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Why being attentive to your customers pays off – in Euros

Going on the hunt for new business or focusing on existing customers? It’s a constant tension for companies, with loyal buyers often losing out. Take five minutes to read why emphasising customer retention pays off.

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As the mantra goes: put the customer first. But the question is, which customer? A lead – or that one client who has been placing regular orders for years? Common practice at many companies is for sales departments primarily to target new revenue. That existing customer? Well, they’ve been buying from us for years so that should be fine, shouldn’t it? In general, many salespeople pay too little attention to your steady, loyal buyers – with all associated risks.

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Written byEmiel Kanters

Co-founder & Account Director

The mismatch between sellers 'tactics and buyers' expectations can be solved. 67% of buyers have already done their research before contacting Sales. Establishing a relationship in that period is a game-winning tactic.

Change can be hard and uncomfortable. But when it's done with intention, it can be a beautiful force. Our journey to becoming a customer-centric organization is a testament to its own willingness to embrace change for the benefit of its people and the business.

Existing customers cost less

Customer retention is a company’s ability to hold on to customers over the longer term. Ignore this aspect and you miss an opportunity. It’s still five to seven times more efficient to keep an existing customer than to recruit a new one. Although said many times before, it’s worth mentioning one more time. 

One explanation for this huge difference lies in the cost of the marketing and sales effort needed to recruit a new customer. And because you know what an existing customer has bought before, it’s much easier to dish them up a tailor-made offer. The conversion rates for upselling are demonstrably higher than for standard marketing campaigns to recruit new customers. Quite odd, therefore, that so many companies devote significantly more energy to acquiring new business while their existing customers still offer so much opportunity.

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Poor service is killing

Claiming to be service-oriented is easy. Putting it into practice is a lot more complicated. Some years ago, the Rockefeller Corporation researched customers’ reasons for dropping a company. Take a moment to reflect on the results. By far most customers say goodbye to a company because they experience poor service and feel neglected. 

Price and product play a much less significant role. Customers want to be seen as individuals, as human beings. They want to feel you care about their dreams, challenges, issues and ambitions. Check out these figures from the Rockefeller Corporation indicating why customers drop a brand. Almost 70% do this because they believe the company doesn’t care about them. A further 14% expresses outright dissatisfaction with the service they received. Clear reason to pay greater attention to this, in a structural sense.

Attention – at the right time

The question is, of course, how to do this. How to keep giving existing customers the right level of attention, so they stay with you. Two aspects are crucial here: using the appropriate tools and having the right mindset. The tools are the systems that underpin your business and your ability to interconnect all of those data streams. Here’s an example. The Marketing Automation Tools from HubSpot deliver increased traffic and more quality leads for our customers. From a distance, we can see how customers use this tool, for instance whether they have linked it to their own CRM. If no link has been created, in due course our consultants will receive an automatic notification, prompting them to take this information to the customer. Such data is invaluable. It opens up a whole new conversation: “I see you’re not yet exploiting the full capabilities of the system”. “Anything else we can help you with?” This is how to pay customers the right degree of attention, at the right time.

These days, the correct use of data is an essential pillar of any successful customer retention strategy. Your company does need to be set up as a SaaS environment, with sufficient intelligence to be able to interconnect the different data streams with ease. You won’t get far with a CRM that amounts to little more than a glorified address book. Incidentally, the issue of cost is fairly irrelevant here, since this technology is presently within easy reach of almost every SME.

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The right mindset

As I mentioned, a second factor plays a role here too: mindset. Because technology on its own won’t get you there. Your account managers, consultants, project managers and other colleagues must be willing to use the technology. They must also recognise its benefits. This may mean you need different people in certain positions – people who are open to change, have an appetite for it and see service as the central foundation that underpins the performance of their tasks. For this reason, we don’t have an Operations Manager; we work with a Customer Success Manager. Does the title matter? It certainly does: the point of departure for these two roles is essentially different. An operations manager starts from an internal, operational process point of view, while the customer success manager aims for customer success. It’s a matter of internally driven versus externally driven. And I know which will deliver most for your company.