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October 22nd, 2013

Customer RetentionFor businesspeople, what’s the most important word or two to combine with “customer”? Relationship management? Acquisition? How about retention? Recent studies tend to support the common sense answer, service, indicating that a focus on customer service will positively affect all other areas, including profitability. The cost of acquiring customers varies greatly—from $10 for Barnes & Noble to over $300 for Sprint, according to Entrepreneur magazine—but is typically some seven times more than merely retaining current ones and “maximizing” those relationships. Since seven of 10 customers stop buying from companies that give them poor customer service, improving it would seem to be a no-brainer.

Proactive service

Entrepreneur has covered the topic of customer service assiduously over the years, and kept the subject alive while businesses followed fads instead of evidence. The evidence shows clearly that satisfied customers provide a decent marketing bonus, each one telling a dozen to 15 others all about their great experience. But unhappy customers speak to an average of two dozen others about their negative experience, then use a smartphone, iPad rental, or family PC to hit Facebook, Google+, and the social media universe for more ranting. And then there’s Yelp, the FTC (Federal Trade Commission), BBB (Better Business Bureau), various complaint sites, consumer watchdog groups—you need to protect your reputation.

Of course, the best way to protect your reputation in business is to be proactive about customer service and build good relationships with all stakeholders—management, employees, customers, owners and investors, neighbors, local government, zoning boards, community leaders, and others. The Database Marketing Institute  did a six-month study of a mid-size manufacturer, whose 1,200 customers were divided into two equal groups for decidedly different treatment: One received the standard, polite customer service when they came in or called, while the other benefited from an outbound program of “relationship building” and got regular non-sales calls supplying technical support and other services.

Straightforward steps

At the end of the six-month monitoring period, the recipients of the outbound support calls increased purchases by some 12 percent, while the control group’s orders fell by 18 percent. Noting similar results at other firms, and in other industries, the study authors were confident enough to state that “proactive customer service plays an active role in increasing a company’s bottom line.” There are plenty of blanks to fill in—so do your homework, get your mojo back with articles like this, seek out good advice—but never doubt that all kinds, sizes, and styles of companies are boosting profits through customer service campaigns. There are three straightforward steps:

  1. Education: When products/services are preceded, accompanied, and followed by good information, customers feel greater value.
  2. Empowerment: Proper training isn’t enough. You must empower customer service staff to make quick, appropriate decisions.
  3. Feedback: If you want to rate your customer service, ask your customers—and show them that what they say does matter.

Clearly, customer service done right does more than burnish your company’s reputation. It can also grow your bottom line. Customer retention is typically less costly than acquisition, and the value of word-of-mouth advertising and customer loyalty can be substantial, too. Sure, you need new customers, too, so we’ve helped you with that, as well. New customers or old, treat them like gold. And your bottom line? It will do just fine!

Call (877) 266-7725, send us a message, or use the Quick Rental Quote form to get just what you need, just when you need it. We’re always ready to help, so do it now—whenever “now” happens to be!

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