Keep: Retention, Repeat Business, & Referrals

KEEP: RETENTION, REPEAT BUSINESS, AND REFERRALS

Any customer you keep is a customer you don’t have to replace. That means your process for obtaining new customers should never take precedence over your process for keeping existing customers.

When I talk about keeping customers, I’m usually looking at three things:

Retention Repeat Business Referrals

Up till now, most parts of your growth system have required a substantial investment of resources. This is the part where you start to really reap dividends on all that hard work. And it’s where your shortsighted competitors will falter because they haven’t built a strong

system.

The easiest, most profitable sale you can make is to a customer you already have. You’ve already done the legwork to bring them into the fold, and it’s hard to identify a target audience with a more qualifying detail than “I’ve already given you my money.”

If you’ve delivered on your value proposition, you should be in much better shape with this prospective sale than you were before this person knew about your business. If, on the other hand, you failed to deliver value and left the customer disappointed, then you’re actually better off talking to strangers.

With existing customers, or referrals, you aren’t investing the same level of resources that you did the first time around to identify them, attract them to your door, and convert them. So your profit margins should be doing quite well when you are keeping customers. And strong margins in the long term justify the investments you are making in your growth system in the short term.

This is the ROI of doing things the right way from the get-go. If you’ve built your growth system based on the guidelines offered here, you’ll begin to see more growth and profitability, which is no easy task. More often than not you see one or the other. (If, on the other hand, you threw some nitrous oxide into your sedan, you are probably going to need to start all over to prepare for the next race.)

Just as important, you now have a base of prospects to introduce new products, services, upgrades, and extensions to. While you are growing your top and bottom line, your more shortsighted competitors will need to go full circle back to the beginning to find and sell new customers, which as you know by now isn’t cheap or easy.

Now, let’s not get it twisted. While we are basking in growth and swimming in $100 bills driven by fat margins, we are not implying this part of the growth system is free of any investment at all. You don’t want to let complacency set in after your initial success any more than you want to ignore basic maintenance on your souped-up street machine. A growth system capable of keeping—and multiplying—customers through retention and referrals shares the same principles through and through: clear and documented processes for predictability, measurability, and repeatability.

Here are some of the basic components that drive a growth system that keeps and multiplies your customer base.

MoreSatisfied Customers

The first and perhaps most important component of a growth system that can go the full Le Mans distance in keeping customers is whether you justified getting their business in the first place with a strong value proposition.

It’s easy to say you provide value, make promises, and do whatever you need to for the sake of closing a sale. But if you want to retain customers or turn them into evangelists on your behalf, you have to meet the expectations you set. (If you fail to do so, then I hope you at least have a customer replacement strategy.)

Delivering on promises is a good indicator of corporate culture. Just ask yourself, who sticks around a place that doesn’t deliver on promises?

And if you had the opportunity to sell for either a company that created raving fans or a company that made them raging mad, which one would you work for? And what type of person would choose to work for the latter? The best people want to work for the best companies, and companies that have trouble keeping customers oftentimes have trouble keeping good employees too. (But more on culture to come.)

How do you assess whether you’re delivering on your value proposition? Measuring churn rates and retention rates is a good place to start, but you may need to look to qualitative feedback as well. The customer’s decision to give you money may be binary—either they do or don’t—but the customer’s mindset is not. The delta between

a customer that is partially unsatisfied and one that isn’t satisfied at all can be incredibly small, which is why so many companies slap a survey on their receipts. Objective customer feedback provides a literal blueprint for what you need to improve or change in order to create more satisfied customers and thus create repeat business and word-of-mouth marketing.

Consider using these three tips to get objective customer feedback you can use to build lasting growth for your business:

1.

Don’t get overly scientific. Listen, I love analytics as much as the next quant nerd, and a lot of work has been done to create scientific survey questions and formats to minimize biases and get scientifically valid results. This is great when you expect ten thousand people to respond and need a manageable and accurate process to interpret the data. But it’s easy to get bogged down in this process. Here’s one process that doesn’t

require a scientist and software to put together: picking up the phone and talking to customers. Very few things compare to a ten-minute call with a customer who gives you insights you probably couldn’t get from a spreadsheet. And bonus: the mere practice of doing this outreach will consistently create loyal customers. People like being heard and like being listened to even more. As Steve Blank says about marketing research, sometimes you just have to get the hell out of the building!

Remember, any feedback you disregard may be the ammo a competitor or entrepreneur needs to create space between you and your customers.

2.

Embrace, nay, appreciate criticism. Getting objective feedback from customers isn’t for the faint of heart. It can be tough to hear criticism of something you created or labored over. It’s important to remain agnostic on what the outcome should be and simply take the criticism for what it is: a clear directive on how to improve. The feedback you are receiving is valuable, and someone is taking time from their day to provide it. This should be embraced and appreciated.

3.

