy sucking than the cost of maintaining the same client.
In light of this why do sellers spend most of their time flitting around and consuming enormous sums of time and energy in search of the next client or customer? Could it be that sellers don’t understand the lifetime value of an existing customer or they don’t have a client retention strategy or is it because those who manage them don’t teach them how important client retention really is? Maybe it’s a combination of all three of these.
Regardless of why it is critical in today’s New Economy that sellers go the extra mile and put forth the effort to keep valuable clients and customers because client acquisition is only going to become more difficult, more costly and more time consuming.
Assuming you buy into the importance of client retention here are some thoughts that will help you increase the lifetime value of clients by keeping them in your corral longer.
Nothing beats a face to face, press the flesh strategy. If you are to increase client retention you must spend more time in the presence of your customers and clients. No amount of emails, advertising, no quantity of printed matter, or new technology or media regardless of how sophisticated it is will be as effective as an in person visit. That never changes regardless of the economy. This is a lesson that most sellers have either forgotten or never learned. Five face to face minutes trumps five years of stuff sent over airwaves, through web sites and through the mail. Every seller should think long and hard about this. Yes, it is nice to do business long distance with technology, but your bond with even your best customers is weak and fragile if this is all you do. If you insist on doing this your weakness will be exposed at some point and your business will suffer – most likely when there is a downturn in the economy such as we are seeing now.
You and I and everyone else are in the relationship business.
Contrary to what you may think you are not in the business of selling products and services. You are to quote Theodore Levitt of Harvard, “in the business of acquiring and keeping customers.” And the way you do that is by connecting with people at the human level.
Quite frankly, products and services are simply commodities. Regardless of what propaganda your company’s marketing department may put out there is not a nickel’s worth of difference between what you sell and what your competitors sell. Even if you have an exclusive whiz bang thing-a-ma-gig someone will figure out a way to knock it off within a short period of time and chances are they will offer it to the marketplace cheaper than you.
The one thing that cannot be duplicated or knocked off is your relationship with your customers. Focus your time and energy developing quality relationships with your most valuable customers. I promise you that you will be glad you did.