Why It’s So Important to Keep Your Customers Happy

March 31, 2014

4:14 pm

Keeping customers happy is your biggest asset as a business. If you're not yet sold on the idea, consider that a 2 percent increase in customer retention has the same effect as decreasing costs by 10 percent. Not only that, but it costs over six times more to get a new customer than it does to keep one.

Clearly, it's in every company's best interests to keep their customers happy. Having this knowledge is a great first step, but implementing the idea and then maintaining customer satisfaction requires a few simple steps.

So how do you actually keep customers happy?

1. Keep Track of Customer Activity

Without insight into how your customers are behaving, how do you know what they want? Tracking is a great way to actually see what they are looking for.

To start, it helps to answer the following questions:

  • Which pages are their favorites on your website?
  • What links do they like best?
  • How long are they looking at certain products before they move on?

Be sure to identify potential churn early on. Learning how your customers behave allows you to tweak your products, services, and even your website toward their needs.

Tools such as Preact allow businesses to learn about their customers. Preact provides useful data for marketing and advertising purposes, allowing you to make more informed business choices.

2. Personalization/Customized Messaging

As a company, it can be difficult to reach a wide audience all at once, especially in a short time. With the onset of social media, text messaging and email, it has become even more cumbersome to manually send customized messages to lists of subscribers.

Sending out just one message that goes via email, SMS, and social media all at once is an effective means of reaching out to customers in different channels. More importantly, customized messages create unique customer experiences.

These days, we have tools and programs that make personalizing messages and sending them across multiple channels easier. One such program is Boomtrain. Boomtrain helps companies make their apps, websites, emails, and notifications become more personalized in order to maintain customer loyalty.

3. Retaining Your Customers Is What Matters

It is one thing to get a customer and it is another thing to keep them.

Developing retention strategies is important because retaining your best customers pays off the most.

Gartner Group says that 20 percent of your customers will provide 80 percent of your future revenue. If these numbers are true, it is extremely important to keep your customers. Another study by Lee Resources Inc. showed that new customers can cost an organization up to five times more than keeping your current ones.

It is an established fact that retaining customers produces the greatest lifetime value for any organization and thus makes up for the churning customers that might not have generated as much profit anyway.

Finding ways to identify the best customers and supporting their needs is the foundation for developing a large customer base.

4. Timely Communication

Be sure to respond to every email within 24 hours. Even better, make it your goal to respond to customers within 12 hours. By responding to emails quickly and efficiently, you demonstrate just how important your customer is to you and your business.

Managing a mountain of emails can become difficult, though. Optimize your email with tools like Mailchimp. Mailchimp has a feature called “Send Time Optimization,” which allows you to schedule dates and times to send out emails, making email easier and more convenient.

Maintaining customer retention rates is critical for any business seeking long-term success. Not only do new customers cost more, they take time away from building relationships with your current, and most loyal, customers.

In the end, smart businesses realize that investing their time, money, and resources into developing relationships with their current clients is equally — and perhaps even more — important as acquiring new ones.

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TX is the Managing Partner of Karlin Ventures and has been involved in the startup space since his college days. He started an online textbook retail company while in college, served as the CFO for an electric vehicle startup, Lit Motors, and worked for Innovation Endeavors, a seed stage venture fund backed by Eric Schmidt. Prior to Innovation Endeavors, TX worked for McKinsey & Co in their London office where he was part of their financial institutions and consumer goods practices. TX received a M.B.A. from the Stanford Graduate School of Business and a B.A. in Economics and Mathematics (summa cum laude) from Wesleyan University. TX is also an Associate of Chartered Accountants (U.K.) affiliate.