Some organizations have sought our help with customer retention. When calculating the cost of customer turnover, one must consider customer acquisition costs. If customer retention is brief, the value of the average non-retained customer may actually be less than his or her acquisition cost. What are some of the reasons for high customer turnover?
- You have targeted the wrong customer.
- You have targeted the right customer but your customer acquisition strategies and tactics have attracted other less attractive customers.
- Your sales force has been incented to acquire customers regardless of their profitability or suitability for your brand.
- You misrepresented the brand to prospects.
- You have not adequately reinforced your brand’s value proposition to the customer.
- You are not properly managing the customer relationship at critical points of change or disruption.
- You have not created an emotional connection between your brand and its customers.
- Your brand’s products or services are inferior to competitive alternatives.
- You have system or process failures that negatively impact the customer.
- Your system or process failures unintentionally terminate the customer relationship.
- You do not listen to your customers.
- You do not anticipate your customer’s needs.
- You mistreat the customer in some way and do not adequately redress the problem.
Discovering the specific source or sources of customer turnover is 90% of the solution. I wish you every success in increasing your customer retention.
Brand Aid, second edition is available here now.