Customer service is the root of customer retention, but just how important is it to retain existing customers if there are many more on the horizon waiting to knock on your door? Why do so many supermarkets issue loyalty cards to their customers? These cards are only for customers, and are not generally used to attract new customers, so why do it?



It is because they understand the importance of customer retention, and that it is far easier to keep an existing customer than to attract a new one. However, it does not necessarily need a loyalty card for customers to keep returning to your business when they have need of a product that you supply. It's a great idea for a retail business, but what if yours is a service or you are supplying to other businesses and not the public? How to you maintain their loyalty then?

The first step is for you to develop a customer retention strategy so that it is seen as part of the strategic plan of your company. Customer retention should be seen by all employees as being just as important as securing business from new customers. It is much harder finding new customers let alone persuading them to become repeat customers.

A good customer retention strategy starts with good customer service, and that starts with employee training and an ethos of customer satisfaction throughout your business. This is true whether you control a multinational corporate giant or a small one-person home business. Are your customers made to feel welcome and valuable when you answer the phone? Is your accounts department civil to those who might be a day or so behind with their regular payment schedule? Are your deliveries on time and do you take complaints seriously? Do you have a complaints procedure that investigates every adverse customer comment?

If you can answer no to any of these questions then your customer service needs some working on, because you are in danger of losing your customers to another company that will look after them much better.

Keep in contact with your customers on a regular but scheduled basis. Don't keep calling them asking if everything is OK, or they will wonder why. What is wrong that you have to keep asking if they are OK? However, maintain some sort of contact so that they neither feel ignored or neglected.

A regular newsletter is a good idea, and there is nothing wrong with an occasional survey asking their opinion of your company phrased in such a way that you are offering them a means of helping you to improve your normal good service. Make sure that any postal or email campaign is agreed to by them, such as by means of an opt-in form on your website.

If your business is appropriate for a ‘reward' scheme, then that is frequently part of an effective customer retention strategy. Volume-based discounts can go a long way to repairing any slip-ups in your customer service, since cash is a compelling argument for most customers. However, it cannot be used as a pay-back for bad service. The price of your product is not always the primary consideration with customers, and many put service first. They are prepared to pay a bit extra to get the level of service they expect, and even require, to ensure the smooth operation of their own businesses.

Put yourself in their position, and consider your suppliers. What is most important to you? Is it price, on-time deliveries, customer service or civility in their dealings with you? Whatever it is, make sure that you get that aspect of your business right for others.