The impact of one bad experience can be detrimental to a business and can even lead to customer churn.
For companies that need renewals and repeat customers for growth—that’s most of you—a single client interaction can have massive ripple effects for your bottom line.
Take for instance, an experience our Founder and CEO, Ali Cudby, had at one of her favorite stores. When asked to see a pair of shoes, a sales person dismissed her after abruptly saying “here you go,” handing her the box, and then walked away—not asking her if she needed any more assistance or stayed to see if she liked the product. This single moment of lackluster service turned her away from purchasing the shoes that day. It also made her think twice about going back to that store again. The company that had been a past favorite lost out on her current and future revenue.
Shoes may seem like a trivial example, but the simplicity underscores the ubiquity. Whether a purchase is big or small, consumer-driven or business-to-business, the way people feel as customers has a direct impact on current and future buying behavior.
Customer retention and customer churn are inversely related. When customers are happy, you keep your customers – that’s retention. Conversely, when customers become unhappy and leave, that’s customer churn. Companies, clearly, should aim for higher levels of retention and lower rates of churn.
So, what are the keys for customer retention? If you’re interested in learning about the three keys to retaining your customers—even after a mistake was made—read on.
Why is customer retention important?
According to an American Express survey, unhappy customers tell a lot more people about their bad experiences than their good ones. Worse, once you provide a negative experience to a customer, you need a whopping 12 positive experiences to win them back.
If that customer even gives you another chance.
Let’s be real here. No matter what our professional roles, we’re also consumers. And we’ve all had bad experiences as customers. Unless a company does something to make their flub right—and quickly—are you willing to give a company 12 more chances to win you back?
Probably not. There are too many other buying options—at every price range. The days when consumers were limited to their Main Street offerings are long gone.
As a business leader, you need to jump in to fix the problem immediately to promote positive customer relations and to have any hope of saving an unhappy customer.
But first, you need to know when customers are unhappy. Most of the time, you don’t because they won’t tell you. (But they will tell their friends.)
Fortunately, there are ways to stop the tide of negative commentary when you have the right customer outreach plan in place. Let’s look at three ways companies can recover to retain long-term customers.
What are the ways to retain customers?
Sometimes customers who have had their complaints resolved well can become your most loyal allies. In fact, an overwhelming 83% of customers agree that they feel more loyal to a brand that responds and resolves their complaints.
Mistakes will happen in your business—the steps you take after there’s an issue are what separates the winners from the companies whose customers tweet and write posts about their negative experiences.
Here are the three keys to saving unhappy customers:
Make customer retention rate a priority
It may seem obvious, but unless you address the issue specifically with your team, they will focus on the outcomes that are best for them, not the customer. Employees can go for the short-term win instead of the long-term value of a customer. Until you are clear and consistent about your objectives, you let employees decide what is most important for your customers’ experience.
Once your objectives are clear, how are you going to manage them? You and your employees own different pieces of the execution phase. You must have playbooks outlining the steps employees should take with customers so they deliver aligned and consistent experience. Back those playbooks with tracking and metrics so you can both learn what’s working and reward employees for their execution of the plays. The responsibility to enforce the playbooks will show you mean business as a leader, and having objective and specific outcomes will make it easier for everyone to successfully follow your lead.
Monitor customer engagement
You may not know if every customer is unhappy, but even small businesses can put systems in place to catch issues before they become problems. When you consider the value of a long-term customer vs. the impact of customer churn, it’s worth time and effort to monitor how folks feel about your business.
And then what? What would you do if you found out about an unhappy customer who had a bad experience in your business?
Knowing the exact answer to those questions can be the difference between saving a customer and losing them for life.
Craft your plan to win customers and keep them for the long term—beginning with a conversation to define your company’s unique path to growth.
Retaining customers does not have to be hard, with Alignment (and Alignmint)
Align your customer experience for long-term success with Alignmint Growth Strategies. We focus on simple, consistently actionable strategies and tactics. Give your team a clear path to a customer-centric experience that will promote engaged, loyal customers and eliminate avoidable churn. Book a call today.