What's Your Retention Rate Look Like?

Has the economy had an impact on the quality of your customer retention program? If the answer to this question is “what retention program” you may be in for some costly surprises.

With a downturn in the economy many companies have been forced to cut costs and in many cases freeze spending all together. Most departments are typically effected and expected to do more with less. Especially Sales!

When revenues are bleeding, CFO’s seem to always pay “high radar” attention to funnel conversion rates and the anticipated revenue forecasted. CFO’s inherently emphasize the bottom line, with the bottom line being how much new business is being generated. As a result, costs associated to bring on new customers are expected. While, conversely, costs to gauge existing customer satisfaction and maximize retention rates are, in cases, lower on the budget.

Revenue is revenue, regardless of where it comes from. In fact, in downturns it is critical to invest in insuring satisfaction and loyalty with existing customers
for the following reasons:

1) New Customer acquisition can cost five times more than satisfying and retaining existing clients.
2) A 2% increase in customer retention has the same effect on profits as cutting costs by 10%
3) The average company loses 10% of its customer base every year.
4) A 5% reduction in customer defection rate can increase profits by 25-125% depending on the industry.
5) The customer profitability rate tends to increase over the life of a retained customer.

Needless to say, but I’ll say it anyway…,we all know how difficult and expensive it is to win customers back! Having a proactive approach and process www.attivio.com to minimize defection rates and monitor customer behavior (detect dissatisfaction) goes a long way to keeping your most valued customers on board.

Here are the tools:

CRM….Call Support Centers….Blogs and News….Web Analytics…Social Media…
Surveys….User Groups/ Product Councils…...Internal Reports…..ERP Systems >>>
All lead to the Customer!

These tools should provide:

 Every interactive representative with a documented deep understanding of the customer at every touch point
 A deep mined profile of the customer to avoid uncertainty of the customer at all levels
 Each representative armed with decision support and knowledge base so they are able to implement “A level” service support and performance

The key is to primarily provide timely insight into the customer during each interaction and to maximize satisfaction through all internal levels and media outlets. In a high performance system, additional business opportunities are uncovered fostering up-selling and cross-selling solutions to a “long term” satisfied customer. CFO’s like this kind of revenue!