Customer retention has always been one of the most cost effective ways to increase business revenue. According to the international consulting firm Bain & Company, you can increase profits by as much as ninety-five percent through increasing retention by as little as five percent. If organizations fail to focus their efforts on servicing current customers while spending excessive amounts on acquiring new ones, they are wasting their efforts and much of their revenue.

>>by  Bob Lucas

Most customers are look for good value for their money, especially in hard economic times. They are also attuned to product and service pricing. Even so, many customers are likely to pay a bit more to organizations that demonstrate a true concern for customer needs and a willingness to go out of the way to provide quality service levels. Certainly, providing service that differentiates your organization from others requires effort, training, and staffing, but the return on investment (ROI) is well worth it long term. You cannot expect to approach service with a “fix it and move on” mentality. Service a process, not an event. It requires dedication of time, money and resources and a commitment to provide whatever it takes to satisfy your customers.

Here are five strategies that you can use to enhance your organization’s customer retention:

1. Create brand recognition.
The most successful companies and those that stay in business for decades or longer, are the ones that spend time and effort planning and executing strategies to acquire and sustain brand recognition. This means creating a market presence where customers know who they are and what they provide. Think about organizations such as, Sears, JC Penny’s, Firestone, Ford, AAA, Maytag and Macy’s. When you hear those names, you know what they do and what to expect from them.

To establish your brand recognition, you must first identify what it is that you want to be known for, to whom you will market it, how your will market it, and ways to offer quality products and services at a competitive price. Once you establish these criteria, you can set out to spread the word through advertising, product and service sampling, strategic partnerships, customer acquisition, and effective service.

2. Get regular feedback from your customers.
You cannot address customer needs if you do not know what they want. A big mistake that many service providers make is that they look at articles and other sources that say “customers want…” and go on to list what all customers want. While such resources can be a good indicator, unless you ask your customers what they expect and want regularly, you are likely spending time and money providing the wrong thing to your customers. For example, in good economic times competitive pricing may not get people in your door or to your website. However, when money gets tight cost may become more important to your customers. Additionally, depending on the type of products or services that you provide, customer needs may be different. For example, for customers looking to buy construction equipment, safety might be an important concern. For someone buying women’s clothing that is not likely a big issue. Take your customer’s service pulse regularly in order to keep up with their changing and specific needs.

3. Make it easy for customers to provide feedback.
Do not forget to ask for feedback following a sale or service encounter. This is a big mistake. If you do not ask, most customers will not tell you. Some studies show that if customers are disappointed, they will not tell you. They will simply go away and then tell others about their negative experience. This can lead to the loss of that disgruntled employee while missing the opportunity to serve those who heard their story. You need to hear the good, the bad, and the ugly related to how well customers perceive your service efforts.

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This article is sponsored by Return on Behavior Magazine published by TeleFaction.