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Client/ Customer retention: a health check on your business

by ewenmack
8 replies
Just heard today that Constant Contact
are losing 50,000 customers per month.

With those numbers it's a scary thought that you have
to bring that number of new customers every month to break even on
top level earnings.

It's a dangerous spot because the costs of bringing a customer in will be rising
since others can spend more to acquire a customer as they keep a customer longer.

Even worse, once they have gone through all the market,
it will be only the new entrants that can be become customers,
therefore a much smaller pool.

The market value of a business is next to nothing because who wants to enter
into that game.

So, the longer you can retain customers/clients adds more value
to your company, therefore becomes a much more valuable and
saleable asset.

You hardly hear about retention, yet it's that builds the most wealth.

Best,
Doctor E. Vile The PROFIT Maximizer.
#business #check #client or #customer #health #retention
  • Profile picture of the author RogueSparky
    I've actually started purposely shedding customers over the last 2 years.

    I realized that I had a large customer base of very cheap people who I was constantly doing small repairs for because they didn't want to spend the money on fixing things correctly. I was spending way too much time on work that wasn't very profitable, and I was turning away new work that was much more profitable.

    That has made a big difference in my gross while still working the same amount of hours.
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    • Profile picture of the author ewenmack
      Originally Posted by RogueSparky View Post

      I've actually started purposely shedding customers over the last 2 years.

      That has made a big difference in my gross while still working the same amount of hours.
      Good call.

      Not all are created equal to the point of being marginally
      profitable.

      Best,
      Doctor E. Vile
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  • Profile picture of the author Oziboomer
    Originally Posted by ewenmack View Post

    So, the longer you can retain customers/clients adds more value
    to your company, therefore becomes a much more valuable and
    saleable asset.

    You hardly here about retention, yet it's that builds the most wealth.

    Best,
    Doctor E. Vile The PROFIT Maximizer.
    Precisely Ewen...

    I had the conversation just three days ago where one of my staff questioned the regular mailing of reward to our existing customer base...

    ...their concerns were at least two customers a day kept redeeming the reward and they were coming in month after month doing the same thing...

    ...they thought we should reduce the value of the reward...impose other restrictions...or not mail this month.

    I had to explain that is was precisely the behaviour we had to elicit in the client because if they did keep coming back every month or so it was far better than chasing business...

    ...and having to go through the education process again and again....

    ...also they become less price sensitive because they are holding what is perceived as real value in their hands....

    ...and...

    they know we deliver a premium service at a fair price so the price negotiation is removed from any discussion and they come in to enjoy the service for which they feel they are being rewarded for.

    Ideal situation...

    ...at least in my mind.
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    • Profile picture of the author qu4rk
      Oziboomer, what service are you selling in this case? And what is the reward that you are offering the client to redeem?

      Thanks
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      • Profile picture of the author Oziboomer
        Originally Posted by qu4rk View Post

        Oziboomer, what service are you selling in this case? And what is the reward that you are offering the client to redeem?

        Thanks
        I use the rewards in a few different businesses I own.

        The discussion was relating to my custom picture framing business where we send a "do a friend a favour" gift check that can be redeemed for a limited time against a future purchase or it is designed to be passed along to a friend who may need our services.

        We usually affix a "copy doodles" type handwritten lift note using print-on post-it notes that has a personalized message and the receiver has to pull off to see the offer.

        We use different similar type offers via automated delivery systems for some ecommerce type stores also where we reward for reviews and also reward for other actions taken by buyers after the purchase.
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  • Profile picture of the author bsummers
    The problem with businesses today, the vision is short term. Not knowing that the best marketing maneuver is maintaining a good relationship with old clients and being able to earn their recommendations.
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    Need help in LEADS for your business? Ask me on how to generate qualified and targeted leads from appointment setting and lead generation campaigns through calling, social media and email marketing.
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  • Profile picture of the author outlawdawg
    I believe that retention is a huge factor in business longevity. Finding and more importantly keeping good customers can truly make or break a business. Great insight - thank you.
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    Brian
    https://www.emsooda.com/

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  • Profile picture of the author quadagon
    The vast majority of my main business is repeat customers. We don't offer any incentive for staying. What I do is just before the renewal process starts I'll send the DM a free gift (something that has nothing to do with work). As an example I've paid for a box at Wembley for the NFL game for one client. I simple drop a letter in the post saying saw this and thought of you.

    When the renewal contract comes about 4-6 weeks later they are quite receptive to renewing.

    Now whether watching the jets is a prize or punishment is another question.
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    I've got 99 problems but a niche ain't one
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