Listen. A lot of companies appear to be getting objective customer feedback in order to boost repeat sales and retention. Sadly, a great many of these companies don’t do anything with the information provided. Over time this creates customer

feedback fatigue, which actually has an adverse effect on the business. If you take the time to get the feedback, and customers take the time to provide it, then do yourself a favor and give it real consideration. That doesn’t mean you have to incorporate every request, but it does mean you should hear them out. Remember, any feedback you disregard may be the ammo a competitor or entrepreneur needs to create space between you and your customers.

By following the steps above, you’ll be creating more satisfied customers in both senses, meaning more customers who are increasingly (“more”) satisfied and—as a result over time—more total customers overall.

Establish a Sales Cycle to Automate Retention

Think of a sales cycle that incorporates good retention practices as a communications action plan. You need to sketch out various decision tree alternatives for the customer as they engage with your business. This way you can ensure that customers don’t find themselves branching back to the beginning of the cycle (alongside brand new customers) after they give you their money.

Understandably, not every business can methodically create if-then statements for every point of engagement with customers. That said, every business I have worked with has had the opportunity to put in a framework to define the key engagement points and a basic

communication cadence. This way, every customer has the same experience, and when the opportunity to sell them again comes up, they aren’t getting reacquainted for the first time.

The key stages of most sales cycles are onboarding, or the process of bringing your customers into the fold at your company, and ongoing, or the touchpoints after onboarding throughout the customer’s lifecycle, including after the value proposition has been fully delivered.

Onboarding

Onboarding customers with a consistent process allows you to define the first impression you want to make with new customers every time. It allows you to design the customer experience rather than react to it and makes it possible to iterate the process based on your results. Articulating what you want this experience to be and documenting it is the first step to ensuring every single one of your new customers receives the treatment you want them to receive. It also helps minimize buyer’s remorse and improves the likelihood that customers will use the product or service they just purchased, which, unless you are a funeral home, probably improves the likelihood that you keep this customer for the long haul.

Whether you are onboarding a customer for a million-dollar product or a free webinar, the following three things are helpful to take into

account:

1.

A welcome series of communications: This can range from one email to a series of emails over the course of weeks or

months. The primary goal here is to make sure the new customer feels welcomed even after they’ve given you money. Most businesses have at least a welcome email, and some have

a more comprehensive approach including phone calls, introductions to staff, and so on. You have to decide the appropriate level of support for your approach to welcoming customers.

2. A prompt to use or educate users on their first engagement:

Getting customers engaged may require a prompt or some tutorials on how to use it. You want to remove all the potential barriers that may stand in the way of the customer using the goods they just purchased. For many companies, this process is automated with a video or a series of videos, access to a user or

customer group, or a database or FAQs document.

3.

A cadence with which you want to communicate: There is no one cadence for communication with your customers during the onboarding phase. There are two wrong cadences, however, and they are “never” and “it’s different for everyone.” Establish the cadence with which you want to communicate, and implement it with automated messages and workflows. Wherever possible, do not leave this to someone within your company unless that person has no other job. The last thing you want is some customers getting bombarded, while others are forgotten.

Ongoing

Some businesses stop communicating with customers once they’ve purchased and been onboarded. At that point they are using the product, or done using it, and it’s time to look towards the next prospective customer, right? Wrong. After a customer has been onboarded, there are countless reasons you want to have a structured communication and engagement cycle to remain top of mind, even if the transaction is complete and the customer has moved on. Just some examples of the benefits continued engagement can provide:

• What is, or was, the experience of buying and using your product or service?

• Did your product or service meet expectations?

• Is the customer planning on buying again?

• What improvements would the customer make if he or she could?

• Would the customer refer a friend or write a review on social?

The ongoing communications with existing and prior customers establishes a channel for you to receive feedback.This feedback sets the stage for continuous improvement, repeat business, and referrals.

Just like any other part of the growth system, you need ongoing communication to be reliable, and the basis of reliability is eliminating the opportunity for human error. This is best done by automating communications or the prompt for the communication.

I’ve worked with many companies that believe they have these processes in place, but don’t actually have them documented or automated. For instance, you may have a welcome process that one of your best account managers uses—most of the time. You may have a series of communications you developed to share with customers after they purchase that is usually incorporated. But if this process is not automated, it is not being done consistently.

The overwhelming majority of small businesses are run by people who wear more than one hat and are thus too busy to create an automated system. That’s understandable, but the result is inevitably an inconsistent customer experience. This is not the road to optimizing retention, securing the most repeat business, or maxing out the number of referrals—and that’s exactly why I work with companies to create standardized processes and playbooks.

Automating these processes is as important as automating your car’s exhaust system. It can be done in a number of ways, the most reliable of which is adoption of a customer relations management tool. A properly installed CRM serves as the operating system of your growth engine and is a great way to not just diagnose whether you are keeping customers but virtually any misfirings throughout the entire business.