Increase Your Customer’s Lifetime Value Delivers Higher Profits
Numerous studies have shown that the way to increase your bottom-line is to develop customer loyalty. The more loyal your customers are, the longer they will conduct business with you. Every customer represents a lifetime value to your business, and this holds true for the majority of industry you are in.
The cost of customer acquisition is a lot higher than customer retention. Think of all the marketing and advertising channels you have to utilize in order to acquire a new customer. In most cases, a customer’s lifetime value increases the longer you retain them. From entry products to top of the line models, purchases tend to go up. So it makes a lot of sense to pay attention to customer loyalty.
You can call it customer satisfaction or customer loyalty, it comes down to the same thing. In whatever economic condition, customer loyalty is key to your survival. For those that do it right, not only do you survive, you can profit.
How You Can Increase Customer’s Lifetime Value
I came across an interesting post on the Stompernet blog where a StomperNet faculty member, Wilson Mattos raises some interesting points. In a nutshell, he lists four main points:
- Be Proactive
- Make Them Happy When They Buy
- Be The Best When You Have To Be Reactive
- Leverage The Available Technology
Isn’t it better to be proactive when it comes to customer satisfaction? You do not want to wait until a problem arises and the customer starts feeling ripped off after having given you his business. Offering warranty for products, establishing a customer care-line, empowering the front-line staff to settle customer disputes – these are the least a company can do to pre-emptive the eventuality of problems.
I would also place relationship building into this category. Having a working relationship with customers allow you the opportunity to solve little issues before they escalate into major full-blown meltdowns.
Make Them Happy When They Buy
Listen, if someone is giving you a big wad of cash, the least you could do is to make them happy giving you money. Deliver what you promise, on time, with a big smile on your face and give them your direct telephone number.
In some cases, customers might be spending money they can ill afford, although they may really need your product. Whatever the case may be, make them feel they have made the right decision.
Be The Best When You Have To Be Reactive
Despite our best efforts, problems can crop up and when it does, you need to be seen to handle it. Not making promises you cannot keep, not going through the motions. I used to tell my associates to put yourself in the customer’s shoes and asked them what they would like to see happen. Sure, if a big piece of machinery breaks down and the parts have to be shipped across states, that might take some time. But what can we do to assure the customer that everything that can be done is being done?
Personally, I think it matters to be perceived that you care, that you are competent, and that the issues will be solved.
Leverage The Available Technology
Yes, as a customer, it bothers me when businesses do not use the technology that is available today. Communications, CRM software, inventory control and all the other useful tools that are available. Out of stock, lost orders, wrong billings, no known previous transactions, etc. It may be that the technology require investments but what would a customer think if you do not invest in your business?
Of course, in an ideal world every corporation cares about their customers, delivers quality products on time, and supports environmental issues. But we can try. Each of us that goes into business or work for a company can help develop initiatives that measures and develops customer satisfaction. It is the only way we can increase our customer’s lifetime value.
The original article can be found here, http://www.stompernet.com/blog/increase-customer-life-value/.