Growing up, the family across the street from me always had two Toyotas in the garage. Through the years, the models varied from a Celica to a Camry and even a 4Runner and Tundra, but the make never changed. They were brand loyal to Toyota, like many folks around the world. However, what’s important to note is that each of the vehicles came from a different dealership. The salesperson who sold them their Celica was unable to bring them back in to trade it in for a larger, more family-friendly sedan.
Now consider the relationship between an organization and their strategic marketing agency. If the agency doesn’t meet or exceed the organization’s expectations and hasn’t built an engaged relationship with key contacts in the organization, chances are the partnership will be short lived. There is no reason for the organization to continue paying for an unengaged vendor that isn’t producing results!
Customer retention is about relationships.
As a former public relations account executive, I can personally attest to the value of relationships. Clients who didn’t work with me long left because they had no real connection to the firm, not because they weren’t getting results. I learned business relationships are a two-way street. No matter how many emails I sent and voicemails I left, if my client wasn’t participating in the conversation with me, our relationship wasn’t going to last. Engagement is crucial to building strong relationships — and relationships lead to revenue.
Businesses of all types and sizes benefit from customer engagement and retention. According to the Harvard Business School, increasing customer retention rates by five percent increases profits by 25 to 95 percent.
Not to mention, it’s far easier (about 50% easier according to Marketing Metrics) to sell to existing customers than to new prospects. And if you still don’t believe me, Gartner Group statistics tell us that 80% of a company’s future revenue will come from just 20% of their existing customers.
At the end of the day, not focusing on customer retention leads to an increase in customer attrition. Organizations that build engaged relationships with their customers are well on their way to achieving improved customer loyalty and increases in revenue.
How are you building engaged relationships throughout the customer lifecycle?