Customer Retention in Tough Times

Economic downturns can wreak havoc on businesses. As a business owner or manager, it's important to make an honest, accurate assessment of your situation and take the necessary steps to remain healthy. Customer retention and business development are central to successful managing through a downturn.

customer retentionAs a business owner, it's my job to maintain a high-level view of the company and the status of all projects. And a big part of this is keeping an eye on customer satisfaction—you'd be surprised at how far executive involvement goes toward creating and maintaining happy clients.

Here are a few tips to help you manage your business more proactively and increase its ability to thrive and grow.

Customer Retention

Make sure your idea of superior client service is in line with your client's expectations:

  • Measure client satisfaction. Ask for feedback and critique to improve your performance and service.
  • Monitor the feedback your customers provide about your company and be prepared to respond to it. Recently, United broke a passenger's guitar through reckless baggage handling. The passenger responded with a video about the incident that has generated millions of views and unfavorable perceptions.

Maintain high-touch relationships with clients:

  • Invest in relationships with your clients.
  • Pick the most high-touch method of communicating with clients. Meet in person when possible and value phone calls over impersonal emails. A close, personal relationship might save you when your client starts looking for areas to cut costs. Despite all the technological advances, people still do business with people.

Focus on quality in your product or service:

  • Define clear success for metrics with the client and continually exceed them.
  • Promise something realistic and deliver something exceptional.
  • Train your staff and set expectations for delivering excellent service and results. Humor is an effective way to demonstrate desired behaviors as illustrated in this Customer Service Video.

Business Development

Marketing yourself:

  • Market to convince prospective customers that your product or service is a wise investment. Money is tight; market how your expertise, product or service adds value to a client.
  • Examine your marketing and business development strategies and make sure you're knowledgeable your target audience. Fully embrace the "quality over quantity" mantra.
  • Monitor your competitors' advertising and know what they're doing.

Growing your current clients:

  • It is much more cost effective to grow current clients than it is to go out and woo new ones.
  • Current clients are more profitable as working relationships are established and efficiencies recognized.

Objectively analyzing your customer retention strategy is not a simple task. However, it is an essential part of ensuring the success of your business. Successful businesses take the opportunity to emerge from challenges stronger than when they started.

Read more of Melinda Partin's Work Tank blog

Melinda PartinAs CEO and co-founder of Worktank, Melinda leads the company's strategic direction with the goal of worldwide expansion to better serve our global customer base. Her vision is central to Worktank's mission of helping clients find new and compelling ways to establish meaningful relationships with their customers.

Drawing on over a decade of interactive experience, Melinda helps companies transition from traditional marketing to Web- and interactive-based channels. Her wide-ranging background includes Fortune 500 and small- to mid-sized companies in technology, real estate, corporate housing, and telecommunications, and the non-profit sector in HIV/AIDS and hunger issues. Melinda moved to the agency side after stints with Microsoft Sidewalk and Microsoft Studios, where she pushed the edge of media technology.

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3 Comments

  • James Bampos

    “I agree. Analyzing your customer retention strategy can be tough — a lot of companies struggle with what to measure. But, if you clearly understand the drivers of loyalty within your customer base, and measure against those qualities, it becomes a whole lot easier. EMC continually measures customer loyalty and addresses the quality levers that have the biggest impact on loyalty. Next we measure customer longevity and revenue against each area. Focusing on the attributes that matter most to our customers through a measurement system provides a great mechanism that drives customer retention.”
    Jim Bampos, VP of Quality, EMC Corporation

  • Freddy Nager

    Those all sound like smart practices, even in a good economy.

    One important distinction to make is the difference between loyalty and laziness. For example, it's not the quality of service that keeps me with my Internet Service Provider (trust me, it's not). I stay with them because switching is a hassle, and I'm not sure any alternative would be much better. In other words, I know I should shop around, but for the time being I'm uttering the fatal words, "It'll do."

    Other people have this attitude with their cell phone companies, web hosting providers, colleges they attend, daily coffee shop, local politician, apartments, jobs, even significant others.

    By instituting switching costs, and not being too annoying, some companies (or people) retain their customers for longer than rationality would dictate. Inertia rules. I've elaborated on this point here, along with a few other loyalty-inducing tactics:

    “Stay!: How to Create Loyalty — or at Least Laziness"
    http://coolrulespronto.wordpre...

    For a competitor, the key to breaking that inertia and stealing those customers is to make switching as easy as possible.

  • Chad Albert

    It's actually pretty simple. Provide a kickass product and be easy to deal with. Cut the marketing bulls#$t and be straightforward. Deliver what you say you do. Your customers will love you for it.