Customer Retention. It's half the battle!

Companies can boost profits by almost 100% ...
by retaining just 5 percent more of their customers - Harvard Business Review

The Thompson Group uses the term "Strategic Marketing and Customer Retention" to describe the things we do. Look for a moment at the latter part of that description ... "customer retention". We want to stress an important point. Unlike the conventional interpretation of those words - where people see companies as retaining customers - the reality is that it's the other way around. Customers retain companies - or choose not to do so. We urge you to accept this perspective.

With all the hype about "CRM" (Customer Relationship Management), one would expect customer service to have improved. To learn much more about "CRM" - we suggest you sign up for "Customer Think" - an excellent free newsletter published by CRMGuru. 

But, more than ever, we are hearing about and experiencing a tremendous degradation in satisfaction. While finding new customers is critical, keeping present customers is at least half the battle for company profitability and growth. 

People are walking away from business encounters with the feeling they weren't listened to, weren't told the truth, weren't cared about and weren't satisfied for the money they spent. Expectations are simply not being met! Companies exceeding customer expectations are reaping the rewards.

One might think companies having poor service stopped thinking of their customers as a source of future business. This is not the case. Most simply miss the point that almost all meaningful customer interactions take place at the front lines ... on a person-to-person basis. 

As marketing strategists, we envision the single most important tool for differentiation - setting yourself apart from the competition - will be a return to down-to-earth service excellence, and the commitment by companies to follow through to make it happen. Today, consumers are marking their score cards and creating their own relationships with companies that treat customers with the respect they deserve. The reality is that service excellence, defined as exceeding customer expectations, will remain the single most important contributor to business success.

The biggest big part of this involves communicating with customers. Not just talking, but communicating in a way that is meaningful. Even when your customers are satisfied, we have ways of increasing the amount of business they give you!

Now give yourself the acid test. Does my company talk to customers with respect, delivering honest, timely and meaningful responses and information? Do we empower our people to talk to customers in ways to make things happen? If not, forget any fancy terms like "CRM" and save tons by avoiding miracle systems. First, master the basics. Sophistication may help later.

Our economy is in transition. We are moving back to what has been called a "conversation economy." This means the days of mass advertising and mass convincing are quickly waning. Purchase decisions are being made on an experience basis, and influenced by person-to-person encounters. Tomorrows leaders are now realizing that to get your business, they are going to have to talk to you, and you alone. That takes a big commitment, and a new way of leadership. It requires that the entire enterprise be involved with the responsibility for customer satisfaction.

Consider these facts, as you seek to enhance your business: