Strategizing Customer Retention
By Laura Bernstein
The best companies and the best entrepreneurs know all too well that retention is a key component of a successful business. If we make an analogy to any team sport, we quickly recognize that to win we need a solid offense as well as a solid defense. But somehow, when we think about business, a solid defense almost immediately becomes less important. If we are asked in conversation, we acknowledge its importance but how many of us have an actual strategy and the tactics in place to execute the strategy?
In reflecting back on conversations with agents about retention, the general feeling seems to be that the carrier contract secures their revenue and it works well enough. But does it? It is for sure a stopgap, but of course the contracts do expire and the customer is once again free to look elsewhere if their needs have not been met.
Customer retention is a strategy — even a science — of its own. One tactic that can be used in executing a retention strategy is calling a sampling of your customers.
Start with a complete list of your base, then divide that base into groups by the length of time they have been customers. Each group has a different overall mind set and should be addressed individually. Put together a short list of questions for each group that will elicit the key information you want.
Questions can be asked to solicit information such as:
- Are you planning to renew with us?
- Would you refer us to others?
Questions can also be asked to show concern for the quality of their experience such as:
- What would make it easier to work with us?
- What can we do to provide more value?
Once the information gathered and reviewed, an action plan is created so that the data is transformed into measurable outcomes that drive revenue. This is critical.
We have all heard the saying, “It costs more to acquire a new account than it does to keep an old one." Let’s be honest, do we know how much more? If we believe this saying is true then what stops us from allocating resources for our defensive strategy so we don’t lose our customers?
Laura Bernstein is the president and co-founder of CRA Inc .,a Massachusetts-based national network telecom management company formed in 1999 to provide SMBs with proactive monthly auditing, network change facilitation and contract negotiations. She is also on the board of trustees for the Technology Channel Association (TCA).