Aug 29, 2007

Top 10 Ways to Increase Customer Retention and Lower Turnover Of Valuable Clients

How good are you at retaining your customers and building customer loyalty?

Here's my Top 10 list of keys to maximize customer retention, lower turnover, and build bettter business relationships with your customers:

1. Send "Thank you" letters. Thank you letters boosted the former President Bush from a nobody to VP and eventually President of the United States. Think the 1,000 thank you letters he wrote a year made a difference?

2. Utilize better implementation. Project managers are key to success. If you don't have a project manager for each new customer, consider hiring someone dedicated to this function. It is key to all new launches. Statistics I've seen indicate that projects with a program or project manager (implementation manager) are 70% successful where those driven without this key person only succeed 30%, in general.

3. Handle complaints proactively. When a customer voices a complaint, ask them how you might ideally help them. If you don't have a solution, ask them what a suitable solution for them might be. Let them be in charge. Then offer them the solution, if you can, or point them to where they might find the solution. Do everything in your power to avoid customers remaining upset with your business. One negative customer can destroy twenty positive interactions with a prospect. You want to avoid toxic customer relationships, at almost any cost.

4. Get clear on what you want from each other. Avoid the common challenge of vague vision of relationship. If the relationship has not been clarified between your firm and the customer, you're running the risk of losing them to a competitor. People who can set the vision include the CEO, Salesperson, Operations Manager, Customer Service Representative, Greeter, Checkout, and more. I'm a big believer in this. To this end, I've been developing a model for Semantic Collaboration. Truly dynamic teams collaborate to deliver positive a experience for customers. So, if you aren't sure how to build cross-functional, dynamic teams, contact me and I'll hook you up with some resources.

5. Words matter. It's not just training people on what to DO, but also training to know what to SAY. Too often customer support agents, are thinking from THEIR point of view (as a seller or support person), not from MY point of view (as a buyer or customer who has a need that I want met). It's not about them, it's about me. If I have a concern as a buyer, it needs to be heard by the seller or agent of the seller. Why don't people get this? I suppose, it's because we're all dealing with our own point-of-view, yet when we transcend this we can truly deliver unique and wonderful customer support.

Training ALL employees on how to identify, meet, and communicate regarding customer needs is essential. If you don't have a program to do this, I can help you develop one rather inexpensively. Developing programs to increase customer loyalty and decrease turnover ought to be crucial to your long-term customer retention plan.

6. Hire and keep those who LOVE their job. (Get rid of the rest.) People that hate their job create dissatisfied customers. Why? They'll talk bad about the company, give a less effort, and deliver halfway results. How well are you empowering employees? If they are clock-watching, they're not loving their job! If they're staying overtime, they MAY be loving their job, or it might be culture coming from you, or from other managers. A WIIFM meeting usually won't determine how much people love or hate their work. People usually end up hating their work more after a WIIFM meeting than before it, from my experience. I'd poll people discretely, anonymously, every three months, then you can spot trends as to job satisfaction.

How many of your employees hate their jobs? 10%? 20%? It is kind of a harsh question, but can be even harsher if you don't know the answer. Go down the list of your employees and answer honestly. Are there many? Are there any?

What does this figure mean?

Actually, it means quite a lot. The implications of employees hating their jobs are significant to the extent that they affect the quality of customer service.

Employees who hate their jobs are most likely to develop the following behaviors:

* They are apt to quit at any moment. Many are highly sensitive and the slightest annoyance will trigger their leaving.

* Theft. When employees are not satisfied with their jobs, they see their actions as justifiable, however questionable they may be. Their justification may be that they feel they are owed or they may simply be vindictive and want to hurt the company.

* Rude. They are much more apt to be rude to customers--it's a way to act out their feelings of anger and frustration.

* Uncooperative. They will not be co-operative; they will not inform anyone about problems that they notice, ones that could be prevented and serve to improve the business.

* Their attitude will rub off on satisfied employees making everyone dissatisfied. This is a phenomenon that I find amazing. How can one employee with a bad attitude affect so many good employees negatively? You'd think it would be the other way around; many employees with good attitudes should affect the bad employee. Unfortunately, that is simply not so. The fact is, one unhappy employee can spoil the whole rest of your team. So, like a dead limb on a tree that needs pruning, so it is with your team.

7. Client maximization. It's 5 times easier to sell to the client you have than to add a new one and the last study I read indicated it costs 10 times more to sell to the new client than the existing client. How often do you ask your clients if they have any problems or concerns that you are NOT yet helping them with?

This will open the door to new opportunities.

Do you have a program to cross-sell to existing customers? Customer Retention programs are actually great ways to disguise this important selling method.

Are you up-selling people? Customer Retention offers the ability to up-sell people. Sometimes, if someone is unhappy, they have the wrong level of support. Sell them MORE and they GET MORE. Also, Customer Retention and Loyalty programs offer opportunities to ASK FOR REFERRALS (in my experience, the single most powerful sales tool in existence.)

Maximize your sales opportunities and grow your business through your Customer Retention program.

8. Evaluate your salespeople. If your salespeople are selling the wrong product or service, your customer can be very angry. I was once assigned selling to the Radisson Hotel, and when I called the controller, Frank, he was very upset with my company. When I dug deeper, I learned that the former salesperson had over-committed our ability to deliver product to him. And, when products were late, people would practically stomp on his desk out of frustration. Amazing he had any fingers left when I met him! Anyway, Frank explained the situation, and I learned that the former salesperson had set improper commitment levels. When I reset the commitment expectation to one that both Frank and I could accept and know I could deliver upon, Frank became a happy customer again. Customer Retention calls are opportunities to save lost business. They are also opportunities to learn if your salespeople are displaying bad habits.

Good salesmanship ensures you can deliver service that’s consistent with your value proposition and brand.

9. Measure trends. Are you using polls, trends, surveys correctly? Smart Customer Retention knows if various levels of support are getting better over time or slipping a little. If they slip a lot, you stand to lose a lot of customers!

Make sure you use polls and surveys to measure the lifetime value for different segments of your offerings. Also, use that data to improve your marketing to these segments, too.

10. How focused are you on retention? Are you using retention as a major focus of your marketing efforts? Every three months I go through my emails and look for problems, missed opportunities. You'd be surprised how many times I've created a customer by using this practice to self-monitor my own customer retention. If you've overlooked a question, you may have an opportunity. If you missed a chance to resolve a negative, take action and fix it now. The last time I did this, I ended up getting more business the next week. Is retention part of your annual plan for customers?
Make retention a built-in part of your marketing plan. Go the extra mile, and figure out ways to utilize this list. I've also been building a customer satisfaction survey, which you can find through the resources link at If you find this useful, let me know.

We care about your concerns, and I hope it shows. If you care about this article, please pass it on to your CEO, VP Sales & Marketing, VP Operations or COO, and Human Resources people. Help us get the word out so that we can all experience better customer relationships.


  1. Very helpful when you feel like all your creativity has been sucked out of your mind.. lol. Thanx!!

  2. Hi Lindsay,

    Glad you found this article useful. One more tip would be:

    11. Surprise them! What ways might we surprise a customer? Perhaps we upgrade their product to the next one for the same price. Or, maybe we throw in something extra. My Dad once advised a donut shop: "Give your customers 13 donut holes when they buy a dozen. That way, when they count the holes, they'll always be pleasantly surprised."

    What are ways you can surprise your clients?

    a. Extra service.
    b. Extra product.
    c. Improved quality.
    d. Better price.
    e. Free shipping.

    If you brainstorm on this with other colleagues or even people outside your industry, you might come up with all kinds of ideas that (hahah) surprise you!