Are You Killing Your Customer Base? Learn the CPR Method for Bringing it Back to Life
Maintaining happy customers is one of the most rewarding aspects of running a business. Your motivation grows with each ode of praise you receive and each new loyal follower you gain. So, how do you keep your number of repeat customers on a steady incline? It’s important to dedicate some time and planning to making sure they stay with you.
Many businesses rely on misleading retention rates and assume any customer losses are insignificant to overall revenue. The fact is, customer losses can disguise themselves in seemingly healthy retention rates.
For example, an 80% retention rate at a university seems good enough. But a rate like that over four years would reduce a freshman class of 1,000 students to a measly 512 by graduation time. Not so good.
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Customer WinBack by Jill Griffin & Michael W. Lowenstein explains that retention rates aren’t the only thing to look at when it comes to customer satisfaction, and businesses should concentrate on maintaining existing “at-risk” customers and winning back lost ones. In the event of a customer defecting and heading over to your competitor, lasso him back in with the CPR method: comprehend, propose, respond. Let’s look closely at each of these steps with an example.
Imagine you’re marketing and selling a new kind of coffee bean that purports to give a different caffeine buzz. Several of your customers, while excited about the coffee’s taste and effects, aren’t yet willing to pay the extra money per pound. You get the feeling they’re just a purchase away from quitting your beans and heading back to their daily Starbucks grind. How do you go about the CPR process of locking in their business?
1. Comprehend value
First, begin with some analysis. Determine the at-risk customers and their lifetime value for your brand. How much revenue have they brought in? Will they speak highly of you down the road if you keep them onboard?
As a growing business owner, you’ll likely find value in most customers. When your customer tells you he can’t quite justify spending more money every week on your coffee beans, listen closely and make him feel heard.
2. Propose a solution
Before making a concrete proposal to your customer, ask him what you would need to do to keep his business. The answer might be something as small as letting him know you care.
But let’s say his demands involve the pricing. You might then make him an offer of a one month supply of beans at a reduced rate.
3. Respond with a plan
The customer can respond in several ways to your offer, so it’s important that you and your employees are trained to handle the conversation in the best possible way.
If he still doesn’t want to seal the deal, don’t fret. Let him know there’s a rewards program in the works with discounts and perks for loyal customers, and that you’ll always appreciate his business in the future. You can be the judge of how flexible your offer is according to his needs.
Every business owner can utilize CPR to prevent customer losses. So, make sure to continually examine your customer loyalty and take immediate action if it’s ever at risk.
Grab a copy of Customer WinBack by Jill Griffin & Michael W. Lowenstein for more customer retention tips.