Retaining existing customers is vital

If the oft quoted figure is correct, a new customer will cost us all seven times as much to sell our goods and services in to as a repeat sale to a current customer. Twice as much would be enough to raise eyebrows. We all know this doesn't mean we don't want new customers it just means in our profit mix the retention of our current customers is paramount.

In our discussion with clients we always propose three priority areas that when delivered consistently, to a high standard, will aid customer retention:

1.Focus on the needs of the customer.

2.Plan to build a long-term customer relationship beyond the merely transactional.

3.Surround your customer with your own unique approach to customer service.

1. The needs of your customer are always available to you provided you give yourself time and space to seek them out. Anecdotes are great and should be encouraged as all feedback is a gift, but a regular platform to formally survey what your customers feel about your services, your products and your staff, plus to gain an understanding of the amount of value they believe you add to their business must be in place to test or support the anecdotal stories.

We've worked with customers who rigorously pursue the needs of their customers through professional surveys and forums, who analyse the results versus those of their competitors and then build strategies to increase the customer value they deliver. It is a question of appropriateness and resources but what is not appropriate is taking for granted that you know what your customers' needs are, or assuming because you know them today you subsequently know what they will need tomorrow. Find your way to generate a flow of objective and measurable feedback from your customers that can be used to shape your customer focus for the future.

2. A long-term relationship starts both before and after the initial transaction. What we are aiming to deliver is a lifetime of those transactions through focusing on building our customer relationship. This can be built through the combination of a marketing strategy and person to person contact.

We would look to create regular and meaningful communication through a number of different methods and channels all designed to reinforce the suitability of ourselves to our customers because of the value that we add. We want to thank them, offer them free trials, early adoption of new products, discounts, incentives and tastings.

3. Customer service is much more than just a department or office within your structure. We all must encourage customer service to be an ethos, a mind set, because it is where more often than anywhere else your customer focus gets converted to action right in the face of the customer, by letter, telephone or face to face.

First establish the fundamentals around your sales process, order placement and fulfilment, your accounts support, responsiveness to requests or complaints and performance tracking. If your operation cannot deliver the basics then you are not in the game. 'Basics' however well delivered will not give you customers for life, because all your competitors can eventually catch up on the basics. You must decide 'what else' can be on offer that is unique to you.

Is your approach to be better at those little 1% improvements than your competitor? Have you decided with your team what 'above and beyond' looks like from a customer point of view? Do you emphasise with your team the part they have to play in the retention of customer loyalty? Do you follow up what you say about customer retention with your own behaviour and actions?

Not all customers are the same of course or have the same development opportunity. Once a customer is ours however, striving to keep them is an economic must. Take the time to plan and write down your customer retention and development strategy, focus on the key topics that apply, such as the three above and act upon your plan, performance reviewing the outcomes. This focus alone will aid your customer retention and begin to shape the process of keeping your customers for life-a most profitable and business building exercise.

Steve Pepperell and Andrew Bailey have both held senior positions in multinational suppliers and smaller companies in the foodservice and retail sectors. They are partners in 'How To Solutions' and act as consultants and trainers to a range of businesses. You can find out more by looking at their website www.howtosolutions.co.uk or by emailing them at steve@howtosolutions.co.uk or andrew@howtosolutions.co.uk or telephone them on 07802 641813