Your client retention is highly dependent upon their experience with your company. Retaining clients is knowing your customer so well that you can provide them with an experience that is so good that they are not even interested in talking with your competition. It is about being professional, developing trust, and building personal relationships. It is about continually finding ways to provide additional value. It is the human touch component of your
product or service that differentiates you from everyone else.
Gaining new customers is much more expensive than retaining your current customers - according to Harvard Business Review, between five and 25 times more expensive. Another way to look at this is that the probability of making a sale to a new customer is between five and 20%, while the probability of selling something to an existing client is between 60 and 70%. Profitability is also higher because you don’t have the client acquisition expenses connected to finding and selling new clients. Harvard Business Review also shared that a mere 5% increase in customer retention can increase a company’s profitability by 75%.
Retaining and growing repeat business is one of the key elements in growing revenue. Once someone has bought from you, and their experience was good, the chances are 25% more likely that they will buy again. And the more times they buy from you, the more likely they are to buy from you again and again. With each additional purchase, the chances go up; after two purchases it goes to 45% and after three purchases it goes to 54%.
In addition, loyal customers are a great referral source. The most influential element driving purchase decisions today is word of mouth, also known as marketing buzz. A loyal customer will provide that marketing buzz with a recommendation to a colleague, friend or family member.
83% of loyal customers will recommend your brand to others if they trust the brand. 92% of customers responded positively to recommendations from friends or colleagues.
The difference between companies that grow and those that don’t is client retention.
