Did you know that it costs five times more to acquire a new customer than to retain one? Yet most companies spend the majority of their marketing dollars on finding new customers instead of nurturing the ones they have. Why is this?
Retention Starts Early
Most people don’t think about retention until they are about to lose a customer—and this is their big mistake. They’re too late. In order to build an effective and sustainable retention program for your business, you need to start at the beginning of the customer life cycle—not at the end.
Retention starts at or before the point-of-sale. The marketing messages a customer sees and the conversation they have with Sales sets the initial expectations for the product or service. Once the customer makes a purchase, it is critical that the Product and Fulfillment experience delivers on the core value propositions set by Marketing and Sales. By the time a customer interacts with Customer Service, they are well along their way to either being retained—or not.
Retention is dependent on a customer’s entire journey with your company, and whether you are delivering the value they anticipate based on expectations set early in their life cycle.
Likewise, do you know what separates the most successful companies from the rest? Again, the answer is Retention. Companies with high retention like Facebook and Instagram, Amazon, and Walmart have the highest valuations because their customer base is loyal, continuing to come back again and again. Their ability to retain their customers not only scales revenue, but bolsters their reputation and sends their valuation skyrocketing.
Have a Retention Mindset
Have a Retention mindset. Every department in your organization and every interaction with a customer or potential customer prospect is part of the retention journey. You are a critical piece in the retention puzzle and your work and interactions with customers lead to the end result of a retained or “churned” customer.
Brian Balfour, the former VP of Growth at HubSpot, says, “Retention is the core of your growth model.” That means in order to have a successful retention program, everyone needs to have a retention mindset. From Marketing to Sales, Product to Fulfillment, and Customer Service, everyone needs to work together to deliver a quality and cohesive customer experience.
Want to learn more?
We recently hosted a webinar which featured myself and Matt Tennison talking about retention, and how to use retention tactics to improve your business. To watch the recorded webinar, click here. To sign up for our next webinar, click here.
